By Rick Mills ——Bio and Archives--October 18, 2017
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"The spectre of resource insecurity has come back with a vengeance. The world is undergoing a period of intensified resource stress, driven in part by the scale and speed of demand growth from emerging economies and a decade of tight commodity markets. Poorly designed and short-sighted policies are also making things worse, not better. Whether or not resources are actually running out, the outlook is one of supply disruptions, volatile prices, accelerated environmental degradation and rising political tensions over resource access." Chatham House, Resources Futures
"Continued growth in consumption resources is being driven by growth in China and the rest of Asia. Chinese companies are increasingly acquiring assets, as are Indian companies, prompting other global miners into a race to secure mineral assets of their own." George Fang, Standard Bank's Head of Mining and Metals ChinaThe new competitor's for the world's resources have a mandate to secure long term resource deals for domestic use and have the financing capabilities any major mining company, or for that matter any government, would be envious of. China's state owned enterprises (SOE) and sovereign wealth funds (SWF) were armed with hundreds of billions of US dollars from the country's foreign reserves and sent out to scour the globe for resources - they went on the hunt to fuel China's exploding economy. China wants to diversify out of the massive US dollar component of its Foreign Reserves so the SOE/SWFs have no problem dealing in straight cash and operating in what some might consider high risk areas. The Chinese also have a longer term horizon for their ultimate payoff because they are mostly after off-take supply agreements from early stage development projects. China, along with Japan (imports 100% of its fossil fuels) and Korea, who have no lithium of their own, have been forming strategic alliances, joint ventures, and acquisitions with lithium exploration companies worldwide.
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"Lithium supply security has become a top priority for Asian technology and manufacturing companies. Strategic alliances, joint ventures, joint ventures and acquisitions, continue to be established with lithium exploration companies worldwide. These agreements ensure a reliable and diversified supply of lithium for Asia's battery suppliers and vehicle manufacturers. With lithium carbonate being one of the lowest cost components of a lithium-ion battery, the issue that Asian companies are addressing supply security attained which can be achieved by acquiring lithium from various lithium producers. These measures have been ongoing since 2009 which has seen Asian companies establish joint venture and acquire existing producers. These strategic moves have allowed battery and vehicle companies to alleviate the possibility of future lithium supply disruptions, which could have devastating consequences in a well-established and productive HEV, PHEV, and EV industry. Consider that both Korea and Japan, who are amongst the largest producers of lithium ion batteries have no lithium hard rock or salar brine deposits within their borders." Livio Filice, Seeking AlphaThe rechargeable power needs of our modern society has made lithium a serious player in the commodity markets. The reason for the electrification of the global transportation system is clear. Electric vehicles (EVs) have far fewer moving parts than Internal Combustion Engine (ICE) gasoline-powered cars - they don't have mufflers, gas tanks, catalytic converters or ignition systems, there's also never an oil change or tune-up to worry about getting done. Plug and go, pretty convenient and very green! But the clean and green doesn't end there - electric drives are more efficient then the drives on ICE powered cars. They are able to convert more of the available energy to propel the car therefore using less energy to go the same distance. And applying the brakes converts what was simply wasted energy in the form of heat to useful energy in the form of electricity to help recharge the car's batteries. The first DVD players, the first flat panel widescreen TV's, the first production runs of any advanced technology are always more expensive than later unit costs will be. That is a fact, but this author believes that Hybrid and fully Electric Vehicle prices will soon be very affordable and offer cost advantages over their polluting gas guzzling ICE second cousins. Electric vehicles are totally emission free. China, the world's second-biggest economy, in a move to cap its carbon emissions by 2030 and curb worsening air pollution said it was preparing to set a deadline for automakers to end sales of fossil-fuel-powered vehicles. That's a lot of lithium batteries to manufacture – and the Chinese are preparing by locking up a secure supply of lithium. In just a few short years, by 2021, Chinese Gigafactory's will provide 3.5 times more gigawatt-hours of battery cells than Tesla's current Gigafactory. Lithium supply or off-take agreements have been signed with lithium focused companies from Australia, Mexico and Argentina to name just a few countries - Jiangxi Ganfeng Lithium Co., a Chinese company, even has an off-take deal with a company operating in Ireland.
"When you look at all the battery plants being built and the plans for EVs, even if only about 25 percent of those are realized, we're still going to be short of lithium. It's a unique once-in-a-generation situation." Simon Moores, managing director of Benchmark Mineral, Electric Car Boom Drives Rush to Mining's $90 Billion Hub
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Richard lives with his family on a 160 acre ranch in northern British Columbia. He invests in the resource and biotechnology/pharmaceutical sectors and is the owner of Aheadoftheherd.com. His articles have been published on over 400 websites.