Trends in automotives - Lithium-ion?

[Rev]

Saw the posting in General - doesn't seem to be getting much response so may be a better fit here since so many are commodity speculators. As we're all on RS originally for love of cars I thought this would be an interesting article.

As an investment decision, these would only be for play money as it would be fairly high risk. Other smart money investors that got in lithium/battery-tech early includes Warren Buffet (think BYD) and Google.

http://www.revscene.net/forums/toyot...m-t603342.html

Jan. 20 (Bloomberg) -- A Toyota Motor Corp. affiliate will partner with Orocobre Ltd., an Australian mineral-exploration company, to develop a mine in Argentina that will provide raw materials for vehicles powered by lithium-ion batteries.

Orocobre will set up a joint venture with Toyota Tsusho Corp., 22 percent owned by the world’s largest carmaker, to develop its Salar de Olaroz lithium potash project in Argentina’s Jujuy province, the Milton, Australia-based company said in a statement to the Australian Stock Exchange.

Toyota Tsusho will take a 25 percent stake in the project and will provide $4.5 million for a feasibility study, as well as a low-cost Japanese government loan to fund at least 60 percent of the project’s development. This means Orocobre won’t need additional funding for development, Managing Director Richard Seville said in the statement.

“Toyota Tsusho becoming our strategic partner allows Olaroz direct access to Toyota Motor Corp. and its partners such as Panasonic and Sanyo,” Seville said. “These companies have significant expertise and understanding of supply requirements in large format lithium-ion batteries for the automotive industry and consumer sector.”

Orocobre shares surged as much as 46 percent to A$2.04 and traded at A$1.80 as of 1:13 p.m. in Sydney. Toyota Tsusho shares gained 8 percent to 1,518 yen, after earlier jumping as much as 15 percent, the most since October 2005.

‘World-Class’ Deposit

Toyota Tsusho is seeking reliable, low-cost supplies to meet rising demand for lithium-ion batteries for automobiles, the Nagoya, Japan-based company said in the statement.

“The size and quality of the deposit is world-class and we believe will produce high-purity, battery-grade materials required for the global battery industry at a cost that is competitive,” Toyota Tsusho said.

Orocobre will own the remaining 75 percent of the project after construction is completed, and will operate the joint venture, the Australian company said.

Construction is expected to be completed by early 2011, and the mine will be operational by the end of that year, Orocobre spokesman Paul Ryan said in a telephone interview.

Toyota Motor plans to begin retail sales of a plug-in version of its Prius hybrid car powered by a lithium-ion battery in about two years. It also intends to introduce a short- distance pure electric car in 2012.

Toyota established a joint venture in 2007 with Panasonic Corp., then Matsushita Electric Industrial Co., to ensure supplies of lithium-ion batteries for the automaker’s planned plug-in hybrid cars. Panasonic purchased 50.2 percent of battery maker Sanyo Electric Co. last month.

To contact the reporter on this story: Nichola Saminather in Sydney at nsaminather1@bloomberg.net

The company in question trades on ASX - australian exchange and started at $0.10. At closing yesterday it's up to $1.80 with no signs of letting up.

http://www.google.com/finance?q=ASX:ORE

Mining guru Robert Friedland is now openly backing Western Lithium (lithium in US). Last I checked Frieland's ventures have usually done well. Western Lithium trades on TSX for around $2... it launched at around $0.20.

Just curious if anyone else is piqued by this sector, as it seems like automotive companies are all starting to take an interest.

this week was Toyota taking a position in Argentina, last week was Magna announcing a $10 million initial investment in the same country.

Magna buys stake in small lithium miner

Andy Hoffman and Greg Keenan
Globe and Mail Update
Published on Thursday, Jan. 07, 2010 12:01AM EST
Last updated on Thursday, Jan. 07, 2010 7:54AM EST
Canadian car parts giant Magna International Inc. MG.A-T is jumping into the mining sector with a strategic investment in a privately held lithium firm that it hopes will provide a secure supply of the metal used to make batteries for electric vehicles, according to sources.

