With the Lithium boom seen lately, Australia has taken a center-stage with Australian miners at a prime position as benefits have been realized owing to the price surge for the light metal. The dynamics can be better understood by looking into the following:
 
The rising demand: Australian players are emerging to be the global players in lithium mines to leverage the solid demand coming from electric vehicles and mobile phones in various geographies including China. There is a favorable economic trend, and demand growth for lithium has resulted in large volumes led by China. Moreover, the significant tightening of the supply side has led to significant increase in the price of the lithium. The lithium market is projected to grow at the compounded rate of 10%-12% annually, through to 2020. Over five million new energy vehicles are forecasted to be built in China by 2020 and the conversion of millions of electric bikes to use lithium ion batteries. Chinese electric car manufacturers are also driving the demand while US electric car manufacturer Tesla got 400,000 orders for its US$36,000 Series 3 vehicle that will be released next year. In addition, in 2015 LG Chem Ltd. has completed the construction of an electric-vehicle battery plant in Nanjing, China, with capacity to supply batteries for 50,000 high-performance electric cars annually. Boston-Power Inc. is expanding its plants’ base in China, and Panasonic Corp., which makes batteries for Tesla cars, has worked out a joint venture. Therefore, the future of lithium looks bright as there is rising demand for the mineral for diverse target segments including, smart phones, tablets, laptops, and other consumer electronics apart from heavy demand for electric vehicles and home batteries for solar panels.

Blooming Australian Players targeting the outstanding demand: Many players have been up beat in the sector these days in order to cater to the rising Lithium demand. One key player from Australia is Pilbara Minerals Ltd, which is developing its core Pilgangoora Project in Pilbara region of Western Australia, and has recently signed an offtake agreement with Chinese firm General Lithium and plans to start mining next year. Pilbara Minerals has also planned to ship its spodumene concentrate - a lithium ore - 120kms to Port Hedland. It is worthy to note that Pilbara Minerals holds the world’s second-biggest deposit of spodumene. The prices of spodumene have jumped to about $480 a metric ton in 2016 from around $380 a ton in 2014. Pilbara stock price has moved up 80% this year to date. Altura Mining Ltd is another company which recently raised over $41.6 million to speed-up their Pilgangoora Lithium Project while the stock price rose 212% in last one year. On a similar note, Neometals Ltd is seeking to commercialize its lithium resources at Mount Marion near Kalgoorlie in the goldfields region of Western Australia. Then, another key lithium player, Galaxy Resources Limited has acquired 90.31% in General Mining and created a market capitalization company of almost $800 million. Stock price for the company has skyrocketed 433% in last one year. Even fund managers are now focusing on the sector. For instance, UBS has investments in Galaxy along with two other lithium miners, Orocobre and Pilbara, across its Small Cap, SIV and Microcap funds. The investors are focusing on the value of new lithium developers that choose low-cost operations close to a port as they did with iron ore. Moreover, the US and Chinese-owned Greenbushes lithium mine in south Western Australia is now the world's biggest lithium mine. Big players like Rio Tinto Limited have also entered into the sector. Rio’s Jadar Lithium-Borate project in Serbia is a strategically important project for its mineral business.

Overall, there seems to be a lot of value that can be unearthed as Lithium batteries have an edge of offering a weight/storage solution, at least for urban driving. Lithium batteries also offer a solution to the problem of intermittent power generation by renewable sources like solar and wind. Recently, there has been a speculation about supply outpacing the demand but the same have been put to rest at the moment given the rising Lithium need emanating from different parts of the globe. Even with some volatility, Australian Lithium miners are enjoying the current foothold.

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