Lithium may be present in all of us but it seems like the Nevada desert is where a new metal rush is beginning to turn into a stampede.
The soft, silver-white metal belonging to the alkali metal group has traces in all organisms. The element serves no apparent vital biological function, since animals and plants survive in good health without it, though non-vital functions have not been ruled out.
But its many and varied other applications appear to be what has several companies, such as Sienna Resources (CVE:SIE), and Enertopia Corp (OTCMKTS:ENRT, CNSX:TOP) taking a major interest in it. Meanwhile, Tesla Motors (NASDAQ:TSLA) in partnership with Panasonic is building a "gigafactory" lithium battery manufacturing plant near Reno, Nevada.
Lithium and its compounds have several industrial applications, including heat-resistant glass and ceramics, lithium grease lubricants, flux additives for iron, steel and aluminium production, lithium batteries, and lithium-ion batteries. These uses account for more than three quarters of lithium production.
Sienna announced last week that it had acquired the Esmeralda project in Clayton Valley, Nevada, which is prospective for lithium, and plans to start operations shortly. Read more here
Sienna shares, which had been trundling along at around C$0.02 until the end of January have since soared to a recent peak of C$0.17 after its Esmeralda news.
As reported earlier on Tuesday, Enertopia has created a new business division as it struck a deal in the lithium brine sector. The group has entered into a letter of intent over a proposed option to purchase a 100% interest in around 2,560 acres of mining claims in Nevada. Read more here
After Enertopia's news on Tuesday its shares have rocketed by 89% to $0.02 at time of going to press. Earlier, they were up 200%.
Lithium carbonate spot prices are one example of how the sector is becoming hot. After a brief dip in 2008 - and despite the depressed prices of other commodities - lithium prices were rangebound at around $6,000 per tonne until late 2015. Since then they have soared to close on $14,000 per tonne, more than doubling, according to data from Citigroup.
At prices like those the metal is becoming increasingly precious. Much of the demand for lithium is driven by demand for rechargeable batteries, but its use in other fields means it is the 21str century material with a broad-based growth horizon.
Lithium is just now coming of age due the accelerating pace of technological change. It was only ten years ago that technology allowed fracking to go mainstream and in the past five years this technology has shaken up the world's oil, natural gas and LNG markets.
So could we see lithium and other new storage technologies having similar disruption capabilities over the coming decade?
Well, yes and no. The problem about a rush is anyone's ability to manage it. So it all hinges on whether the makers of rechargeable lithium batteries will be able to source enough batteries at a rate that doesn’t push the price-tag beyond the mass-market threshold.
Even though the real potential still remains to be seen, the amount of optimism produced clearly exceeds this industrial metal's production level. Analysts at Goldman Sachs last December called it "the new gasoline".