Tesla rEVolution And "The Art Of War": Just Rub Table Salt In Lithium Producers' Wounds To Lock In Cheap Lithium Supply.

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Whether Elon Musk really has the magic "table salt" which you can add to the Lithium clay deposits and get the shiny Teslas coming from another side of the hills in the USA remains to be seen. What is for certain now is that Elon has perfected "The Art of War" in order to get the best deals for his Tesla rEVolution. It looks like in order to make the best deals and lock in the lowest prices for secure Lithium supply chains you just need to rub some table salt in the wounds of struggling Lithium producers.

The disconnect between the high voltage of electricity in the air at the Tesla Battery Day with all ongoing excitement during Tesla rEVolution and Lithium industry cannot be more dramatic. Lithium industry is struggling with debt, low Lithium prices, lack of investments and technical issues, while electric cars are enjoying the exponential growth of their sales. The strongest players are getting stronger and the weak ones are getting wiped out.

You can find our discussion about the brutal sobering reality for the Lithium industry below and today Howard Klein is providing again his very insightful analysis for us on "EV Stock Channel". All Lithium companies were electrocuted by the brave statements from Elon Musk at the Tesla Battery Day, but investors have read the small print after that. They were reminded that some people are already "head above the shoulders" in the Lithium industry as Tesla is definitely among the all other auto makers in the EV space.

Tesla Battery Day

Investors remembered that there are numerous other auto companies who are trying to survive and compete with Tesla by producing so fashionable now Electric Cars. Maybe some of them do not have that magic "table salt" or enough clay dirt which you can "just put back into the ground after extracting all Lithium". 

Just to put this brave scientific "first level of physics" approach here into the right context: in order to increase 100 times production of Lithium batteries, we have to increase 100 times production of Lithium, which was just around 300,000 T of LCE in 2019. Will we have enough "table salt" and clay dirt for it? It remains to be seen. Meanwhile, Tesla signed Lithium Spodumene deal to supply its future Lithium Hydroxide production in the US.  

"TNR Gold is plugged into the Tesla Energy rEVolution with our NSR Royalty Holding on Mariana Lithium JV under the management of this giant from China. 

Ganfeng proposed USD $25 million budget for Mariana Lithium in 2020 and "The feasibility study on Mariana Lithium was completed in 2019, and environmental assessment and construction of the project are planned to be conducted," as it has stated in Ganfeng Lithium 2019 Annual Report. 

 

 

Ganfeng Lithium has provided a further update on Mariana Lithium in 2020 Interim Report: "The feasibility study of Mariana Project in Argentina was successfully completed in 2019, and environment assessment, pilot scale test, and design of plant construction are being launched to the project."

 

TNR Gold Royalty Holding On Mariana Lithium Project Operated By Ganfeng: "Tesla, Terafactories And Lithium - The Race To Secure The Supply Chain".

We have been discussing here for quite a while the ongoing Tesla Energy rEVolution and exponential growth of sales for electric cars. The secure supply lines for this rEVolution are starting with the production of Lithium raw materials by the Lithium mining industry. Even before the CoronaVirus pandemic, Lithium industry was starving for capital available for its development. 

Now we have to make an enormous jump from just over 300,000 T of LCE produced in the last year to the required over 1 million T of LCE production annually by 2026. Even some major Lithium companies, like Tanqi Lithium from China, are struggling to deal with debt. 

Others, like Orocobre, have been battling technical problems ramping up production of battery-grade Lithium for years and now are facing even more trouble with the falling prices for its products. Junior miners are fighting for survival. Not everybody will be able to cross this desert, only the strongest Lithium companies will make it. And the so much needed capital will not be the only obstacle in order to build the secure supply chains of this strategic commodity. Lithium industry is riddled with technical problems and other challenges. 

Today you can have another perspective on the ongoing trends in the Lithium industry from this YouTube video produced by "EV Stock Channel". Howard Klein is diving deep into the lithium market and spelling out the internal drivers and dynamics of the Lithium supply chains. Digging through a lot of technical details you can start to appreciate the challenges all major players are facing now in order to meet the exponentially growing Lithium demand. Howard is talking about Lithium demand growing to 2 million T of LCE annual production by 2030. 

It means that we have to accelerate the output from the recent level of production by almost 7 times in a short 9 years. Typical Lithium mine can easily take 5-7 years just to develop it if you have resources and capital available. 

Listening to all the technical problems related to Lithium industry - starting with available capital and continued with numerous technical challenges which are unique to every project - you can better understand the leading role of the companies like giant Ganfeng Lithium from China. 

Ganfeng Lithium is one of the major "Top Lithium 5" in the world who has secured capital, developed technology and is building its own resource base all over the world to meet this exponential Lithium demand. As a testament to the leading position in the market, they have already secured Lithium supply deals with Tesla, Volkswagen and BMW. 

It looks like Ganfeng Lithium even managed to shake of the CoronaVirus fever and resumed its uptrend already as well. From the very early days, Ganfeng Lithium was taking strategic steps in order to build up its own Lithium raw materials base. 

We started working with Ganfeng Lithium in 2009 at TNR Gold. Today, after many years of development and many dozens of millions of dollars invested in Mariana Lithium we are holding NSR Royalty on this project under Ganfeng Lithium management. 

The Green Energy Metals Royalty and Gold Company is plugged into the Tesla Energy rEVolution with our unique business model. We do not have to contribute any capital to the development of this project. Analysts, like Dr Ryan D Long, are already applying some of their valuations to our Royalty Holdings. 

Now the world is waking up to the realities of the post-pandemic economy and cheap Lithium batteries change everything. Electric cars are already cheaper to own than comparable ICE models. The ICE Age Is Over. Electric cars are better and will be cheaper to buy as well very soon. We have The World Just Before The Internet - we are entering the mass market for electric cars. This kind of unique investment opportunities comes once a generation. 

I was very pleased to see that after the announcement of the increase in Lithium resources of more than 250% announced in February Ganfeng Lithium has published in their 2019 annual report: "The feasibility study on Mariana Lithium was completed in 2019, and environmental assessment and construction of the project are planned to be conducted". Below you can find more information about GEM Royalty TNR Gold for your own research.