Lithium is experiencing a major economic boom right now, and many businesses are jumping to invest in the light metal. With the demand so high, North American companies like E3 Metals Corp, International Battery Metals, and MGX Minerals are developing technology to extract petrol lithium— an innovation that will allow lithium supply to keep up with the demand.
Mackie Research Capital is a key financier of these companies, and Mackie Managing Director Jovan Stupar says that the brand new petrol-lithium industry currently under development is the future of the market.
The demand for lithium
According to Stupar, there are currently about 200,000 tons of demand in lithium. That demand is expected to grow to about 800,000 tons by 2025, the reason being the green revolution. Battery operated cars and battery storage are key interests for manufacturing companies right now, and that trend will only grow. Petrol-lithium offers a way to balance out supply and demand issues. “The reason we like petrol lithium is because there is an abundant source of brine coming from oil and gas production,” said Stupar. When oil is extracted from wells, water comes with it.
That water is separated from the oil and pumped back into the wells. Companies like MGX, E3 and International Battery are developing technology to extract lithium from the water during this process. This can be done within 24 to 48 hours, as opposed to taking around 18 months with typical lithium-extracting methods in Argentina or Chile.
What the market looks like today
Lithium batteries are a preferred power source for items such as cellphones due to advanced efficiency. Lithium batteries are also on-demand for other electronics and automobile manufacturing. The metal’s ability to function as fusion fuel in multi-sized industrial and consumer products makes its use in today’s market extremely valuable. “Everyone is talking about it,” said Stupar. “Tesla and Chinese manufacturers are looking to get into it. Mercedes, Toyota, GM, Ford and BMW…every one of those car manufacturers are getting into the lithium space.”
Tesla recently came out with their home battery, and Stupar says that this is the next phase of growth in the lithium market.
“People are getting used to lithium and are trying to figure out how to accommodate that demand,” said Stupar, stressing that MGX, E3 and International Battery each have a different take on how to extract petrol-lithium. “The world is large enough to accommodate all three different technologies. These companies are currently at the forefront because we haven’t seen much on petrol-lithium from other countries yet.”
Expected growth
Mackie Research financed MGX Minerals at 18 cents per unit in 2016, and the stock went up about $2.40 over a couple of months. The demand for lithium will quadruple over the next seven years, and as more supply comes online it will balance out that demand.
The supply is dwindling using the current methods, which is why Mackie Research and the three lithium-concerned companies they finance see petrol lithium as the right approach. Lithium will soon be commercially extracted from brine production in Canada and the U.S.
“Wherever there is oil and gas production, those are potential locations for lithium extraction from brine,” said Stupar. “It’s going to help oil and gas producers because now there is a secondary element being taken out. There’s a secondary source of revenue, and Alberta will definitely benefit from that.”
Getting educated about investing
A forum presented by Business in Vancouver and Mackie Research will be held on November 29 at the Hyatt Regency in Vancouver and will feature speakers from E3 Metals Corp, International Battery Metals and MGX Minerals.
“We are expecting investors that are looking to learn something about petrol lithium,” said Stupar of the upcoming forum. “The technologies that are coming out of Canada are probably the best in the world. ” The need for lithium-ion batteries in smartphones, large-scale energy storage, and electric vehicles is drawing out investors, and extensive research and development on battery storage will continue to feed that trend.
