Investors get in on the lithium rush – by Tess Ingram (Australian Financial Review – May 31, 2016)

Unless you have been living under a heavy, lithium-bearing rock you would be aware that investor interest in the lively sector has been super-charged over the past 12 months.

As the name suggests, lithium is a key ingredient in lithium-ion batteries used in electric vehicles and energy-storage systems which are expected to become more prevalent over the next decade.

On the back of bullish analyst demand projections and keen investor interest, tens of local players have joined the hunt for lithium, including Andrew Forrest-backed nickel miner Poseidon Nickel and resurrected iron ore miner Atlas Iron.

Before digging around for the best stock picks, here are five positives and negatives about the burgeoning sector to keep in mind. According to Citi, about 170,000 tonnes of lithium carbonate equivalent was produced in the relatively small global lithium market in 2015, with 83 per cent of that supply from four producers – Albemarle, SQM, FMC and Sichuan Tianqi.

The market share these miners have amassed is expected to shift dramatically over the next few years as new entrants respond to projected demand growth, particularly in Australia.

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