Monday, 22 June 2015

Security Of Lithium Supply: SQM Stock Still Down On News Chile Wants To Revoke Mining Leases.

  Here comes the perfect storm for the lithium supply chain. Politics, bribes and fight around the "hot assets" in Atacama are not the best ingredients for the hungry Chinese companies ramping up battery grade lithium supply for the coming Megafactories all over the world. Meanwhile Tesla Gigafactory is still relying on Panasonic to sort out all lithium supply issues. Price of battery grade lithium was going up even before these political games around SQM and now rain storms will add to the strains on production in Atacama. Now you can better appreciate why Chinese giant Ganfeng Lithium is financing and developing with International Lithium our J/V projects - security of Lithium supply is taking the central stage for the ongoing electric rEVolution.

Elon Musk's Gigafactory Battery Plan Spurs Lithium Producers To Weigh New Plants.


  News about the potential shortage in battery grade lithium supply is travelling fast and now hitting the mainstream media.

Tesla Gigafactories: Is There Enough Lithium to Maintain the Growth of the Lithium-Ion Battery Market?

Joe Lowry: Lithium Capacity Additions Will Be Short Of Demand.

"Joe Lowry is sounding the rising alert for all industry insiders about the coming shortage of lithium. Tesla is waiting for Panasonic to solve all the supply problems, but the growing demand is already pushing prices higher even before Gigafactory comes on-line! The ignition of mass market for electric cars and energy storage will come with lower lithium battery cost. Gigafactory promise us to bring the magic $100 per kWh. Supply of lithium will become crucial and its security will be even more important than its price.
  Our partner Ganfeng Lithium controls with other Chinese companies 75% capacity of battery grade lithium hydroxide now. We are moving into the new landscape for critical materials which are powering the green revolution. Stay tuned for the update from our lithium exploration programs on J/V projects in Ireland and Argentina."

Joe Lowry: What The Beginning Of Lithium Shortage Looks Like.  

  "Joe Lowry from @globallithium presents another evidence of growing constrains in the lithium supply chain. He knows International Lithium strategic partner Ganfeng Lithium very well and has covered its incredible growth in his previous articles, which you can find on this blog as well. Read more."

International Lithium Corp. Updates on Drilling Programs in Argentina and Ireland.

  We have great news today from our both J/V projects with Ganfeng Lithium! You already know about my personal vision for the lithium industry and our strategic partnership between International Lithium and Ganfeng Lithium from China. Now we have results coming in from our exploration and development programs.

Lithium Investing News:

By Teresa Matich

Sociedad Quimica y Minera de Chile (NYSE:SQM) fell no less than 13 percent during trading hours last Thursday following news that Chile is aiming to revoke the company’s land concessions in the Atacama. 
According to Bloomberg, Santiago-based newspapers reported Thursday that Chilean investment agency Corfo is seeking to end an arbitration process over fertilizer and lithium leases, and is seeking to terminate contracts. Corfo claims that SQM has underpaid contracts and sold products at below-market prices.
SQM responded to a letter from the Santiago stock exchange on Thursday, stressing that “SQM and its subsidiaries maintain a lease agreement in force with Corfo with respect to the exploitation of mining property in the Salar de Atacama.” That response was also aimed at press reports that Corfo has rejected SQM’s conciliation proposal, implying the termination of the lease agreement.
Corfo told Bloomberg that it isn’t able to comment on the news as it’s still in legal proceedings with SQM. However, emol (in Spanish) quotes government officials as saying that SQM is not a suitable company to have contracts with the state of Chile.
Still, SQM denies Corfo’s allegations in Thursday’s letter. “SQM maintains its position that it has fully and timely complied with its obligations as established in the lease agreement,” the company states. “The agreement is currently operating normally, just as it has in the last 20 years. According to the lease agreement, any differences between the parties must be resolved through an arbitration proceeding.”
All of those developments follow news from March regarding probes into Chile as part of a wider investigation into bribery and tax evasion that’s also looking at possible illegal campaign finance contributions to Chile’s right-wing UDI party by financial firm Banco Penta. Three SQM directors representing PotashCorp (TSX:POT,NYSE:POT) resigned at the time, while CEO Patricio Contesse was terminated.
On top of that, floods and heavy rains in Chile at the end of March led SQM to halt some of its operations in Chile’s north as a preventative measure.
With SQM being the world’s biggest lithium producer, Corfo’s allegations have no doubt caught the attention of those in the lithium space. Certainly, while SQM has stressed that nothing has changed with regards to its lease agreements, it seems clear that Corfo is not happy with the situation. Lithium investors and lithium juniors will be watching for more news on the subject from SQM.

Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article."