As we have discussed, Energy Storage will drive the next chapter of Lithium demand, and humanoid robots will be coming next into the picture with every new headline about the groundbreaking technological progress. Today, we can dive into more details to better understand the Lithium market demand and supply.
The first positive sign is coming from China. Following the confirmation of the continued exponential growth for EV sales, the Lithium market shows signs of life. Lithium prices are slowly recovering following the cut in production and growing demand.
This video provides a great analysis of the Tesla Energy business. It can help us understand the potential of energy storage growth and its implications for the Lithium demand in the coming years.
"Out to 2030, the global energy storage market is bolstered by an annual growth rate of 21% to 137GW/442GWh by 2030, according to BloombergNEF forecasts. In the same period, global solar and wind markets are expected to see compound annual growth rates of 9% and 7%, respectively. Much of the growth in energy storage investment is being driven by mandates and targeted subsidies, ranging from solar and wind co-location mandates in China, to the Inflation Reduction Act and state-level policies in the US. New support schemes are also emerging across Europe, Australia, Japan, South Korea, and Latin America." (BNEF)
"Today we are only starting to talk about Energy Storage Systems being implemented on a scale which allows us to move really fast forward into decentralised Energy Generation based on Solar and Wind. Elon Musk and Tesla Team are presenting their Master Plan for a sustainable plentiful future on Earth."
"The ESS sector is the fastest-growing market for battery market, with a compound annual growth rate (CAGR) of 22% projected over the next decade. This surge in demand is largely driven by the growing adoption of renewable energy sources and the need for efficient electricity grids. Understanding this trend is crucial for stakeholders looking to capitalize on emerging opportunities, while also understanding the competition to secure batteries in this fast-growing space." (Fastmarkets)
According to Albemarle, long-term secular growth is intact: Lithium market demand is expected to increase 2.5X from 2024 to 2030 - from 1.3M T LCE to 3.3M T LCE per year. Projected Lithium demand is a healthy CAGR of 15-20%, while recent reductions to Lithium investments and expansions may create mid-term supply risk.
The next chart demonstrates the most important driver for the supercharging Lithium market again. Albemarle states that current Lithium market prices are well below re-investment economics and unsustainable. A substantial part of the cost curve is operating below breakeven. Higher Lithium prices are required over the next decade to support the over 100 new projects needed to meet anticipated demand.
Lower Lithium prices are the best cure for the low Lithium prices. To meet the projected demand, we need much higher Lithium prices; otherwise, a lack of investments and expansions will lead to deficits. Supply and price shocks are imminent. The cheaper EVs will supercharge the Lithium market again, and China holds the key to this success with companies like BYD leading the seismic shift in the marketplace.
"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."
Meanwhile, in China, Ganfeng Lithium continues its advance from the bottom established in August and back-tested in September.
Humanoid Robots are taking over headlines, and they do use Lithium batteries. Lithium batteries are the top choice for humanoid Robot energy systems thanks to several key advantages. One of the most important is the high energy density of Lithium batteries and that the same advanced energy systems used in electric cars can be adapted to power humanoid Robots.
The latest generation of Optimus GEN III uses a 2.3 kWh, 52-volt Lithium battery with an energy density of 300 Wh/kg. I believe that Solid-State Lithium batteries will be used in future generations of humanoid Robots, these batteries can provide a much higher energy density of 400 Wh/kg now.
“Ganfeng's second-generation hybrid solid-state lithium batteries use lithium metal as the anode and can reach an energy density of 400 Wh/kg, the company said." (CnEVPost)
"For all TNR Gold shareholders, it will be very interesting to note here that Lithium Chloride is the preferred Lithium chemical composition to convert into Lithium metal. Now we can put all recent developments at the Mariana Lithium Project into the perspective of this new battery technology."
Ganfeng Lithium finished summer in style, decisively announcing to the international markets that its share price is coming back to life. Industry insiders were not surprised by Mr Market's attention following the successful development of the giant Lithium projects in Argentina.
We had another set of positive news coming to all TNR Gold shareholders from the 13th International Seminar on Lithium in South America, organized in Jujuy by Panorama Minero. The president of Ganfeng's subsidiary, Litio Minera Argentina S.A., Jason Luo, has confirmed that "the production phase will begin at the end of 2024".
Last year, we repaid our investment loan in full, and our Company has no debt. We believe that the recent market prices of our shares do not properly reflect the underlying value of the shares. Our transformation from the project generation junior mining company into the cash flow generating royalty company will bring the necessary catalyst for the market valuation of our assets.
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 the links below, you can find more information about TNR Gold's Royalty portfolio, potential valuations of TNR Gold's NSR Royalties and how the Mariana Lithium Project is moving into the production phase in Argentina.
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