Biggest U.S. Drone Maker Gets Sanctioned By China

Dear Reader,

About 15 million years ago, a cataclysmic event took place in what is now the Western United States. If repeated today, it would likely end human civilization. 

The Yellowstone Supervolcano, with its 1300 square mile caldera, exploded, releasing an estimated 240 cubic miles of lava and enough ash to cover the state of Alaska in foot-deep soot. 

Catastrophic as this eruption was, it’s something that happens on a fairly regular basis, with the three most recent eruptions occurring 2.1 million, 1.3 million, and 600,000 years ago — each releasing similar amounts of energy and contaminants. 

Today, geologists study the Yellowstone region very closely, monitoring the movement of the land with lasers and precision sensors in an attempt to analyze and perhaps even predict sudden changes in activity under the surface. 

Whether knowing it’s about to happen or not will change anything is a question that remains to be answered, but since we’re living in a point in history where another eruption is statistically overdue, geologists are drawn to the Yellowstone Supervolcano the same way astronomers are drawn to black holes and pulsars. 

The Yellowstone Supervolcano’s Gift: 120 Megatons of Lithium

Last summer, this fascination with the caldera led to a rather surprising discovery. 

This is where geologists discovered what could be the world’s biggest concentration of lithium, ever. 

This is where geologists discovered what could be the world’s biggest concentration of lithium, ever. 

Containing up to 120 million tons of the world’s premier battery metal, this ancient geological artifact has been lying dormant ever since. 

It’s a massive resource that will require an equally massive amount of work to tap into. But earlier this week, the company operating this property announced that it had just closed on a huge, multi-billion dollar loan from the U.S. Department of Energy to start producing lithium for the American EV battery market. 

This loan is exactly what’s needed to fund the enormous, and complex infrastructure required to mine the property, and it’s also a good indication of just how dire our domestic lithium situation is. 

Unfortunately it’s not the only indication.

Earlier this week, the U.S.’s biggest drone maker, Skydio, announced that it would have to start ‘rationing’ its batteries to customers after the imposition of sanctions by the Chinese.

The Result Of 30 Years Of Unchecked Chinese Lithium Domination

According to Skydio, these sanctions are a blatant attempt by the Chinese to eliminate its competitors in the drone sector.

The fact that the Chinese government can exert such influence on companies as big and vital as Skydio is a testament to just how important the lithium industry has become. 

The company on the receiving end of this loan has its work cut out for it. New lithium projects typically take about 10 years to go from planning to production, but with the level of urgency seen today, it’s likely that this one will be fast tracked at every possible turn. 

Once things get rolling, the plan is to start producing about 40,000 tons of the metal annually, eventually scaling up as demand increases and the project expands. 

Even at the most modest estimates, the total value of the resource exceeds $300B — or about 300x the company’s current market cap. 

Of course, it will take many years for all of that value to be unlocked, but just based on the news of the loan closing, shares are already up more than 40%. And it’s likely heading even higher as this mountain of federal funding starts pushing the project towards realization. 

We’ve been following this stock for a while now, ever since word of the potential loan first made the news. 

The stock was beat up then, but now, with the lithium bubble long since passed, it looks like things are finally falling into place for the company, for this unique property, and for American lithium as a whole.

Learn more about this now.