"The wise guys" from Goldman Sachs and UBS are getting their homework checked by Mr Market and rushing to slash their 2024 Lithium supply estimates by 33% and 26%, respectively. This kind of "adjustment" can tell us very loudly two things: they know nothing about the Lithium market and that their trading arms had enough fun already after shorting Lithium stocks and buying back the positions in the best Lithium companies.
"Last time Goldman Sachs "was worried" about your investments in the Lithium Universe and called the coming tsunami of the new Battery Grade Lithium Supply they were buying stakes in the Lithium companies at the same time while retail was selling in panic."
Now numerous marginal Lithium projects with a higher cost of production are being put on the shelves, and even industry giants are struggling to bring existing projects on time and on budget towards the announced production capacity of Battery Grade Lithium.
"The problem with all estimations for the future supply in mining is the difficulty of the process to put new mining operations in place, particularly in a sustainable way. In the case of Lithium, we are dealing not only with mining operations but with literal "chemical soup", particularly in the case of Lithium Brine Operations. Every single project has a unique chemistry. Only a few companies in the world were able to put online successful Lithium operations."
"This is where science meets Wall Street and Bay Street hype. Lithium projects are always delayed, they are never on budget and only a few companies managed to organise operations to reach the previously announced annual capacity production of Battery Grade Lithium."
"Short bets worth billions against some of the world’s largest lithium producers are under threat as a supply glut shows signs of thinning.UBS Group AG and Goldman Sachs Group Inc. have trimmed their 2024 supply estimates by 33% and 26%, respectively, while Morgan Stanley warned about the growing risk of lower inventories in China. The revisions come after lithium prices cratered last year as supply ran ahead of demand, with some producers cutting output.Now, prices of the key material used to power electric vehicles are showing signs of a revival after the rout last year sent stocks spiraling and attracted short sellers. Bets against top producer Albemarle Corp. and Australian miner Pilbara Minerals Ltd. account for more than a fifth of their outstanding shares, or the equivalent to about $5 billion, according to data compiled by Bloomberg.“Double-digit capacity has already been taken out of the lithium market and that usually is a sign that the commodity price is bottoming,” said Jun Bei Liu, a hedge fund manager at Tribeca Investment Partners in Sydney, who holds a long position in Pilbara. Shorting the company “is very dangerous” given signals of support for the metal’s price." (Bloomberg)
Following Ganfeng's announcement about confirmation of their commitment to Argentina, Rio Tinto announced their plans to invest $350 million in the Argentina Lithium Project. The total ticket price to start the modest 3,000 T of Lithium carbonate annual production is almost $1.2 Billion after they purchased this project for $825 million from Rincon. You can compare this development with the carefully crafted strategy of Ganfeng Lithium and their development of the Mariana Lithium project in Salta, Argentina.
"Global miner Rio Tinto will invest $350 million at its Rincon lithium plant in Argentina as it works to begin production by the end of the year, the company said this week following chief executive Jakob Stausholm’s visit to the site.“The hard work of our Rincon team is laying the groundwork for our first lithium production by year’s end,” he said in a statement to Reuters late on Monday, after a recent trip to the project in the northern province of Salta.Rio Tinto, the world’s biggest iron ore producer, is one of the few large mining companies betting on lithium even as counterparts such as BHP stay away from investing in the metal, which is used in electric vehicle batteries.The company purchased the Rincon project from Rincon Mining in 2022 for $825 million, and plans to develop a battery-grade lithium carbonate plant with an annual capacity of 3,000 tons." ("Mining.com")
This almost $1.2 billion total investment from Rio Tinto in the Lithium project is a very important confirmation of their commitment to Argentina and plays very well with their investment in the giant Los Azules Copper, Gold and Silver project with McEwen Mining. Rio Tinto's Venture Nuton has invested $65 million in McEwen Copper developing the Los Azules project.
“The new president of Argentina introduced important government policies aimed at supporting business and unlocking the country’s economic potential. Mining is being recognized as an integral part of this economic development plan providing jobs and enriching local communities."
