Li-ion rechargeable batteries, made of high-density units, power mainly portable equipment. The expected growth of the Lithium market is to come primarily from increased demand for smartphones, tablets/PCs, digital cameras, and power tools. Additionally, the report indicates, the automobile industry is to have an important input due to the expanding EVs market. NRG Metals NC (OTC: NRGMF), Tesla Inc. (NASDAQ: TSLA), Albemarle Corporation (NYSE: ALB), Sociedad Quimica y Minera de Chile (NYSE: SQM), FMC Corporation (NYSE: FMC)
Lithium owes its growing popularity to technologically innovating companies, with Tesla playing a major role. A good example is a recent agreement between the Australian Government and Tesla involving a project to build the world´s largest Li-ion battery to store renewable energy in South Australia in partnership with French energy utility Neoen. A report by The Guardian stated that Teslas´s CEO Elon Musk went on to explain the battery´s benefits and functionality, “You can essentially charge up the battery packs when you have excess power when the cost of production is very low; and then discharge it when the cost of power production is high, and this effectively lowers the average cost to the end customer. It’s a fundamental efficiency improvement for the grid.”
FinancialBuzz.com (as cited in PRNewswire, November 16, 2017) – NRG Metals NC (OTCQB: NRGMF), also listed on the TSX Venture Exchange under the ticker symbol ‘NGZ’, earlier this week announced breaking news that the Company had completed various agreements to enter its strategic alliance with Chengdu Chemphys Chemical Industry Co., Ltd. for the exploration and development of the Company’s Hombre Muerto North Lithium Project (“HMN Project”) in Salta and Catamarca Provinces, Argentina.
Upon completion of the first tranche of the private placement, the Company entered into an offtake agreement with Chemphys covering all lithium products produced from the HMN Project. The offtake provides for the sale of lithium at market prices.
Chemphys will have a right of the first offer to negotiate portions of the Company´s production acquisitions. It includes the annual production of lithium products the Company acquires from any other lithium project. As per its entitlement to acquire or sell lithium products, such right on terms and conditions apply as the Parties may agree.
The offtake agreement is subject to the Company (i) establishing the necessary mineral reserves in commercial quantities and quality, (ii) building the necessary mining and processing facilities to extract and process lithium products, and (iii) obtaining sufficient financing on commercially reasonable terms in order to finance the achievement of each of the foregoing (i) and (ii) sufficient to achieve commencement of commercial production. If the Company is unable to satisfy these conditions within three years, the offtake agreement shall automatically terminate, (unless the parties otherwise agree in writing)
Ancillary Rights Agreement
The Company and the Placee also entered into an ancillary rights agreement which provides for the following: (i) the right of the Placee to retain at least one Board seat so long as it owns at least 10% of the Company shares or the offtake agreement is in force, (ii) a right to increase the Placee’s Board representation proportionate to its share ownership, (iii) a right to maintain the Placee’s pro rata share ownership, (iv) a right of the Placee to representation on a Project Advisory Board in respect of the HMN Project, and (v) an obligation of the Placee to undertake a broad distribution of its securities should it determine to dispose of its shareholdings in the Company…
Adrian Hobkirk, President and CEO of the Company quoted, “We are very pleased with this raise and relationship with Chemphys. With the completion of this private placement and the financial support of warrant and option holders, the Company is now fully funded to carry out its work program on the HMN Project.”
Tesla Inc. (NASDAQ: TSLA) and Panasonic Corporation
These have signed an agreement for the construction of a large-scale battery manufacturing plant in the United States, known as the Gigafactory. According to the agreement, Tesla will prepare, provide and manage the land, buildings, and utilities. Panasonic will manufacture and supply cylindrical lithium-ion cells and invest in the associated equipment, machinery, and other manufacturing tools based on their mutual approval. According to a blog posted by The Tesla Team earlier this year, at the Gigafactory, Tesla and Panasonic begin mass production of lithium-ion battery cells, which will be used in Tesla’s energy storage products and Model 3.
Albemarle Corporation (NYSE: ALB)
It reported double-digit growth in the third quarter. Lithium and Advanced Materials reported net sales of $343.6 million in the third quarter of 2017, an increase of 42.9% from third quarter 2016 net sales of $240.4 million. The $103.1 million increase in net sales as compared to prior year was primarily due to favorable pricing impacts, increased sales volumes and $1.6 million of favorable currency exchange impacts. “In the third quarter, we delivered the seventh consecutive quarter of year over year revenue growth excluding divested businesses,” said Luke Kissam, Albemarle’s Chairman, President, and CEO. “Our revenue, adjusted EBITDA and adjusted diluted EPS grew by 15%, 11% and 19%, respectively, compared to third quarter of 2016. Lithium led the way and is now forecasted to grow adjusted EBITDA by over 50% versus 2016. Our Wave 1 expansion projects in lithium remain on schedule, and our work related to lithium yield improvements and exploration of new resources is producing preliminary results meeting our expectations.”
Sociedad Quimica y Minera de Chile (NYSE: SQM) Sociedad Química y Minera de Chile S.A. (NYSE: SQM)
It is an integrated producer and distributor of lithium, iodine, specialty plant nutrients, potassium-related fertilizers and industrial chemicals. On September 11, 2017, the company announced that the Company and its subsidiary SQM Australia Pty Ltd, have signed a purchase agreement with MH Gold Pty Ltd, Montague Resources Australia Pty Ltd, and Kidman Resources Limited to acquire 50% of the assets in the lithium mining project called Mount Holland, located in the State of Western Australia, Australia. Patricio de Solminihac, CEO of SQM, commented: “We are very pleased to have finalized the documentation required to begin this partnership with Kidman. We are convinced that the capabilities we have developed in over 20 years producing and commercializing lithium products, will be fundamental to successfully develop this project together with our partners”.
FMC Corporation (NYSE: FMC)
It has served the global agricultural, industrial and consumer markets with innovative solutions, applications, and quality products. The company operates its businesses in three segments: FMC Agricultural Solutions, FMC Health and Nutrition and FMC Lithium. FMC Lithium is a leading producer of high-quality organic and inorganic lithium compounds used for energy storage, extended battery life, fine chemicals, and polymers, as well as industrial, chemical and construction applications.