Mike Fagan,
Editor
June 10, 2022
Goldman Sachs says the battery metals bull market has peaked.
We beg to differ!
Goldman believes that — despite an exponential demand curve for EVs and the raw materials needed to power them — the world will, magically, I suppose, have all the lithium, nickel, and cobalt it needs over the next several years.
Looking at lithium specifically, they see China as being able to ramp up hard rock lithium production to meet or perhaps even exceed growing demand into perpetuity.
Part of that reasoning is at least somewhat correct: China will indeed ramp up lithium production to meet its own needs as part of its mandate to go all-electric by 2035.
But what does that mean for America and its lofty goal of reaching 50% EV sales by the end of the current decade?
What it means is that we’re in serious danger of falling prey to China’s lithium dominance… just like we did over a decade ago in terms of rare earth metals.
Some of you may know… China controls the rare earths market to the tune of about 85%.
Now, they’re doing the exact same thing with lithium.
The Red Dragon has systematically wrestled control of an astounding 80% of the world’s raw lithium material refining and 80% of the world’s production of lithium-ion batteries.
They’ve done this through upward of $100B in strategic investment in the lithium space over the last decade.
China, as most everyone knows, is also the world’s largest producer of greenhouse gas emissions.
And to that detrimental end, the vast majority of China’s lithium production comes from hard rock sources such as spodumene, which is very energy-intensive.
Mining lithium from spodumene emits up to 3.5 times more carbon dioxide than lithium extracted from brines. Hence, China’s push to “go-green” through the mass adoption of EVs is, unsurprisingly, not so green after all!
We’re seeing all around the globe the pitfalls of relying on rogue nations for things like energy, semiconductors, and commodities critical to the green-energy revolution.
Russia’s invasion of Ukraine is just the latest poignant example of that: just look at energy and gasoline prices across Europe and right here in North America.
We already rely on China for rare earths, which are critical to our defense sector and to our national security.
Adding lithium to that unsavory list at the early stages of an EV megatrend that’s projected to quadruple by the end of the current decade is, simply put, one of the worst ideas ever.
Lithium prices have already skyrocketed by some 400% since the start of last year due to rising demand.
And that was before Putin’s war and years of US fiscal and monetary experimenting converged to drive gasoline prices to all-time highs here in America.
I think it’s safe to say that ANYONE who’s saddled with the unfortunate reality of a significant daily commute is now seriously considering swapping out their gas-guzzling combustion engine vehicle for a sleek new EV or hybrid — and FAST!
The bottom line is that America can ill-afford to rely on China for our lithium requirements… especially considering the heated rhetoric that’s currently brewing over the Taiwan situation.
Just last month, Beijing’s top diplomat Yang Jiechi warned, “If the US side insists on playing the Taiwan card and goes further and further down the wrong road, it will certainly lead to a dangerous situation.”
Clearly, America can no longer sit idly by with Xi holding all the cards.
That’s why President Biden recently enacted the 1950 Defense Production Act to boost domestic production of lithium and other critical minerals used to power EVs and other green-energy technologies.
Thus, even if lithium prices have reached an interim peak and are primed for a temporary pullback, there’s still plenty of money to be made by investing in select small-cap North American lithium explorers with solid assets in safe mining jurisdictions.
Our own Gerardo Del Real of Junior Resource Monthly has been right on top of the current lithium boom… just like he was over a decade ago when China took brazen control of America’s rare earths sector.
He made big gains on select North American rare earth stocks back then… and he’s currently doing the same in the North American lithium space for himself and for his subscribers as the broader indices continue to tank.
One of his portfolio stocks just announced a new lithium-brine discovery in Clayton Valley, Nevada. Its shares have gone from C$0.06 to currently around C$0.30 in just the last couple of months with plenty of runway left.
Another one of his recommendations recently made a hard rock lithium discovery in mining-friendly Quebec, Canada.
Its shares have been on a tear from C$0.16 — where he and subscribers of Junior Resource Insider helped finance it — to currently around C$3.75 since early February.
It too could go higher still.
Gerardo bagged yet another lithium winner in late-2021 that more than doubled before being bought out by a larger player.
He obviously has a keen eye for these sorts of wealth-building opportunities… plus he’s able to leverage his contacts in the industry to produce the kind of detailed research few have the capacity to match.
Gerardo just released his June issue of Junior Resource Monthly where he takes a deep dive into the lithium space, including why he disagrees with Goldman Sachs’ assessment AND how he’s putting his subscribers in position for even more green-energy gains in 2022.
He also goes into the uranium market, which is yet another elusive bright spot in an otherwise down year for the broader indices.
He’s had a number of recent winners in the uranium space, with many more to come, as the price of yellowcake is once again gathering steam following a healthy bull market pullback in the spot price, as predicted.
So… if you’re feeling the sting of inflation and are dejected watching the value of your 401k take hit after hit after hit… then you’ll definitely want to take a look at what Gerardo is doing in the junior resource space.
As Gerardo likes to say — “I eat my own cooking!” — and that’s great knowing he’s investing his own money in the stocks he’s recommending to his subscribers.
You can see what’s on Mr. Del Real’s June profit-menu right here.
Mike Fagan
Editor, Resource Stock Digest