Lithium Investors Go for Gold


". . .a lithium staking rush appears to be underway in the South American Andes."

It has a profitable future, given that it is smoking hot. We are talking of lithium, the soft, silvery white metal that reacts readily with water and air. Right now, investors are reacting to it—in a major way.

As car companies ramp up production of hybrid electric vehicles, lithium-ion batteries are a top option.

Moreover, GM, Toyota, Ford, BMW, Mercedes Benz and practically every other carmaker in the world are scratching and clawing for as much lithium as they can get.

The increased demand could turn out to be a nice boon to lithium miners, processors and battery manufacturers.

Reports indicate that Japan, China and Korea are trying to lock in supply deals. In a bid to keep up with demand, a lithium staking rush appears to be underway in the South American Andes.

Dozens of junior exploration firms are looking for deposits in the region, which is home to the majority of the world's lithium supply.

According to a recent Dundee Securities report, the market for batteries, which currently represents 27% of lithium demand, is expected to rise exponentially.

Larger lithium batteries are being incorporated in new products. Last year, heavy-duty machine-tool manufacturers Milwaukee, Dewalt and Bosch "introduced complete lines of tools designed around lithium-ion batteries" that are "expected to eventually replace tools using nickel cadmium batteries," as they deliver up to 50% more power, with longer running times and more charging cycles.

So, as major auto firms have already announced plans to switch from nickel cadmium to lithium-ion batteries for their future generations of hybrid electric vehicles, such uses "could create tremendous increases in demand for lithium," analysts maintain.

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