Lithium is one of the most prominent minerals which is used in the development of electric batteries. Besides electric batteries, Lithium is also used in the production of ceramics, glass, and consumer electronics as well as mass energy storage systems.
The outlook for lithium demand is getting stronger day by day, driven by the rise in the demand for electric vehicles. There are many big and small companies which are planning to enter the lithium market in order to take advantage of this growing lithium Demand.
Recently, American multinational conglomerate holding company, Berkshire Hathaway was in the news as it was speculated that it is planning to enter the lithium market. Earlier, many media houses were suggesting that Berkshire Hathaway was planning to produce lithium from its geothermal wells which are located in California, however, Berkshire Hathaway has refused these reports and it confirmed that it has not signed any agreement to extract lithium from its California geothermal wells.
Through its subsidiary, Berkshire Hathaway Energy, Berkshire has set out its roots in the energy sector. Berkshire Hathaway Energy is involved in the production, transportation and delivery of energy. The company produces energy from various fuel sources, including coal, natural gas, wind, hydro, solar, nuclear, geothermal and biomass.
Berkshire Hathaway Energy’s portfolio consists of locally managed businesses which deliver affordable, safe and reliable service each day to millions of customers around the world. BHE Renewables, a unit of Berkshire Hathaway Energy, is having a capacity to produce around 338 megawatts of energy through its 10 geothermal facilities which are located in California.
Production of lithium from California wells could have provided a stable supply of lithium to large lithium consumers like Tesla. Tesla is one of the largest consumers of lithium in the world and in the past few years it has secured various lithium supply agreements from different lithium producer.
Last year, Australia’s leading lithium producer, Kidman Resources Limited (ASX: KDR) signed a binding agreement with Tesla to supply lithium hydroxide to Tesla for an initial term of three years on a fixed-price take-or-pay basis.
In Australia, there are many companies which are planning to enter or already entered into the lithium industry.
Galaxy Resources Limited (ASX: GXY) is a global lithium company listed on ASX which wholly owns and operates the projects in Canada and Australia. The company is currently optimistic about global lithium demand and its outlook.
GXY’s shares last traded at $1.980 with a market capitalization of circa $815.05 million as on 13 March 2019.
Pilbara Minerals Limited (ASX: PLS) is an Australian lithium producer which focusses on the development of its wholly owned Pilgangoora Lithium-Tantalum Project. In the last one month, PLS’s shares increased by 10% as on 12 March 2019. PLS’ shares traded at $0.720 with a market capitalization of $1.25 billion as on 13 March 2019.
With the growing demand for electric vehicles in the global market, particularly in China and Europe, many analysts are having positive views about the outlook of the lithium market.
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