Guy Bourassa of Nemaska on the “very, very big shortage” of Lithium
The real driver for the intense global demand and price increase on lithium
February 5, 2016 — In a special InvestorIntel interview, Publisher Tracy Weslosky speaks with Guy Bourassa, President, CEO and Director for Nemaska Lithium Inc. (TSXV:NMX | OTCQX:NMKEF) on the overall global lithium market and how the real source for the increasing demand for lithium is energy storage. While commenting on the distinct benefits of the electric vehicle market interest, Guy addresses the global supply shortage and how this may translate to the marketplace.
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Tracy Weslosky: I’m delighted to have this opportunity to talk to you about the overall lithium market. Jack Lifton is telling me that we have a bull lithium market. In fact all my editors are, John Petersen, Christopher Ecclestone, they’re all saying we’ve got another 5 years of intense demand and rising prices for lithium. Do you agree with this?
Guy Bourassa: Absolutely, I do agree with this. As a matter of fact, I’m sure that they also noted that the only commodity in the mining sector in the past 4-5 years that I’ve been seeing an increase in demand and an increase in sales price is lithium and the different lithium compounds. What I hear from the Chinese market and the producers around the world and the market analysts is that effectively there’s a very, very big shortage actually that is reflected by the spot price that we see in China that we’ve seen for the past 3-4 months. Some people are talking about even $15,000.00 U.S. for lithium carbonate on the spot price. Of course, the spot price does not represent the real contracts, long-term contracts, but it definitely shows that somebody is looking desperately for lithium carbonate at this time and that there is none.
Tracy Weslosky: Obviously that is a lot of exciting news for us at InvestorIntel and our audience. Of course, Jack Lifton is telling me the real driver for the battery market is actually China. Of course, Nemaska Lithium has made a one of a kind deal with Johnson Matthey. And as an expert in understanding the demand for batteries, can you talk to us a little about what that demand really is or help enlighten us a little bit more on what the status is at this time?
Guy Bourassa: I don’t quite agree with Jack about the fact that the market is in China. Production increases in China, but their batteries and cathode material is going outside in other markets so they’re producing these batteries, but the end-users are not, absolutely not presently in China. That’s maybe going to be growing there, but it’s already growing in Europe. It’s already growing in the United States, the electric vehicle. What’s even more interesting, because people don’t believe of the rapid growth and the adoption of the electric vehicles, they have to take into consideration that on a tonnage-wise energy storage is much more important than the electric vehicle adoption. You’re going to see at least two times the number of tons of lithium compounds required for the energy storage sector. It’s less sexy I suppose than the electric vehicles, but as a manufacturer I’m absolutely delighted with the rise in the demand for energy storage….to access the full interview, click here
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