TSLA Announces Plan to Mine Lithium in Nevada

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by Ian Cooper

Lithium stocks, like Lithium Americas (LAC) came under pressure in recent days.

All on news Tesla said it wants to be a lithium miner.  “There is a massive amount of [Lithium] pretty much everywhere,” Tesla (TSLA) CEO Elon Musk said, as quoted by Barron’s. His company is planning a new process to extract lithium from clay ores in Nevada.

While the news wasn’t great for lithium stocks, like LAC and Albemarle, investors are jumping back into these names again quickly.  That’s because it could be several years before Tesla can gets its extraction technology to work to drill for lithium.  In the meantime, Tesla will still need a very dependable supply of lithium for its batteries, which LAC can help with. 

Electric Vehicle Demand Driving Substantial Lithium Demand

Electric vehicle (EV) sales that are growing much faster than anyone expected. In fact, according to a new study from the Boston Consulting Group, by 2025, EVs could account for a third of all auto sales.  By 2030, EVs could surpass internal combustion engine vehicles with a market share of 51%.   That could lead to a sizable spike in demand with lithium used in EV batteries. 

Plus, experts now predict that by 2040, electric cars will make up 58% of the light vehicle market.   In addition, according Resource World, “A recent report by Global Market Insights, Inc. concluded that the global lithium ion battery market is set to surpass US $60 billion by 2024 with a global market of 534,000 tonnes of lithium carbonate by 2025.”

Related: LAC Stock Price Surges

In addition, over the last few weeks, Lithium Americas completed its transaction with Ganfeng Lithium Co., Ltd. in respect of their joint venture company, Minera Exar S.A. Minera Exar owns 100% of the Caucharí-Olaroz lithium project currently under development in Jujuy, Argentina.

“The Transaction with Ganfeng Lithium further strengthens our long-term partnership in Argentina as we work together to bring Caucharí-Olaroz into production,” commented Jon Evans, President and CEO. “With an additional US$40 million in cash on our balance sheet and over US$200 million in available capital to fund our share of Caucharí-Olaroz, Lithium Americas remains in a strong financial position as we advance both of our projects.”

At time of this writing, Ian Cooper does not hold a position in any of the stocks mentioned.

Author: Ian CooperOver the last 20 years, he’s taught thousands of investors how to trade news flow and herd mentality using a unique blend of technical and fundamental analysis. He was among the few analysts to spot the financial crisis of 2008, the top of subprime and Alt-A, the death of Lehman Brothers, Bear Stearns, and New Century Financial, and even the Dow’s collapse to 6,500, as well as its recovery. He even called for gold to rally well above $1.500 when it traded under $600. He's a firm believer that hard work and thorough research will lead to investment success.