Emerging Lithium MinersWhat a year it has been. One standout story this year has been the transition from fossil fuels and ICE’s (internal combustion engines) to the new clean and green world of Electric Vehicles. The ‘go to’ commodity for this climate change buster is, of course, lithium. We only have to look at the recent results from South American lithium behemoth SQM to see the dramatic effect that rising prices have had on profitability. SQM made a big jump in 3Q earnings this year from US$1.7m in 2020 to US$106m. Revenues were up 46.1% on higher prices and more production.
2022 is set to continue that trend. It is clear that the current boom is different to the previous lithium boom in 2017, that went too hard, too fast and did not have the fundamental demand behind it. Demand is growing rapidly. Too rapidly for the mines to keep up with. Australia, Chile and China now produce 88% of global lithium. The US has only one lithium producing mine. And this from a country that gave us the Tesla.There are 200 new battery megafactories in the pipeline by 2030 and 122 are already operational. China is pegged for 148 of them. If all 200 were to be producing batteries at full capacity, annual demand would be 3m tonnes. To put that in perspective, that is 37 times what was produced in 2020. We look at three lithium stocking fillers below.