"Kirill has spent many hours writing how "Argentina has everything to become the Power House of the Tesla Energy rEVolution". And we have seen that money, sense and Mandarin are flooding into Argentina as step after step it positions itself on the politically strategic tightrope to supply the copper and lithium commodity deficit devoured by green electric transportation." (Konstantin Klip)
We are building The Green Energy Metals Royalty and Gold Company. TNR Gold is plugged into Tesla Energy rEVolution with our Royalty Holdings on the Mariana Lithium Project with Ganfeng Lithium, Los Azules Copper, Gold and Silver Project with McEwen Mining and Batidero I and II Properties of Josemaria Copper-Gold Project with Lundin mining.
On my blog following the links below, you can find more information about TNR Gold Corp. and our Royalty Holdings. Do your own research, read all disclaimers, as usual, and stay safe and prosper. Join rEVolution!
TNR Gold Mariana Lithium NSR Royalty Partner: Ganfeng Lithium Confirms Its Commitment to Argentina and Expands Its Portfolio
We have another very significant confirmation of the positive business environment in Argentina for TNR Gold royalty projects. Today you can go over the main pieces of our analysis and find out why we are talking about re-rating of market valuations of our assets. Mariana Lithium is on track towards production later this year and Ganfeng Lithium is confirming its commitment to Argentina and expanding its portfolio:
"China’s Ganfeng Lithium will acquire a 15% stake in the Pastos Grandes lithium project in Argentina’s Salta province from Canada’s Lithium Americas for US$70mn, the Vancouver-based company said in a statement.In the same area, Ganfeng has interests in the Sal de la Puna, Pozuelos-Pastos Grandes and Caucharí-Olaroz lithium projects.The Pasto Grandes deal is due to be completed in Q2 and Ganfeng will be able to acquire up to 50% in total under certain conditions.The agreement includes a commitment from both parties to undertake a development plan for the Pastos Grandes basin and test Ganfeng's direct lithium extraction technology to add to conventional evaporation methods that they plan to use at Pastos Grandes.Ganfeng's Sal de la Puna project is being explored by its partner Arena Minerals, and is adjacent to Pozuelos-Pastos Grandes which is due to start production this year and ramp up to capacity of 25,000t/y lithium carbonate equivalent (LCE) within three years.Pozuelos-Pastos Grandes will have a useful life of 25 years and is in the engineering development stage to begin construction this quarter.Just 100km away in Jujuy province is Caucharí-Olaroz, which began production last year with a plan to reach 40,000t/y of LCE. It is operated by Minera Exar, jointly owned by Ganfeng Lithium, Lithium Argentina and provincial company JEMSE.Also in Salta province, Ganfeng is involved in the Mariana projectoperated by Litio Minera Argentina in the Llullaillaco salt flat, which targets production of 20,000t/y of lithium chloride, and the Incahuasi exploration project in the likewise named salt flat.Argentina is the fourth largest producer of lithium in the world. With the announced and injected investments, the so-called Argentine lithium triangle, which also includes Catamarca province, could export more than US$7bn starting in 2025, according to a report published by the Rosario Stock Exchange." (Bnamericas)
“The new president of Argentina introduced important government policies aimed at supporting business and unlocking the country’s economic potential. Mining is being recognized as an integral part of this economic development plan providing jobs and enriching local communities."
"Stability has always been a mantra for our Company - Solid Values in Uncertain Times. Be it fluctuating or stabilised lithium prices, these are royalty projects for keypoint critical metals under industry majors with no input needed; a simple fundamental win maker for shareholders: 1.35% NSR royalty on a major Mariana Lithium project that’s currently being developed by Chinese champion Ganfeng, 0.36% NSR royalty on the giant Los Azules copper project being worked up by McEwen Mining and 7% net profits royalty on Batidero I and II Properties of Josemaria copper project in Argentina under Lundin Mining."
(Konstantin Klip)
"In my opinion, Argentina’s new president Javier Milei represents a low risk to domestic mining projects; the state’s provincial jurisdictional buffer will buffet any radical policies regarding Sino-affiliated projects, plus a goal of boosting national mineral exports keeps lithium and copper projects guarded." (Konstantin Klip)
"During the ongoing REE 2.0 Lithium price war Ganfeng is following its main strategy by using the crash in the Lithium market as an opportunity to consolidate the supply chains. The main efforts of all major players are focused on securing new production capacity for the raw materials and increasing the market share through long-term supply contracts for OEMs, automakers and, increasingly, providers of Energy Storage Solutions among other Lithium battery makers."
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