Lithium-ion batteries power everything from cellphones to laptops to electric vehicles, and demand for the metal is certainly on the rise. It’s almost a basic lithium fact at this point that companies and investors are continually being drawn in by news of Elon Musk and Tesla Motors’ (NASDAQ:TSLA) lithium-ion battery gigafactory.
However, Tesla’s gigafactory isn’t the only lithium-ion battery megafactory out there, and there’s more to lithium and the lithium market than electric vehicle batteries. Investors new to the lithium space will want to get a handle on a few basic lithium facts before jumping in.
Here’s a look at five basic lithium facts investors should know.
1. It’s the lightest metal on the periodic table
Lithium is the lightest, or least dense, elemental metal. It is about half as dense as water. The metal also has a high specific heat, making it useful in the production of heat-resistant glass, while its electrochemical potential makes it useful in batteries.
2. It can be found in brines, hard-rock deposits and clays
It’s a lithium fact that lithium is found all over the world, in both hard-rock deposits and evaporated brines. The Greenbushes mine in Australia is a key hard-rock deposit, while most of the world’s lithium brine production comes from salars in Chile and Argentina. Along with Bolivia, those South American countries make up the prolific “lithium triangle.”
Another lithium fact worth noting is that several companies are also looking to develop clay-based lithium deposits.
3. It’s not just for batteries
While batteries have been getting most of the attention in the lithium space lately — and while demand for lithium from the battery sector is certainly on the rise — it’s worth noting that other sectors continue to account for a healthy proportion of lithium demand.
Citing data from Roskill, a report from Stormcrow Capital notes that in 2013, rechargeable batteries made up 29 percent of lithium demand, while the remainder of the market was mostly made up by various industrial end uses. For 2016, that proportion increased to 39 percent, as per the US Geological Survey, but sizeable portions of the market were still made up by ceramics and glass (30 percent), lubricating greases (8 percent) and other industrial uses.
Lithium is also used in pharmaceuticals, lubricants and heat-resistant glass.
4. There are many different types of lithium products
After lithium is extracted from a deposit, it is often processed into lithium carbonate, lithium hydroxide or lithium metal. Battery-grade lithium carbonate and lithium hydroxide can be used to make cathode material for lithium-ion batteries. Most contaminants must be removed in order for either material to be considered battery grade.
Hydroxide tends to be more expensive, but can produce cathode material more efficiently and is actually necessary for some types of lithium-ion battery cathodes, such as nickel–cobalt–aluminum oxide (NCA) and nickel-manganese-cobalt oxide (NMC).
In addition to battery-grade materials, there is also a market for technical-grade lithium. Technical-grade lithium products, such as technical-grade lithium concentrate, sell for a cheaper price than battery-grade products, and are used in applications such as glass and ceramics. Technical-grade lithium products must have very low concentrations of iron.
5. Prices can be hard to find
Like most critical metals, lithium is not traded on any public exchange, and the world’s top lithium producers don’t often give out stats. This is certainly a basic lithium fact. For a long time, most of the world’s lithium was produced by an oligopoly of producers often referred to as the “Big 3,” which included Rockwood Lithium (now owned by Albemarle (NYSE:ALB)), Sociedad Quimica y Minera de Chile (NYSE:SQM) and FMC (NYSE:FMC).
Producers in China have grabbed a larger share of the lithium market in recent years, but the lack of information on pricing has continued. However, interested investors can look to experts in the lithium space for market reports and price forecasts.
This article was originally published by the Investing News Network on October 20, 2015.
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