Lithium Industries Fires Up with New Technologies, High Demand and Subsidies
EcoloCap Solutions Inc. (ECOS), A123 Systems, Inc. (AONE), China Sun Group High Tech, Co., Ltd. (CSGH) and other players in the lithium-ion battery market may start to heat up as demand for the commodity continues to grow, as evidenced by increased manufacturing capacities, new technology development and government subsidies.
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Lithium Companies Start to Heat Up
At the start of 2010, EcoloCap acquired assistance from Enersol Energy Solutions, a leader of battery and energy system consulting firms in the U.S. The consulting firm will assist in providing ECOS with an accurate and precise cost benefit analysis of upgrading the expansion of manufacturing facilities world-wide. ECOS has devised a plan to construct a production facility in Seoul, Korea, enabling increased production of it’s proprietary Nano Lithium X Battery to be achieved.
In the start of the analysis, Enersol will conduct a report providing concise measurements of the need for physical layout, equipment, and factors of financing. The report will provide EcoloCap with necessary details to construct a manufacturing facility that will enable production maximization to be achieved at a low cost minimization point. ECOS has recognized the substantial increase in Lithium consumption over the last few years, enabling the company to implement a strategic growth strategy while the market is still just warm.
China Sun Group and A123 Systems Inc. have also recognized the lithium market trend, enabling the companies to jump on the band wagon as well. CSGH produces the anode materials used in lithium ion batteries, and is deeply united in supplying raw materials for the production of those batteries. Just recently, the company received a subsidy from the government in the amount of $44,000 for the production of its innovative Lithium Iron Phosphate (LIP) development project, enabling the energy automobile industry to utilize resources provided by the company.
A123 Systems Inc. has also experienced assistance in expanding operations to produce lithium batteries. In April of 2010, the Clean Energy Center awarded a $5 million forgivable loan to AONE for expansion in the lithium market. Also, the company has made a pledge that will possibly add more than 250 jobs in Massachusetts. According to regulatory filing, the company has signed a lease to implement a new 67,000-square-foot research and development facility in Westborough, Massachusetts. AONE plans to utilize the facility for battery assembly, Research and development procedures, as well as warehouse space. In addition to expansionary procedures, AONE plans to transition its headquarters and R&S hub in Watertown over to a larger facility located in Waltham, Mass.
ETF Draws Retail Interest in Sector
The popularity of lithium-ion has led to a retail ETF designed to give individual investors diversified access to the sector. Global X has announced the addition of its Lithium ETF (LIT) that is designed to replicate the Solactive Global Lithium Index, a measure arranged to follow the performance of companies employed in sectors that provide lithium based products (mining, lithium-ion battery production, etc.).
As cellular technology, electric cars, and many other markets experience increased demand for lithium-ion products, the lithium element is becoming more important. Many investors are uneducated about the lithium product compared to metals and elements that have been in existence since forever. Many analysts predict that demand for lithium will “skyrocket” in the near future as more technologies become advanced.
Lithium is one of the lighter metals, and when processed holds the ability to store electric energy more efficiently compared to any other product. The Nano Lithium battery’s offered by EcoloCap show superiority of energy reserve over other batteries in the market, representing a “50%+ cost advantage in the lithium battery market.” Also, the Lithium battery offered by ECOS is light-weight, compact, and carries the ability to perform in harsh environments.
Lithium consumption is being utilized in the production of many products. For instance, companies place lithium products in wristwatches, portable electronic devices, rechargeable batteries, laptops, cell phones, and many other devices. Just to note, electric vehicles are one of the largest products that lithium based products are being used in, and everyone knows that the future for electric vehicles is looking very positive. The lithium-ion battery pack is being utilized in powering the Chevy Volt, Tesla Roadster, Chrysler EcoVoyager, Dodge ZEO, Jeep Renegade and the Saturn Flextreme. Also, BMW is planning the introduction of its remodeled Li-ion battery powered 750i luxury sedan in 2010, enabling further consumption of lithium based products to be achieved.
Increased consumption of lithium products has caused many government officials and companies to search for lithium reserves. Chile’s Sociedad Quimica u Minera (SQM) has been recognized as the world’s leading supplier of lithium materials. Also, it is believed that Bolivia and Afghanistan are sitting on significant lithium reserves as well. U.S. Pentagon officials and geologists made a discovery indicating Afghanistan to be a home to an estimated $1 trillion in untapped mineral deposits. According to one government officials predictions, Afghanistan will eventually become the “Saudi Arabia of lithium.”
Conclusion
Many companies are recognizing growth potential for future lithium demand. Companies engaged in lithium production are grasping the opportunity to expand production facilities. It is obvious that demand for lithium will possibly experience substantial increases in the near future. Lithium is a miracle material that can be used holding energy for long periods of time. Lithium consumption will most likely increase, as evidenced by reports, research, and company stats.
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