Lithium buzz has returned to the mainstream media yet again. I was almost starting to think the hype had finally subsided.
Chile, home of the world’s second-largest lithium reserves, just shocked investors by nationalizing its lithium mining industry. Major producers like Albemarle will now be taking their orders directly from President Gabriel Boric.
Skittish investors jumped ship almost immediately, citing concerns that profits would slip away in favor of a national agenda. We saw the same fear play out in the oil market when Brazil’s new president came into power.
Others saw an opportunity to buy a dip that most likely will never exist again in this market. Lithium can only go up from here.
Therefore, the question on so many of our readers’ minds is the obvious one: What does this mean for me?
Well, it’s not exactly a one-sentence answer.
In a market as turbulent as lithium, this is far from the only source of uncertainty. Critical raw materials are almost always subject to intense volatility, whether it be related to supply issues or political squabbles.
Chile is painfully aware of this fact. The country slumped into a historic depression in the 1930s after global demand for saltpeter, a major component of gunpowder, bottomed out.
Deprived of its largest export, Chile was forced to turn elsewhere. Nitrate mining in annexed territories helped stave off an imminent economic collapse, but it didn’t exactly mint any billionaires.
Today, Chile is hoping lithium will be its new saltpeter. Leaders grew tired of watching foreign companies pillage their national resources, and I can hardly admit I disagree with that.
But we are investors first and foremost. I applaud the Chilean government for sticking up for itself, but we are here to make money.
I’ve already had people ask me if they should sell off their lithium investments. After all, if one country goes national, why wouldn’t everyone?
My answer to them is a resounding “no.” Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.The Best Free Investment You’ll Ever Make
The Lithium Market Is in for a Catastrophic Shake-Up
Even if Chile were to declare lithium mining illegal today, I wouldn't count on it having the effects these pessimists are getting themselves worked up over.
In fact, I wouldn’t pay too much attention to any single miner. The industry is about to get much, much bigger than that.
Analysts claim we currently have nowhere close to the levels of battery-grade lithium needed to support an entire planet's worth of EVs.
They're absolutely right.
But their assumption relies on the fact that once lithium is mined and used, it goes straight into a landfill. That won’t be the case for much longer.
I don't consider myself an environmentalist, but the thought of reburying all that white gold is almost painful.
So what if we could satisfy the entire planet's lithium demand without a single extra mine being built?
It sounds impossible, but this new technology extends the life of every ounce of lithium indefinitely. It could eventually make the lithium industry 100% sustainable.
Very few companies currently have the patents and tech expertise to make this work, but one small cap we’ve been tracking has the ability to recycle lithium batteries and recover 99% of the lithium inside.
I can’t overstate how utterly disruptive this technology will be to an industry that is still somewhat young. It could one day render mining obsolete.
Lithium mining, refining, and battery production currently represent a market worth billions of dollars each year. This tiny company could be the one to completely reorganize it, making bank in the process.
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