October 12, 2009
A Worldwide Battle To Control This Wonder Substance
A pitched battle has broken out across the globe to gain control of as much of this precious resource as is humanly possible.
From the Australian Outback to the wilds of northern Tibet… from deep in the vast deserts of Nevada to the arid flats of South America…
The world’s biggest players are wasting no time staking their claims. Just take a look at their opening salvos in the race to control the 3rd Element:
Korea and Japan are collecting over 150,000 tons of potential reserves in Western Australia.
The U.S government recently doled out $8 billion (this first step in a $25 billion loan program) to gear up production in the U.S.
China just laid out $429 million to build the country’s largest refinery on the Yangtze River – even as they send troops into Tibet to lock up new reserves.
Warren Buffett recently took a multi-million-dollar stake in a company that processes the 3rd Element into refined fuel. His investment has tripled in value in the last six months.
The United Arab Emirates, the world’s third-largest oil-exporter, just announced a 40% stake in a company developing the technology to fire up the 3rd Element. The biggest oil producers know this technological shift could determine the fate of their countries.
And this supply/demand mismatch has already doubled prices in just one year.
And all this is happening as exploding demand has the potential to drive prices up 100% in 12 short months… and very likely over 400% in the next 36 months.
The Mad Rush for the 3rd Element
*It’s used in everything from medicines to nuclear bombs
.
*It’s the lightest metal in the universe.
*Its extreme flammability makes it one of the most compact and powerful fuels.
*And as with oil, there’s not enough of it to go around.
This element is found only in certain places on earth. And its location and form can make it extremely costly to mine and refine.
I’m talking about lithium… the 3rd element on the periodic table.
Until recently, lithium was a minor commodity used in glass and mood stabilizing drugs.
But then, lithium-ion batteries revolutionized the electronics industry forever.
Suddenly, lithium demand went through the roof – and continues unabated.
As Forbes magazine noted last year…
When Blackberries and iPods exploded on the scene, demand doubled for lithium carbonate – the refined form used in batteries – from 2003 to 2007.
Lithium’s ultra-light weight and volatility make it the perfect fuel for powering small batteries. Lithium-ion batteries are lighter, smaller and pack more power than conventional batteries. So they’re perfect for cell phones and laptops.
But if this was just about small electronics, I wouldn’t be writing to you now…
The Electric Car Revolution…Starts Now
As Forbes announced, “The gas engine made petroleum the world’s biggest commodity. The electric car could do the same for the 3rd element.”
There’s little doubt that lithium is about to become the “new oil.”
It’s already on track to replace up to 148 billion barrels of oil.
And what oil did for early investors… lithium could do for early investors.
Profits piled up into family fortunes like those of Rockefeller, Getty, and Pickens.
You see, lithium-ion batteries are on the cusp of powering the hybrid and electric car revolution. And revolution is not too strong a word for it.
Starting in early 2010, every automaker on the planet will begin flooding the market with electric-powered cars…
Mercedes launches its S400 HYBRID sedan early in 2010. E-Class, M-Class, and GL-Class will be tailing it closely.
Tesla Motors has delivered its American-made Roadster, an all-electric two-seater sports car and plans to debut its Model S sedan in 2011.
Nissan has retooled a factory in Tennessee to produce 150,000 pure electric cars, called The Leaf.
Ford is bringing out the pure electric Transit Connect commercial fleet van in 2010 and plans to invest $550 million to retool a Michigan truck plant to manufacture a pure electric Focus in 2011.
Chinese car makers Hafei and Coda are planning to bring a mass-produced electric car to market in California in fall 2010.
The Government Is Throwing Gobs of Money At Lithium
Governments around the world – but especially ours – are throwing gasoline onto the bonfire of demand for lithium car batteries…
Here in the U.S., the Energy Independence and Security Act toughened up fuel efficiency standards to 35 mpg by 2020.
But Obama stiffened the standards even more in May, raising fuel economy standards to 39 mpg for cars and 27 mpg for trucks.
And he bumped the deadline up four years to 2016. In fact, the standard goes up 5% a year starting now until the goal is reached.
But here’s the key point…
These new rules flat out guarantee the lithium-ion battery is the only way car makers can meet the new standards – no other fuel source comes close.
Everyone Is Grabbing Lithium Profits
Metal Miner reports, "Johnson Controls and Saft of France are building a battery production facility in Michigan supported by $220 million of state aid."
*GE, ConocoPhillips, and Detroit Edison… are behind the $69 million deal to supply Chrysler with batteries
*“At GM, we see the development of vehicles powered by electricity as key to the transformation of our industry. And advanced battery technology, is at the heart of this transformation," said GM’s Vice-Chairman of Global Product Development.
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