This Lithium Asset in Nevada Could Supply Tesla’s Gigafactory

One metal where demand is soaring is lithium which is used in rechargeable batteries for smartphones, Ipads and electric vehicles.  A game changing event occurred this past week when Albemarle (ALB) paid over $6.2 billion to buy the world's largest publicly traded lithium producer Rockwood Holdings (ROC).

This is one of the largest chemical deals and the lithium industries biggest M&A transaction in history.  Demand has doubled in the past decade as lithium ion battery use has grown in mobile technology.  Growth in the lithium sector has been far outpacing other sectors.  Some experts believe demand could even grow faster over the next decade especially as electric vehicles gain market share.

The recent M&A news combined with Tesla's (TSLA) announcement that they will build a "gigafactory" in the southwestern US makes me believe that consumption will soar over the coming decade and domestic lithium assets could rise exponentially in value.  Remember each electric vehicle contains more than forty pounds of lithium.

The key for investors is finding potential sources of the raw material in North America.  Don't forget the Chinese paid over $625 million for Australia's Talison.  I expect further deals to be announced by one of the four major producers such as Talison, Rockwood, SQM and FMC.

One that we've followed for years and believe could be an acquisition target is Western Lithium USA Corp. (WLC:TSX; WLCDF:OTCQX). The company's location in Nevada, with one of the most advanced lithium deposits, is very compelling for battery makers.

In addition, Western Lithium is going to be in production shortly, producing hectorite clays used in the fracking industry for deep directional drilling. It is fully permitted for its Hectatone organoclay business. They have raised over $9M showing the market they have the ability to finance. The Hectatone business is looking good for startup in the fall; plans should be complete in the summer.

The lithium demonstration plant is scheduled for launch in Germany at the end of 2014. Western Lithium has two tracks—the Hectatone business for the oil and gas industry, and lithium for Tesla and other electric vehicle makers. Both tracks are moving forward, and in exciting areas.

The recent uptrend is intact and WLC is returning to support at the trendline and the 50% retracement zone of the September through April rally.

See my recent interview with Western Lithium's CEO below...

Disclosure: I am a shareholder of Western Lithium and the company is a website sponsor. Be aware of any conflict of interests. Please do your own due diligence.  This is not a solicitation to buy or sell stock.  For entertainment purposes only.


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  1. [...] Aug 14, 2014 Get a FREE 30-Day Trial of my Members-Only Premium Stock Analysis Service NOW!Its a very exciting time for the lithium and graphite sector as Tesla announces big plans in the near term.  The announcement of a Tesla Lithium Ion Gigafactory in North America has jumpstarted the junior mining graphite and lithium sector as I discussed in this last article more than a month ago. [...]
  2. [...] Sep 08, 2014 Get a FREE 30-Day Trial of my Members-Only Premium Stock Analysis Service NOW!For years I have been bullish on the growth of the lithium-ion battery in its use in smartphones, tablets, laptops and electric vehicles. It is becoming the battery of choice as the consumer looks to power up on the go. Weeks ago I wrote about a game changing M&A event that could spark a huge rally in the lithium a... [...]
  3. [...] Six weeks earlier, I predicted Tesla would choose Nevada as the state for the major $5 billion battery factory because of the close proximity to Western Lithium’s (WLC.TO or WLCDF) Kings Valley Lithium Deposit. This week Tesla and the State of Nevada made major announcements which should continue to spark interest in Western Lithium’s large lithium resource base. [...]

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