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Can Lithium stocks rebound? Canaccord Genuity seems to think so. According to their Lithium 2018 recharge report: "We estimate that ASX/TSX lithium equities are implying an average LCE (lithium carbonate) price of $7763, versus our forecasts of $14,650 per tonne, and LT (lithium tantalite) $10,950 per tonne.'’ Canaccord Genuity remains bullish on lithium equities for the near term, and analysts believe prices will continue to soar as automakers led by Tesla continue their search for lithium to build their batteries. Companies in the hunt for lithium production are MGX Minerals, Advantage Lithium Corp., Lithium Americas Corporation and Lithium Chile Inc.
An Over $10 Billion Investment Industry
The global lithium industry has seen hockey stick growth over the past decade. Industry experts believe this trend will continue for another ten years as demand forecasts continue to catch investors' attention. According to Reuters, the demand for lithium is set to grow by 600,000 to 800,000 tonnes over this time period.
A substantial amount of capital spent on discovering new lithium sources is imperative to meet a surging lithium demand. It's estimated that investments totaling $10 billion to $12 billion will be needed in the lithium industry over the next decade. The potential influx of billion-dollar investments represents a catalyst for growth to lithium miners sitting on top of rich resources.
The current market outlook has a promising future for Lithium Chile Inc., which has accumulated a significant project portfolio in Chile, which has the most lithium reserves in the world at 7.5 million tonnes. The company's stock has been on a meteoric rise increasing 20% over the past three months hitting a high of CAD $1.10 on June 1st despite the market experiencing pullbacks during that timespan.
A Lithium Frenzy Happening in Chile
As the global competition for lithium heats up, Chile finds itself at the center stage. Chile's world-famous Atacama Salar alone contains about 30% of the world's lithium resources. The country's rise to prominence as a lithium superpower is a recent development. The nation is being propelled forward by a pro-mining president who is opening up the country's lithium sector to the world.
However, only a few lithium projects in Chile have grades high enough to be processed and developed into end products, and most of them belong to industry leaders like Albemarle and SQM. Many junior miners are also operating in the area, but few have the land position to compete with the big players.