Next year, Tesla (TSLA) is on schedule to open one of the biggest lithium refineries in North America.
The $365M facility, located outside of Corpus Christi, Texas, will employ around 150 workers and produce enough battery-grade lithium to supply 1M evs per year — according to Elon Musk himself.
This processing facility will work in concert with Tesla’s battery cell gigafactory located 3 hours away in Austin.
It all sounds great, and appears to go a long way towards making Tesla, and by extension, the entire free world, more lithium independent, but the sad fact of the matter — the fact most articles about this facility will conveniently omit — is that most of the raw lithium will still be coming from sources abroad.
Among those foreign suppliers is, without surprise, China.
The reason why China continues to dominate the lithium vertical has less to do with the work they’ve put into building a virtual monopoly, and more on the lackluster approach the West has taken with its own lithium production capacity.
As of this moment, the US controls less than 4% of the world’s lithium reserves, which should be unthinkable given lithium’s importance both as a commercial commodity as well as a strategic metal.
Lithium: Our Biggest Addiction
And yet here we are, buying an absolutely crucial industrial material from our single most powerful political rival.
Now, I’m sure many of you have read stories about the McDermitt Caldera, and how a massive discovery — perhaps the biggest of all time by a factor of 2-3 — was confirmed there earlier this summer.
Once developed, this resource will shift the balance of lithium power so radically, that the United States will overtake China as the world leader in the game of lithium, from mining, likely all the way through battery production.
The problem with this dream scenario is that it takes more than 10 years to bring a new lithium property from discover to production, and with some of the legal battles still facing this specific resource, likely years longer.
That’s ten more years of Beijing growing wealther, and dictating terms geopoltically.
Whatever solution we find to achieve parity with the Chinese has to be much faster, and it has to begin right now. Because despite plunging prices, the longterm prognosis for lithium remains highly bullish.
Too bullish, in fact, to even be sustained by current production rates.
The Lithium Supply Crisis Is Here
As of this year, we’re already failing to meet demand, and the gap will grow ever wider unless there is a disruptive development made in the lithium production sector.
Now, you’re probably not aware of this because few people in the know are talking about it, but that disruptive development may already be here.
This past summer, a small company operating out of Calgary demonstrated a unique technology which allows for the direct and near-instant extraction of purified lithium from fossil fuel brine ponds.
Yes, that’s right, the very same water used to squeeze oil and gas from the Earth’s depths, thus earning the ire of climate activists world wide, can be turned into a wellspring for the greenest of the energy metals.
The filtration process is revolutionary, and can be plugged into virtually any oil and gas operation to start producing salable material within weeks, instead of years.
That makes this company a technology company, not a miner or resource firm of any kind.
They don’t drill and they definitely don’t explore.
They already know where the lithium is, so they need only to plug their facility into the brine pond and switch on the power… Because their product is a technology, it is thus scalable and licensable to any company looking to diversify their fossil fuel business models.
The Best Lithium Pure Play Doesn’t Mine Lithium
The process is fast and best of all, very cheap — allowing for the production of lithium at less than $4,000 per ton.
Even with today’s depressed prices, it’s a win both for the company behind the tech, as well as any potential energy sector clients.
The company is young, small, and trades quietly on two North American exchanges.
By the end of summer 2024 it could be in commercial production on its pilot property in Northwest Alberta.
That alone could turn this microcap lithium tech firm into a quarter billion dollar operation in short order.
The real revenues, the primary business model, and the potentially world-changing potential, however, will lie in the licensing of this technology to companies around the world.
All of that could happen even sooner.
Want to learn more about it?
Fortune favors the bold, Alex Koyfman His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Energy and Capital. To learn more about Alex, click here.
Fortune favors the bold,
His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Energy and Capital. To learn more about Alex, click here.