Last week, the top lithium mining companies urged Chile to overhaul regulation to allow them to increase output of a metal seen booming in coming years anticipating a larger scale adoption and demand of electric cars and lithium batteries. The government wants the industry to grow; however, opposition has said the state should keep its tight grip over an industry that could bring billions of dollars in revenue in the future.
Lithium carbonate purchases are typically tied to longer term supply contracts between the lithium producers and customers. There may be as many as ninety different varieties of lithium that producers will market and pricing is not simplified enough to give a generic quote as there are different volumes and purities according to the demands.
As the lithium fund holds a variety of companies that are exposed to multiple revenue streams it might be of interest for investors to note that on a weighted average basis, the implied exposure to lithium from the top 10 holdings is equivalent to only approximately 30 percent of the fund's assets, based on the reported segmented revenue from the latest annual company filings.
Last week Japan's fourth-largest trading house, Itochu Corp., announced that it has taken a 20 percent stake in a U.S. project to produce lithium and that it expects to start sample shipments for use in car batteries by the end of this year.
Although it is widely distributed on earth, lithium does not naturally occur in elemental form due to its high reactivity. Actual and potential sources of lithium are from continental brines, clay mineral hectorite, pegmatites, geothermal brines and oilfield brines.
The world’s largest lithium producer has indicated interest in the salar concessions for Salares Lithium, resulting in the conversion of over 39,000 Ha of concessions that cover the aerial extent of the brine lake from the current 'exploration' concessions to 'exploitation' concessions.
Driving strong demand for lithium battery adoption, a resent report has been published that suggests hybrid and electric cars may grab as much as 10 percent of the European automobile market by 2020.
It was a busy week for lithium investors as 2 of the largest lithium producers in the world reported strong first quarter earnings.
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