The great lithium rally is losing momentum. Over the past year, the metal found in your smart phone’s battery has become the unlikely centre of an investing frenzy as speculators bet that surging demand from electric-vehicle manufacturers will create a huge new market for the silver-white metal.
Dozens of new lithium miners have popped into existence while the Global X Lithium ETF, which holds a cluster of stocks related to the material, has advanced more than 20 per cent over the past 12 months.
But skeptics note that prices for the metal, an essential ingredient in lithium-ion batteries, have drifted lower in recent months. One observer suggests today’s boom could end as early as next year.
“Lithium is just not that rare,” says Jon Hykawy, a former research physicist who now heads Stormcrow Capital, a Toronto-based firm that conducts research on critical materials. The metal is found in large quantities across the so-called lithium triangle that spans Chile, Bolivia and Argentina, as well as in Australia and many other jurisdictions including Canada.
Four major producers – Albemarle Corp. and FMC Corp. of the United States, SQM of Chile and Tianqi Lithium of China – dominate production. At the moment, they’re enjoying boom times.
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