Shame the instability of Argentina fooking up the best Lithium play of the decade

Not talking about ARG here.. check out the economist if you’re confused about Venezuela 2.0.

So let me hit you with a little background on the battery minerals market. The major components of your lithium ion battery (irregardless of which type.. there are ~5, your most popular being cobalt mix) are graphite and lithium. Now until recently those batteries had no real market and have never been a traded commodity. (unlike cobalt for example which is used in steel? or some shit like that for hundreds of years). Now another reason for there being no direct market for lithium is that it comes out of the ground in various concentrations.

Now if you look at successful lithium mining companies, they either have insanely good deposits, have a integrated supply chain, i.e. they mine and process battery grade lithium, or they are old as fuck and have long term contracts with monster lithium processing cos.


You may have seen recently the JV between Panasonic and Toyota. (early 2019) (a key fact in this investigation is that toyota is majority owner with 51%). Now this JV is for the production of lithium ion batteries spcific to the electric car biz. Not only for Toyotas production lines but to sell to others.


So now you need to question. Where will the JV source its lithium from? They not only need to develop prototype, etc. etc. and fund a massive expected future demand.
So I am thinking, why does Toyota have majority in the JV, to make overriding decisions on production, likely have ROFR on battery production etc. etc. but is it possible that they might also be interested in a full integrated supply chain. Now that they have the cars, and NOW the batteries.


So after a little more digging, it can be seen that early 2018. Toyotas trading arm invested 250M for 15% equity of one of the worlds largest and lowest cost producing lithium companies Orocobre Limited.


Now the important thing with this investment is to tie it back to point 1). Being that there is tons of lithium companies around. But the successful ones have the purchase orders lined up before they produce. (To elaborate, cause you can’t just walk into a dealer and sell it… like gold or silver etc. etc.)


Following the deal with toyota the co jumped 300% (early 2018) and has slowly declined since due to now actual orders coming through.. but come on these things take time. Stock jumped a tad around the time of the toyota pana deal. But I think the thing could be a huge play long term. If Yota sources their lithium from it.


Anyways. There you have it. Thoughts?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s