The Great Lithium Crunch Is Here

Alex Koyfman

Posted September 7, 2023

Dear Reader,

Google "lithium shortage" and you will be inundated by headlines from some of the world’s biggest media outlets about the impending lithium deficit. 

A recent CNBC article placed this forthcoming shortage around the year 2025, but the fact is there’s plenty of evidence to suggest that the crisis is already here. 

black lithium

One look at the evolution of lithium prices over the last couple years will confirm that there is something very off with the supply-and-demand equation. 

You simply do not see price growth like this without it pointing to something profound and systemic.

MI Black Lithium Image 14

But things might actually be far worse than any of us realize.

You see, there is one thing that almost none of these articles address — the time lag associated with traditional lithium production. 

On average, it takes 10 years for a lithium producer to go from initial drilling to finished product. 

That includes geological analysis, establishment of infrastructure, mining, and refining.

The evaporation process alone can take up to two years.

We Don't Have 10 Years

The Chinese, who have been working overtime since the Deng Xiaoping era to hoard global lithium production, are now consolidating their monopoly by buying up undeveloped properties across the world. 

Still, with the decade-long wait before any salable lithium can be produced, we are simply not keeping up with demand — which is itself soaring. 

The only way to fix this is to do something completely new. 

Right now, in northwestern Alberta, Canada, a small technology company has figured out a way to tap into one of the world’s biggest lithium resources. 

They’re working with oil field brine ponds — brine ponds that have been in use for the last four decades by a small, privately owned oil and gas company. 

Within these brine ponds, an estimated 4.3 million tons of lithium lies dissolved — enough to satisfy global demand for three years all by itself. 

At today's prices, the resource is worth close to $322 billion… But remember, this isn't a mining operation.

The Quickest, Cheapest Way to Produce Lithium

No exploration, no drilling, no refining. This company’s methodology is simply to filtrate the brine and return it to the pond for continued use. 

MI Black Lithium Image 18

Forget a decade of work. Using this extraction technology, salable lithium can be produced in as little as two months' time. 

This company is currently little more than a blip on the radar — valued at just $20 million.

By this time next year, however, the plan is to be in commercial production, scaling up to 20,000 tons of annual production within 36–48 months. 

With a cost of production around $4,000 per ton, that's almost $1.4 billion net revenue per year at today's market prices. 

I don’t think I need to tell you what that would do to the market capitalization. 

Chances are that this will never come to pass, as a buyout is far more likely. 

Want to learn more about it? I recently completed a detailed research report on the technology, the company, and the management team behind it all. 

Enter here for instant access.

Fortune favors the bold,

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Alex Koyfman

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His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Energy and Capital. To learn more about Alex, click here.

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