Dear Reader,
Earlier this week, Saudi Aramco, the world’s biggest energy company with a $2 trillion market capitalization, announced that it was looking to get into the direct lithium extraction game to fuel the global push for carbon-neutrality.
Direct lithium extraction, or DLE, for those of you not in the know, is a process for harvesting lithium carbonate from oilfield brine.
Unlike traditional lithium production, this process requires no exploration, drilling, testing or establishment of major infrastructure. Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
Instead, brine solution is fed into a compact production plant, salable lithium is extracted, and the solution is returned to the pond for further use.
For a company like Saudi Aramco, which operates galaxies of brine ponds on their oil and gas producing assets, not diversifying into DLE is simply foolish…
Provided, of course, that the price of production is right.
Lately, cost has been much more important of a factor than as recently as 2023.
Today’s Lithium Market Isn’t What It Used To Be
Over the last year or so, the going rate for lithium has collapsed from almost $80,000 per ton to today’s prices ranging in the low $20,000s.
Some of the financial analysts out there swear this is because the EV market failed to deliver on expectations. But with EV sales breaking records every month and wireless devices flying off the shelves at an ever-increasing rate, it’s not the lithium demand that’s failing… It’s overspeculation that inflated a good, old-fashion bubble.
As always, that bubble didn’t last. The weak hands fled, the price tanked.
Nevertheless, lithium remains the most important industrial element in the world today, and will very likely remain on top for at least the next decade or so, even as traditional lithium-ion batteries are gradually replaced by lithium-cathode, solid state electrolyte technology.
Which is why companies like Saudi Aramco are looking into DLE as a way to evolve with the market.
Weak-Handed Investors Step Aside
Now, Saudi Aramvo may be the biggest story in DLE in terms of its size, but if you want significance in terms of technological innovation, there’s a company operating much closer to home that’s potentially ahead of everything else out there.
Operating out of Canada and testing their revolutionary DLE filtration in Northwest Alberta, this company, a small firm started by veterans of the petrochemical industry, can produce economically viable lithium carbonate from solutions up to ten times more dilute than what is found on most oil and gas properties.
Within this new field, that itself stands out as a game-changing achievement, and has secondary effects that are even more profound.
In a recent press release, this company announced that it had successfully dropped the cost of production by almost ⅔, making even today’s post-bubble lithium prices a non-issue in terms of economics.
It’s quite literally the cheapest and fastest way to go from nothing to production for an energy company operating produced water collection ponds on their property — and that’s almost any energy company based in North America, where hydraulic fracturing has been the standard for decades.
Lithium Is Coming Back
Want to know the future of lithium? Just look around you. Our world runs on it. Your phone, tablet, laptop… Maybe even the car you’re driving and very likely a car you’ll get in the future — all of it gets its power from the lithium-cathode battery.
Regardless of what form tomorrow’s rechargeable batteries take, lithium will remain relevant for years to come.
With the bubble behind us, the rational, organic growth stage can begin, and the smart investors won’t wait for the crowd to start piling in.
It’s not for everybody, but for a select few speculative-minded individuals, this is a perfect exposure to the second stage of the lithium boom.
It’s barely a blip on the radar in terms of market capitalization, but it’s already running a pilot plant, and the implications to American and Canadian energy companies are clear.
There’s really too much to say about this firm and the process they’ve perfectef in such a short article, so I invite you to get the full story, right here. 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.
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