The Lithium Boom Has Only Just
Begun
NetworkNewsWire Editorial Coverage: Despite
short-term gyrations, the outlook for lithium continues to shine.
Electric mobility is still only in its infancy. Revolutionizing how
we commute and power our lives, the inevitable tsunami of electric
vehicles and burgeoning demand for energy grid storage are driving
lithium demand for the foreseeable future.
- The electric revolution is still in its infancy.
- Lithium demand expected to triple in next seven years.
- Lithium stocks could surge with demand.
- Junior miners offer big upside potential.
Anticipation of an exponential increase of electric vehicles
coupled with expanding demand for lithium-ion (L-ion) batteries
drove the lithium mining sector to reach all-time highs last year.
Lithium shares swooned at the beginning of 2018 on a negative
oversupply forecast by Morgan Stanley analysts. That forecast has
since been widely debunked by a broad range of lithium industry
experts and given only a 1 percent chance of happening. As
the world inexorably advances into the new electric power paradigm,
the lithium sector should experience an excellent decade and
produce outsized returns. Demand for raw battery materials
continues to grow at an unprecedented pace, and lithium miners
could easily rack up further gains and reach new highs. With large
upside potential, evermore attention is turning to junior miners
such as QMC Quantum Minerals Corp. (OTC: QMCQF) (TSX.V: QMC) (FSE: 3LQ) (QMCQF Profile).The
company is intent on building shareholder value through the
acquisition, exploration and development of natural resource
properties that contain either high-quality lithium or silver,
gold, nickel, copper and zinc opportunities. Historically
validated, QMC's 100 percent-owned flagship project, the Irgon Mine
Project,holds a potential motherlode of lithium. In addition, major
lithium producers such as Albemarle Corporation (NYSE: ALB) and
Sociedad Quimica y Minera S.A. (NYSE: SQM) plan
production increases, and Nemaska Lithium, Inc. (OTC: NMKEF) (TSX: NMX) is also in the
hunt to supply companies such as Tesla, Inc. (NASDAQ: TSLA) and
myriad other end users seeking a secure supply chain.
To view an infographic of this editorial, click
here.
Lithium Demand May Exceed Expectations
Reflecting the scale of the impending energy revolution,
respected independent commodity forecaster Roskill
tripled its demand forecast for lithium through 2026. Two years
ago, Roskill forecast demand would increase to 328,000 metric tons
of lithium carbonate equivalent by 2026; now the commodities expert
has revised the outlook and expects demand to explode to more than
1 million metric tons by then. However, lithium supply expectations
fall far short of forecasts. In 2018, the total lithium production
will total only around 280,000 metric tons of lithium carbonate
equivalent — a far cry from what's needed.
A wild card in the quest for lithium feedstocks is China, which
already controls 55 percent of global lithium-ion battery
production. China plans to deliver about 3.5 times more
gigawatt-hours of battery cells a year than the Tesla Gigafactory
and is expected to command 65 percent of all production by 2021.
China also has been pushing hard for clean energy and intends to
flood highways with 5 million electric vehicles by 2020. As
electric autos and energy storage solutions surge, indications are
that lithium may soon become the most important energy commodity in
the world.
Juniors Should Shine
Many believe that the majors just won't be able to produce
enough lithium to meet global demand. Select junior miners are
likely to be the beneficiaries and could produce exceptional
returns. QMC Quantum Minerals Corp.
(OTC: QMCQF) (TSX.V: QMC) (FSE: 3LQ) is
in the sweet spot to capitalize on the enormous opportunity ahead.
Documented by the previous owner, QMC's flagship project, the Irgon
Lithium Mine, is directly centered on a site rich with
lithium-indicated resources. In the 1950s, the Lithium Corporation
of Canada Ltd. drilled 25 holes into the Irgon Dike and reported a
historical resource estimate of 1.2 million tons grading 1.51
percent Li2O over a strike length of 365 meters and to a
depth of 213 meters. The mine was closed in the late 1950s due to a
lack of demand for lithium at the time; things certainly have
changed since then. QMC is currently updating the historical
resource data to meet current NI43-101 reporting standards through
a detailed channel sampling and subsequent drill program. An
interactive 3-D model displaying historical data derived from past
drilling and underground work shows that exploration and
underground development has taken place only on the central portion
of the dike, which means there's a significant opportunity to
quickly increase tonnage along strike. QMC recently issued an
update on its promising drill program.
Once these assets are confirmed to current standards, it's
likely they will have a dramatic impact on QMC's balance sheet. The
results so far have been exceptionally promising since they
currently reflect historic assays. Channel sampling on the Irgon
Dike has returned 1.73 percent Li2O over 14 meters. In
addition,regional results obtained from sampling of other dikes in
the area returned three chip samples with concentrations over 1.90
percent lithium-oxide, including one that assayed 2.62 percent.
