Lithium Stocks Breaking Out From 2 Year Base on New Tesla Gigafactory

Published (1-6-16)
Big news hit the markets this week as Tesla's (TSLA) Gigafactory was activated outside Reno, Nevada producing batteries and possible cars soon.

For years batteries were dominated by Asia, but now the US is leading the world with possibly 4k new jobs being added this year on top of the close to 3k employees already employed at the Gigafactory.

I expect this catalyst could have a boom on the Lithium ETF (LIT), Tesla (TSLA) and our top notch junior mining equities exploring and developing lithium, cobalt and graphite assets.  Tesla needs to manufacturer a lot of batteries to produce its goal of 500k electric cars by 2018.  This is an ambitious plan as the risk lies in the raw material supply.

The reality is its not just about cars anymore.  Homes can be battery powered now with solar.  This could be huge in the US whose electric grid infrastructure is completely obsolete with increasing blackouts.  Tesla worked at a rapid pace to start this Gigafactory indicating accelerating demand.  I would not be surprised to see Tesla have a breakout year after the start of the Gigafactory along with many of the juniors we follow.

Attention must be paid to Chile which has the highest grade and lowest cost lithium brines.  Pay attention to  near term lithium producers who are trading huge volume and I wouldn't be surprised if they eventually break into new highs.  The infrastructure is great in the Atacama as there are existing evaporation installations, pumps, power, labor and transportation.  I am quite excited to find junior lithium miners that have been able to leap forward and potentially gain land positions with potential near term lithium production located near SQM and Albemarle, two mega lithium producers as neighbors.

I wouldn't be surprised now if these juniors attract some top notch lithium executives to their teams as they now have the desirable exploitation designation which allows them a quick path to development in one of the most desirable lithium districts which produces more than one third of global production.

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