Magna is understood to have participated in a $10.5-million equity financing by Toronto-based Lithium Americas Corp. that was completed Dec. 23. The equity deal gives Magna the right to acquire a percentage of any lithium produced by the mining company in exchange for an interest-free loan for some of the money needed to develop the project in Argentina.

Although Magna's initial investment is small, it underscores the Aurora, Ont.-based company's commitment to producing components for electric-powered vehicles that will run on lithium-ion battery technology. “They are all coming downstream. Lithium is going to be big and they better have supply,” said a source close to the deal.

Environmental technologies, including lithium-ion batteries, are a potentially huge growth area for Magna as auto makers race to bring hybrid-electric and battery-powered cars to market to meet new fuel economy standards being put in place in the U.S.

Magna developed a battery-powered version of the Focus compact car for Ford Motor Co., which was unveiled a year ago (and now stars nightly on The Jay Leno Show ).

But Magna is also trying to expand that expertise to other auto makers.

Ford and its rivals are seeking financially strong suppliers to help them develop these new technologies, which involve investments of tens of billions of dollars.

Magna is among the most well positioned to do that because of a cash hoard of about $1-billion (U.S.) and expertise in a broad range of auto components, including complete vehicle assembly on a contract basis for several auto makers.

Magna chairman and founder Frank Stronach said last year that he would like to see the batteries assembled in Canada and that governments want Magna to assemble batteries here.

Tracy Fuerst, a spokeswoman for Magna, would not comment.

Lithium Americas is just one of scores of junior mining firms with lithium development projects that have sprouted recently to take advantage of the sudden investor interest in the commodity.

The company hopes to produce lithium from brine lakes, which it says is cheaper than extracting the mineral from rocks.

Although lithium has been used for years in cellphones, high-tech alloys and by the pharmaceutical industry, the prospect of soaring demand from the auto sector has made it the metal of the moment in the junior mining sector.

Industry analysts estimate that if hybrid and electric vehicles reach 10 per cent of total vehicle sales, the market for lithium-ion and other advanced batteries could grow to between $10-billion (U.S.) by 2015 and $15-billion by 2020. Currently, the lead-acid battery market is worth between $7-billion and $10-billion.

Lithium Americas was created last summer as a spinoff of Latin American Minerals Inc., which trades on the TSX Venture Exchange and still holds a 17-per-cent stake.

Boasting lithium development projects in the Argentine provinces of Jujuy and Salta, the privately held Lithium Americas is expected to conduct a public stock offering within the next year that could raise between $25-million (Canadian) and $50-million.

Raymond Mitchell, chief financial officer of both Lithium Americas and Latin American Minerals, would not comment. “I can't comment on who our investors are,” he said.

[JDMStyo]

Mitsubishi buys into lithium company - Galaxy

http://www.miningaustralia.com.au/Ar...an/511341.aspx

Junior lithium producer Galaxy Resources has signed an off-take agreement with Japan’s Mitsubishi Corporation for what it calls “a significant proportion” of its battery grade lithium carbonate production.

According to Galaxy Resources managing director Iggy Tan, the agreement marks an important milestone for the company’s lithium project.

“By 2010, Galaxy’s Mt Cattlin mine will be the world's second largest hard rock producer of spodumene,” he said.

“Through the development of its value adding lithium carbonate plant in China, the company will be the largest and lowest cost battery grade lithium carbonate producer in Asia.”

Mitsubishi, Japan’s largest general trading company, will use Galaxy’s lithium to produce large capacity and high performance lithium ion batteries for its automobile sector.

Galaxy said that it is also currently in discussions for similar off take agreements with other major groups in China and other Asia Pacific regions.

[misteranswer]

This doesn't mean lithium prices and their companies are doing well. It could just be Toyota is hedging against the increase in cost of the batteries.

[JDMStyo]

Li prices is stablizing but the supply is shrinking - hence all the automotive guys jumping to secure their own resources. Do your own research, here's a comparo of a few TSX and ASX (Australia exchange) companies YTD. Granted anything from last year this time is up 2-3x.

[wouwou]

I thought some South American country has the biggest Lithium Ion deposits that can last 5 centuries of usage, and it's not being developed because the price for Lithium Ion is way too cheap right now?

I read about this sometime last year.