These positive results, in conjunction with the well-developed
mining infrastructure already in place, may position QMC to quickly
leverage the assets and capitalize on the global demand for
lithium.
Location, Location, Location
QMC's Irgon Lithium Mine Project is strategically located in the
prolific Cat Lake-Winnipeg River rare-element pegmatite field of
southeastern Manitoba, Canada. This area is rich in
spodumene-bearing pegmatite occurrences, also known as the source
for hard-rock lithium mineralization, that often contain large
amounts of lithium and other rare-element-bearing minerals. Once
surveys and sampling have been completed, hard-rock pegmatite
deposits are much faster to mine than salt brines, and production
is more reliable. QMC is already ahead of the curve with all the
previous work done and should be able to move forward to mining the
riches quickly. The region's abundant mineral resources are further
substantiated by the mining activities of neighboring specialty
materials behemoth Cabot Corp. through its Tantalum Mining
Corporation of Canada (TANCO) rare-element pegmatite deposit.
QMC Quantum Minerals has already invested two years in the
exploration of its Irgon Lithium Project. Normally it takes three
to five years to develop, but due to the extensive previous
exploration and development work done on the site decades ago, QMC
expects to start operations much sooner than anyone thought
possible and is rapidly moving toward bringing the property online
for production. QMC has expanded its Irgon Lithium Mine Project
holdingsby 650 percent, raising the project's contiguous footprint
to 11,325 acres as it aggressively moves the Irgon Mine Project
forward to production.
Like the Irgon Lithium Mine Project, QMC's 100 percent-owned
Namew Lake District Property is also exceptionally well located.
The 23,000-hectare property encompasses the Rocky Lake Discovery in
the Flin Flon Belt, a world-class mining district in Northwestern
Manitoba. QMC's geophysical and drill programs at the Rocky Lake
Project identified significant geophysical conductors, and assays
from the drill holes showed evidence of gold, copper and zinc
mineralization. This project represents a massive resource with
strong future potential, but with lithium in such demand, QMC is
focused on bringing the Irgon Property into production first.
Utility Storage Solutions
Lithium demand could skyrocket even higher than anticipated. A
Wall
Street Journal article revealed an enormous but seldom
recognized lithium demand driver. Multiple states and
municipalities in conjunction with utilities across the country are
revamping antiquated electric grids and utilizing high-density
Li-ion energy storage batteries to make the grid more efficient.
Utility companies are increasingly storing energy in neighborhood
battery junction boxes during off-peak, using it during peak demand
and avoiding expensive peak demand electricity.
Leading global electricity industry expert GTM Research published a
report on the state of the U.S. energy storage market. The
study projects that in just three years, deployments of stored
energy in residential, nonresidential and utility systems will grow
to more than 10 times greater than current levels. Such a drastic
increase in deployment is expected to lead to an energy storage
market worth $2.8 billion.
If there are any doubts about lithium demand, look at any
lithium mining company — every single one is trying to rapidly
expand production. The lithium boom has just begun, and it won't
end any time soon. Strategically positioned portfolios in the
lithium sector should excel well into the future.
Buyers and Suppliers
To lock in lithium supplies, Tesla, Inc. (NASDAQ: TSLA) just signed a
deal with China's top lithium producer to satisfy its thirst
for the raw material. Tesla uses the metal as a key component to
manufacture batteries for its electric cars and other energy
storage products. The company is rapidly expanding output of its
Model S and building a lithium-ion battery factory in Nevada.
Albemarle Corporation (NYSE: ALB) is among the
world's largest lithium producers and a leader in specialty
chemicals. Albemarle's lithium business segment mines lithium and
converts it into different forms along the value chain. The company
operates one of the only operating lithium brines in North America
as well as a brine in Chile. ALB plans to expand production in 2019
under an Australian joint venture.
Chile-based Sociedad Quimica y Minera S.A. (NYSE: SQM) is an
intriguing player in the global scramble to secure greater supplies
of lithium. SQM announced plans to expand lithium carbonate
capacity to 63,000 metric tons by year end. The Chilean government
blocked China's aggressive bid for over 30 percent ownership of SQM
last year but reached an agreement in May allowing China's Tianqi
Lithium to buy a 24 percent stake, which could grant China control
of about 60 percent of the world's lithium supply.
Nemaska Lithium, Inc. (OTC: NMKEF) (TSX: NMX) is developing
spodumene hard-rock lithium deposits in Canada and is pursuing
patent protection for its proprietary process to produce lithium
hydroxide and lithium carbonate. The company just signed a
five-year supply agreement with Northvolt, an European battery
maker. Nemaska recently obtained $75 million in funding to finance
its Whabouchi Mine.
For more information on QMC Quantum Minerals Corp., visit
QMC Quantum Minerals Corp.
(OTC: QMCQF) (TSX.V: QMC) (FSE: 3LQ)
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