Battery Boom Heats Lithium Gains as Outback Mining Stocks Soar – by David Stringer and Martin Ritchie (Bloomberg News – February 18, 2016)

http://www.bloomberg.com/

The only things hotter than Western Australia’s scorched Outback are the mining companies preparing to supply the lithiumneeded by the likes of Nissan Motor Co. and Tesla Motors Inc. to meet booming demand for electric cars.

Lithium is providing a rare bright spot for miners, amid cratering prices of raw materials tied to heavy industry such as iron ore to coal. The material, also used in tablet computers and power storage, promises gains from China’s shift to consumer-driven growth and global attempts to curb reliance on fossil fuels.

Prices of lithium carbonate — an industrial chemical used in lithium ion batteries — have surged 47 percent in 2016 from last year’s average, according to London-based Benchmark Mineral Intelligence Ltd.

Two of Australia’s five best-performing stocks in the past 18 months among a Bloomberg Index of 2,035 listed companies are developers of lithium materials operations. From 2015 to 2024, the market to supply lithium ion batteries for light vehicles may total $221 billion, according to Navigant Consulting Inc.

‘Step Change’

“There’s a step change going on right now,” as electric car sales rise and hybrid vehicles switch to lithium ion batteries, said Michael Fotios, executive chairman of General Mining Corp., which is seeking to begin exports by July of the lithium-bearing mineral spodumene from Western Australia’s Mt. Cattlin project.

“Raw material supply hasn’t kept pace, and probably can’t keep pace with the projected demand.”

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