Welcome to Finance and Fury, the Say What Wednesday Edition

Today’s question from Zed “I recently noticed that Australia seems to be opening lots of lithium mines as the demand for Electric Vehicles rises and we turn away from oil. Is Australia at risk of their lithium mines being undercut by competition from South America in the near to medium future?”

 

Today:

  1. Demand for Lithium
  2. Who is providing it?

 

What is Lithium?

  • Alkali metal
  • Used in rechargeable batteries
  • The supply is increasing

 

Where Lithium comes from?

  • Lithium from brine (70%)
  • It can take over a year to extract the Lithium through evaporation
  • Lithium from hard rock (30%)
  • Hard rock drilling and extraction through traditional methods
  • Lithium can potentially be recycled

 

Who are the producers?

  • Bolivia, Argentina, Brazil, and Chile
  • South America produces a lot of the Lithium
  • Australia holds more than 2.7 million MT of identified lithium reserves
  • Chinese companies own more than half of the world’s production

 

What are the Issues?

  • Oversupply dropping prices
  • Australia has a low cost of production
  • Perhaps there is lithium hoarding happening?
  • Long-term issue is the alternatives to lithium-ion batteries
  • The Ryden dual carbon battery, sand battery, and sodium ion battery

 

Looking to invest in companies in this space:

  • They lack the circle of competence
  • Price takers rather than price makers
  • Lithium miners have dropped by 50% in prices
  • A look at 3 ASX companies – Pilbara minerals, Galaxy Resources, and Orocobre Limited
  • Price is based around fair values

 

Summary:

  • Australian mining of Lithium isn’t in too much risk from South America
  • Long-term risk for Lithium is the global demand dropping from alternatives
  • Very speculative – prices determined from supply and demand

 

If you want to get in contact you can do so here at the contact page.

 

 

Should Central Banks be tasked with housing affordability?

Welcome to Finance and Fury. Firstly, sorry for the delay in episode, been over a week now – daughter was born last week, so been pretty busy helping care for her and trying to find a time to record in between work – should be back to normal from next week Interesting...

How much do you really know about cash and how it works?

Episode 26 How much do you really know about cash and how it works? In this episode we discuss Cash. We will run through what type of asset it is, how the currency system works, and how it can be manipulated! We also discuss: The good old days of the Gold Standard...

The Curious case of Pandemic Bonds

Welcome to Finance and Fury, The Furious Friday edition You probably are exhausted about the coronavirus - What you probably haven’t heard about is A little known type of bond created in 2017 by the World Bank. The World Bank – Headquartered in Washington DC – back in...

The Central Banking Bubble and what happens to asset prices if central banks stop QE?

Welcome to Finance and Fury, The Furious Friday edition I often wonder – Why the Fed/Central banks continue with polices that create a massive misallocation or resources and are hurting the economy more than helping – well – what If they cant stop or a collapse might...

What are some different forms of currency and which ones are in our best interest?

Welcome to Finance and Fury. Today’s episode – look at the potential kinds of money what are the best kinds of money are the best for the population In the modern economy - The unprecedented expansion of money supply – created some economic and political consequences...

How to protect an investment portfolio? And is it worth using hedging instruments or changing the assets mix?

Welcome to Finance and Fury, the Say What Wednesday edition Today's Question is from Gabriel With the latest news around trade wars, inverted yield curve and EU collapse, I would love to hear your thoughts on how to protect a portfolio, is it worth using hedging...

What 5 factors create poverty?

Welcome to Finance and Fury, the Furious Friday edition This episode is a flow on from the previous furious Friday episode question from Nick, about poverty. Last episode we talked about how poverty is defined and the economic factors of poverty, which play only a...

Say What Wednesdays: The slippery sponsorship slope and why I’ll never sell out

Happy New Year! Welcome to Finance & Fury’s Say What Wednesday. It’s been pretty quiet on the question front, I’m guessing with everyone away over the holidays… so today will be a quick episode covering the number 1 question I got all of 2018 but never answered –...

The Election Battle between those who pay tax, and those who don’t

Welcome to Finance and Fury Today will be a quick update for the upcoming election and policies in response to the budget plans released last week. This election is becoming a battle for votes among salary earners. In the past we have talked about class warfare...

Crony capitalism and Modern Monetary Theory in action!

Welcome to Finance and Fury, the Furious Friday edition. Today we’re looking at Modern Monetary Theory in action. The first stage, how this is going to be practically done, involves the merging of the central banks and Government Treasury. We’ll also look at the...

Pin It on Pinterest

Share This