Lithium is enjoying a growth story unlike any other commodity these days, driven by the global emergence of the electric vehicle market, expanding demand for high-capacity energy storage and the ubiquitous presence of ever-lighter, more powerful, consumer handheld devices. Combined with a supply shortage in a market controlled by a handful of players, prices for so-called ‘white petroleum’ have soared as much as threefold since late last year.
At the moment, about two-thirds of global consumption is used in ceramics, glass, polymers and alloys. But with batteries expected to catapult demand by more than 400 percent over the next four years, the technology and energy sectors will soon become the prime consumers of lithium.
An interview with Nochane Rousseau, Partner, Quebec mining leader, PwC Canada
Which of the approximately 100 emerging lithium players will survive long enough to build economical projects? Some institutional investors warn that lithium prices are already in bubble territory and a dramatic correction will occur within the next two years. That concern will put intense pressure on new entrants to move quickly while avoiding any missteps.
At the moment, about two thirds of lithium consumed globally is used in ceramics, glass, polymers and alloys. But with batteries expected to catapult demand by more than 400% over the next four years, the technology and energy sectors will soon become the prime consumers of lithium.
Events have been unfolding so quickly for Neo Lithium Corp. over the last year that management now considers patience a strategic imperative. Their goal is to resist the market frenzy and any temptation to rush ahead with a joint venture, or new round of financing. This reflects a new cautiousness among experienced executives running junior miners. The latest market downturn, combined with the prospect of weaker commodity prices over the long-run, have taught many in the sector the importance of developing good assets, strong teams and the right timing.
In terms of the global lithium market, Neo Lithium expects that prices will remain strong despite the metal’s bubble-like trajectory. For one, many of the junior mining firms racing into the space don’t have feasible projects. And second, the green energy revolution is only just beginning.
Carlos Vicens, CFO, Neo Lithium Corp.
Nemaska Lithium Inc. has taken a judicious approach to building its business around one of the world’s most attractive hard rock lithium deposits. The Quebec City-based company has moved systematically to secure the support of stakeholders and regulators for its Whabouchi Spodumene mine and to build an effective business plan.
The company analyzed the difficulties other mining companies have faced in trying to develop lithium projects around the world, and it listened closely to what potential customers had to say. Battery makers, cathode materials manufacturers and other end users told Nemaska that there was a need for new, high-quality lithium suppliers.
That analysis and market intelligence gave management the clarity it needed to push ahead with plans to make Nemaska a vertically-integrated, lithium hydroxide and lithium carbonate supplier to the emerging lithium battery market. In July, the company raised CA$69-million on an existing market capitalization of about CA$350-million.
Guy Bourassa, President & CEO, Nemaska Lithium Inc.