LONDON – Lithium is shaping up to be The Next Big Thing. Prices are going stratospheric, junior miners are rushing to stake claims on future supply and investment websites are glowing red hot with speculation about the metal’s prospects.
The Global X lithium fund, one of the very few ways to get in on the action, has gained 25 percent over the past three months with assets under management leaping from $41 million to $68 million since the start of the year. It’s a far cry from the 1990s, when the U.S. Department of Energy was selling surplus stocks and mines were closing as the nuclear arms race wound down, reducing demand for one of the materials used in hydrogen bombs.
But the fortunes of this most versatile of metals were transformed in 1991 when Sony commercialized the lithium-ion battery, now an integral part of just about every electronic device.Now, however, it looks set to scale even greater heights as carmakers, led by Tesla, step up efforts to mass produce electric vehicles using an enhanced version of that same technology.
Lithium could become the key material in the coming green revolution of storable energy. But the lightest of metals in the periodic table is shrouded in darkness when it comes to its pricing mechanics. If lithium is going to become an integral part of the global energy supply chain, its market opacity is a big problem.
Start with the most basic of questions. What is the price of lithium?
More than $20,000 a ton on the Chinese spot market for battery grade material, according to research house CRU.
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