If you want to play the commodities, forget pork bellies, soybeans or gold. Get into lithium. Not to treat the bipolar disorder exposure to the commodities market could trigger. Lithium to power cars. The Japanese Ministry of Economy, Trade and Industry figures that global lithium demand will more than triple from about 92,000 tons in 2010 to 310,000 tons in 2020. Who’s gobbling up the stuff? The automobile industry is expected to use 60 percent of the global lithium supply in 2020, up from less than 5 percent this year. No wonder there is a run on the material.
Mitsubishi signed a long-term deal with Galaxy Resources Ltd., reports The Nikkei [sub]. Galaxy owns a lithium mine in southwestern Australia that sits on 16 years’ worth of lithium. The lithium ore is shipped to a plant near Shanghai that will make the lithium carbonate needed for batteries
Japanese Itochuwill invest in a U.S. company that extracts lithium from underground water used in geothermal power generation. Annual production is expected to reach 16,000 tons in three or four years.
Mitsui has signed an exclusive lithium sales contract for Japan, China and South Korea with a Canadian mining company.
Toyota Tsusho plans to mine lithium in Argentina starting in 2012. The output should mainly go into Toyota car batteries.
If you gamble on lithium, you basically gamble on the success of plug-ins. If they take off, there will be a surge in lithium demand. The capacity of batteries in plug-ins must be much larger than in hybrids. If plug-ins don’t take off, well, there still remains the medical application.