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Over the past few months, it has been touted as the “new gasoline,” hailed as the vital ingredient in the electric-car revolution and billed as a great investment opportunity. Lithium is enjoying its moment in the spotlight – and at least some of the enthusiasm for the once-obscure silvery-white metal is solidly grounded in reality.
If sales of electric vehicles from Tesla Motors Inc. and other manufacturers take off in years to come, so too will sales of a new generation of lithium-ion batteries. Increased use of lithium-ion batteries will propel “staggering growth in lithium demand” over the next five years, writes Julia Ralph, a Hong Kong-based principal consultant for CRU Group, a metals and mining research company.
Lithium lust is already fuelling big gains in some Canadian-listed junior miners, such as Nemaska Lithium Inc. and Lithium X Energy Corp., both of which have quadrupled in share price this year.
In China, where government is aggressively encouraging the transition to electric vehicles, prices for lithium carbonate have rocketed from around $6,400 (U.S.) a tonne in 2015 to more than $20,000 a tonne today, according to Asian Metal, a metals research firm.
Gains in the rest of the world have been more modest but still impressive, according to Citigroup. Its analysts calculate that lithium prices outside of China are on track to rise from below $5,900 a tonne last year to more than $7,600 this year.
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