May 12, 2023
The country with the world’s largest lithium reserves, Chile, sent shockwaves through the market last month as the nation’s president declared the nationalization of its lithium industry.
Argentina and Bolivia could soon follow suit.
And while that’s bad news for North American miners who are there now or were planning to be — it’s great news for the ones that have maintained their focus on far safer mining jurisdictions such as the US, Canada, and Australia.
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You see, Chile, Argentina, and Bolivia make up the Lithium Triangle, which holds about 67% of the world’s proven lithium reserves.
Hence, removing a very, very large chunk of the world’s lithium reserves from North American miners instantaneously makes lithium projects nestled in politically safe jurisdictions that much more desirable and, potentially, that much more valuable to boot.
Chile’s government said it will not terminate current lithium mining contracts, which must have North Carolina-based Albemarle Corp. (NYSE: ALB) breathing a massive sigh of relief since its contracts there are not set to expire until 2043.
Yet, the move will undoubtedly spur a major shift in future lithium investment away from South America to places like Australia (the world’s biggest producer at nearly half of global production), the United States, and Canada.
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In a world where jurisdictional and political risk is sharply on the rise, North American mining firms are becoming increasingly focused on projects that are located in politically stable countries as no company wants their deposit taken away by a rogue government.
A big focus shift is set to occur in the United States, which boasts the world’s fourth-largest lithium reserves — measured at 6.8 million tonnes according to the USGS — yet, surprisingly, only has one active lithium mine.
That mine is Albemarle’s Silver Peak lithium brine operation in Clayton Valley, Nevada, which has been in continuous production since the 1960s.
Several North American miners have active lithium exploration projects in the area surrounding Silver Peak. And there are numerous hard rock pegmatite lithium exploration hotspots on US soil that may soon add to the supply chain as lithium demand increases in the coming years and decades.
Canada has the world’s sixth-largest lithium reserves and has been stealing the headlines of late with news of a major lithium pegmatite discovery in the James Bay region of Quebec by a junior mining firm.
Our team was in on that deal very early on, which, suffice to say, has turned out to be the score of a lifetime for many.
We currently have our eyes on a number of other juniors that may be NEXT to join the North American lithium discovery party.
With the EV boom continuing to drive demand for lithium, aka, the “white petroleum,” it’s a report you simply do not want to miss.
Check it out here.
Editor, Daily Profit Cycle