SANTIAGO – Lithium miners are seeing investor interest go up in smoke. The flow of capital into the cannabis industry is draining investments into lithium producers that supply the raw mineral key to power the electric-vehicle revolution.
Mining companies and analysts at the Lithium Supply and Markets Conference in Santiago this week said they couldn’t help but notice the half-empty rooms at the sessions – and the lack of investors and fund managers among attendants.
The picture was remarkably different from last year’s event, when prices for the mineral used in rechargeable batteries were at historic highs. This year prices have fallen 17%.
“A lot of the risk capital that had gone into the lithium sector is now running into cannabis,” said Tobias Tetter, managing director at Zurich-based fund manager Commodity Capital. The lithium market “absolutely needs more investment, not just from car manufacturers or chemical companies but also from institutional investors and fund managers.”
Lithium miners need billions of dollars in investments in order to expand production and to keep up with demand that’s expected to rise at double-digit rates in coming years, according to conference participants including Anthony Tse, CEO of Perth, Australia-based producer Galaxy Resources.