A look at the lithium market.

Given the exponential development planned for this year around electric cars and the massive development of devices with IoT technology (Internet of Things, in Spanish); As well as the artificial intelligence together with the arrival of the 5G network, it is expected that in the next ten years there will be an exponential demand for the use of batteries based on lithium.

It is expected that the demand for lithium, known as white gold, will skyrocket in the next 10 years as a result of the demand for batteries based on this mineral, mainly in Asia, taking into account that only China plans to manufacture between 200 and 500 million electric vehicles per year.

It is estimated that in the next ten years the mobility of the world will change radically with the rise of electric and autonomous vehicles, the big economies are expected to be moving from fossil fuels to electricity and this will obviously be possible thanks to batteries.

Electronics and chemistry will also be an important pole for lithium, taking into account that aircraft use a lithium-titanium alloy to perform operations.

The fulfillment after the agreements of the UN by some massive economies of the world, has forced to accelerate the production of electric vehicles and solar energy, through accumulators based on lithium, by the known properties of this mineral in terms of the manufacture of ‘ecological’ and long lasting batteries.

Lithium is necessary to make batteries, not only for vehicles, but also for laptops and smartphones. Countries such as India and France already point in that direction with agreements such as the International Solar Alliance (ISA), an initiative to combat climate change and global warming.

EXPLORATION AND PRODUCTION.

Lithium is an interesting market that is changing geopolitics around the issue of global warming, which is why countries such as Bolivia, Chile and Argentina are considered the important Latin American axis because of their mineral reserves that have attracted the attention of large world investors. responsible for the processing of the mineral for the manufacture of all types of accumulators such as India and China, two of the largest economies and technology in the globe.

China and Germany have also committed investments in lithium processing projects in the highland country, for more than $ 5,200 million. For its part, India is hunting not only Bolivian reserves but Argentina, one of the most important worldwide, with investments in this market over Australia and the United States.

Actors from the private and public sector agree that this is due to the differences in the mining codes among the countries of the so-called Lithium Triangle, which Argentina accounted for investments worldwide in 2018.

However, Bolivia has more than 40% of the world’s lithium reserves, in the Salar de Uyuni, the largest salt mine in the world, rich in lithium, covered with salt and minerals. Argentina has the largest resources due to the high exploration activity and Chile has 48% of the total reserves of the world, located in the Salar de Atacama.

The figure shows the reserves and resources of the global lithium update:

MARKETS

China has been dedicated to hunting for the largest reserves along with India in order to dominate the world market. According to Bloomberg, the Asian country took another step in its ambition to dominate the world market for batteries, as the country’s main lithium producer plans a long-term supply agreement with Volkswagen.

This would allow China to close spaces, since in recent past it has managed to close similar agreements with Tesla, BMW and battery producer LG Chem. This undoubtedly creates a Chinese monopoly of the battery market for the next ten years through its company Ganfeng.

Although the German firm Volkswagen did not give details of the agreement, it is estimated that it is one of the largest agreements of that type, increasing the size of the lithium hydroxide market. The agreement between Ganfeng and Tesla is up to 2020 renewable for three more years, while BMW secured reserves for the next five years.

Volkswagen is the world’s largest automobile manufacturer and has a plan in place to increase its sales by 2025, with one segment of electric vehicles representing 25% of those sales.

In view of this, the world lithium market is expected to double by 2023, and traditional electric operation based on centralized generation through large nuclear, hydraulic, natural gas and coal plants is not considered sustainable.

HOW TO INVEST IN LITIO

There are several online or face-to-face brokers that allow any type of investor (moderate or large) to enter the stock market of the main mining and lithium battery manufacturing companies.

If you are an amateur who wants to diversify your investment portfolio, we recommend an online broker, and among the many options, you can use a regulated one with little deposit requirements for minimum investment.

What we should be aware of is that like any investment, it has its risks and the traditional stock market as well as the cryptographic one can sometimes be very volatile.

At the business and professional level, the lithium market promises a little publicized niche with ample growth potential for the next ten key years of the development of future technologies.