Most of us know about lithium. It is used in all of our high tech. gadgets and the batteries that power them. Lithium batteries are the top choice for cell phones, ipads, laptops, wireless tool battery packs, and here is the biggee—electric car batteries. Yep, that’s a big market for lithium. It’s going to get much bigger soon.
Today Tesla Motors and Panasonic agreed to produce lithium battery packs together at a new giga factory. The factory still needs to be built but it appears it will be in the southwestern USA.. The plant will make battery packs for the electric Tesla cars and stationary storage units. Actually, Tesla has plans for several of these gigafactories. When these factories are up and running they should make Tesla car batteries much more affordable which should result in more electric car sales because the cars won’t cost so much.. The stationary battery packs will make alternative energy sources more attractive too. You know, store up the energy from solar and wind farms to be used when the sun isn’t shining and the wind isn’t blowing. So where is all this lithium going to come from? Here are a couple probabilities.
Western Lithium USA corp. (WLCDF) is trading around .56/share, 52 week range - .13 to .87. Now pay attention to the last few days chart. This company is attracting some interest, probably because of the pending giga battery plant that Telsa and Panasonic are going to build. They will need plenty of lithium and Western Lithium is poised to supply them what they need.
This Canadian based company is developing a large lithium deposit in northern Nevada. Historical size of the lithium deposit is 11 million tons of lithium carbonate. They are shooting for 26,000 tons annual production of lithium, 90,000 tons of potassium sulfate, and 100,000 tons of sodium sulfate. You can get more information from the company website at www.westernlithium.com. What is attractive about this company is that the lithium can be mined with surface open pit methods instead of the more expensive underground ones. It is also in the right place with nearby transportation and water and electricity already nearby or on site. The first gigafactory will be relatively close by too instead of overseas where transportation costs become a factor. Keep in mind that this is still in the development stage but production should be ready to go by the time the gigafactories are built. We have another product from this deposit that is worth considering. It is hectorite clay which is apparently in short supply. This clay is used in oil and gas exploration. “think shale fracking!”
Now if you still want in on the approaching lithium boom but really want some dividends too then you might want to consider Sociedad Quimica y Minera de Chili (SQM) who have been mining lithium products in the high dry lake beds in Chili for years. Lithium for batteries is just one of their products. Organic fertilizers and industrial chemicals are other products. The company operates on probably the world’s largest lithium deposit known, for now at least. SQM trades around $27.50 and pays out a semi-annual dividend of .8483/share. This dividend has fluctuated between .28 and .84 so don’t count on it for a steady income stream. What is attractive about this company is that is well established and has been producing for several years.
There are a few other lithium producers but these two caught my attention. I went right out and bought some shares of Western Lithium while it is still cheap. Now if several hundred thousand of you will do the same I plan on unloading these shares after doubling or maybe tripling my money. Then I’m buying a Tesla. WooWoo!. Well at least I might buy some tesla stock.