With 2020 making Tesla (NASDAQ:TSLA) shareholders Teslanaires, and every car companies from Volkswagen to BMW rolling out their new electric vehicle (EV) fleet, we probably donât have to tell you that in 2021 we are living in the age of battery-powered technology.Â
So it only makes sense that lithium producers are doing well right now. In fact, with all this buzz in the battery world, weâre set to see a 599% increase in demand for EVs by 2025, and lithium production growth of over 260%. The EU estimates it will need up to 18 times more lithium in 2030 to meet its climate neutrality goal and 60 times more by 2050.
The lithium industry is booming. But where exactly does the mineral come from, was it always this in demand, and whatâs the best way to invest in it? Letâs take a look.Where does lithium come from?
Lithium can be found in two types of deposits. The first one is brine or salty water. Over half of the earths brine is held in South America, while other sources can be found in the Middle East and in the US. The other place where lithium is deposited is in mineral rock, the most popular being spodumene, which contains up to 7.7% lithium oxide.Â
Once lithium is extracted from one of these two types of deposits, its raw material is then purified and processed into two main compounds (lithium carbonate and lithium hydroxide) or a group of specialty lithium compounds.
Lithium carbonate and lithium hydroxide are both listed at different selling prices depending on the region they are sold in. And specialty lithium compounds are usually only used in very specific materials, like the alloy wheels on SpaceX rockets.Why is demand so high right now?
Before the age of EVs, lithium was known for its use as a medicinal cure for depression. But by 2015, with the explosion in lightweight, powerful, and rechargeable batteries for smartphones, laptops, and tablets, the mineral skyrocketed in demand.
Fast forward to 2021 and battery demand only advanced with technology. And not just a smartphone battery, either weâre talking about powering an entire vehicle.
With a standard EV using 100 times as much lithium as a laptop and the Tesla Model S using 10,000 times as much as a smartphone, these definitely arenât your regular AA batteries.
It only makes sense that the pioneer of the EV industry is building a massive $5 billion Gigafactory in Nevada to mass-produce lithium-ion batteries.Is it too late to get in on the boom?
Itâs unlikely that we need to convince you that lithium is a hot commodity right now. But knowing which producer to invest in isnât always straightforward.
Which is why we are here to introduce you to a Vancouver-based mining company thatâs capitalizing on the battery boom. United Lithium Corporation (CSE: ULTH) has already raised millions in funding and just acquired the rights to a very exciting new project in Bergy in Sweden.
The lithium deposits in Bergy were only discovered in 2016 and the findings revealed very good news. Unlike mines in Canada that can find deposits of 1% to 2% lithium, the mine foundÂ deposits of up to 3.5% lithium. In the world of lithium mining, this statistic is pretty incredible. The high grade deposits were also found close to the surface, which is excellent news for lowering production costs.
Need another reason to invest? Apart from the huge demand for lithium right now, the EU is pouring billions of dollars into green funding, meaning Unitedâs drill program is fully funded.
The plan is to begin drilling in April this year with results expected by the end of May, so now is an excellent time for investors to get in early.