Lithium producers believe that the automotive market has reached the tipping point
International Lithium Corp. (TSXV: ILC) is capitalizing on lithium demand turning into lithium anxiety both for investors and lithium battery manufacturers looking to lock in supply chain verticals.
Recently, International Lithium released data from its main project in Argentina, the Mariana lithium brine project, with its indicated resource containing an estimated 1,248,000 tonnes of lithium carbonate equivalent (LCE), previously reported with at a 60% recovery rate to be 747,000 tonnes LCE which is now calculated as 749,000 tonnes of LCE. Inferred resource contains an estimated 618,000 tonnes of LCE.
Lithium producers believe that the automotive market has reached the tipping point, that will lead to the mass electrification of transportation. Electric Cars still represent only 0.2% of all cars in the world. Worldwide sales of electric cars have reached 1.1% of total auto sales in 2016.
The drive for electric cars is pushing demand for lithium salts as the mainstay of lithium ion batteries. When electric vehicles first appeared in the marketplace, range anxiety was a main factor affecting market uptake. But Tesla’s Model 3 with 65 kWh lithium battery provides over 200 miles of range and will become the standard in the industry with its mass volume production from this July.
Are we waiving our goodbyes to range anxiety and are we getting into the unchartered territory of lithium supply anxiety?
According to the International Energy Agency’s (IEA) “Global EV Outlook 2017” past data suggests significant growth in sales of electric cars.
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Recent sector performance is indicative. The global electric car stock surpassed 2 million vehicles in 2016 after crossing the 1 million threshold in 2015, prompting new analyses on the lithium supply chain.
According to the IEA, in order to limit the increase of temperature below 2º C the number of electric cars needs to reach 600 million by 2040.
Kirill Klip, Executive Chairman, President and CEO of International Lithium Corp., “There is around 60 kg of LCE in one Tesla Model 3 battery. We will need 36 Million Tonnes of LCE to be produced by 2040 to support 600 million electric vehicles on the road by 2040.”
But this is about more than lithium mining and purification. I expect that this may cause a dramatic shift in the global economy. In the hallways of academia, scholars claim that the automotive industry has been central to the emergence of the current economic paradigm. The mass production of the Model T by Henry Ford, opened up the world’s economy. Even nowadays, new car sales are an indicator of economic growth because of the importance of the automotive industry to the gross domestic product (GDP).
There is a direct correlation between the size of a country’s GDP, and its automotive industry. GDP accounts for the consumption, investments, net exports, and government spending during a given time period. In economics terms, it is possible that lithium will be a central tenet to a shifting paradigm in favor the electrification of transportation the same way gasoline supported the emergence of the automotive industry in the early 1990s.
Dr. Luc C. Duchesne is a Speaker and Author with a PhD in Biochemistry. With three decades of scientific and business experience, he has published ... <Read more about Dr. Luc Duchesne>