Jan 17, 2024: The Oregon Group, an investment research firm, has released a report anticipating a substantial and sustained increase in lithium demand over the next 20 years, primarily fueled by the electric vehicle (EV) and battery sectors. This projection comes against the backdrop of price corrections in the lithium market throughout 2023, leading to a slowdown in new lithium project developments and supply expansions.
The report underscores that the predominant demand for lithium originates from its utilization in electric batteries and vehicles, constituting the largest and fastest-growing sector for the mineral. This scenario is considered unusual, even in bullish markets. The growth in demand faces challenges such as price volatility, further intensified by geopolitical tensions, environmental concerns from local communities, and government permitting issues.
Despite these challenges, established lithium producers like Albemarle (NYSE:ALB) and Pilbara Minerals (ASX: PLS), along with funds like Horizons Global Lithium Producers Index ETF (TSE:HLIT), are expected to benefit from a higher-priced market. Additionally, emerging players in Africa, such as Premier African Minerals (AIM:PREM) and Li3 Lithium Corp (TSX.V:LiLi), are well-positioned to capitalize on this growth.
The report also references a 2015 prediction by Goldman Sachs, which has materialized, with lithium becoming the “new gasoline” for 15.5% of new cars sold globally in the first half of 2023. This is attributed to lithium’s superior energy density, lighter weight, longer charge retention, and absence of charge memory. Despite ongoing research into next-generation battery technologies, lithium-ion remains the dominant technology and is expected to maintain its dominance for many years.
The Oregon Group, founded by Anthony Milewski and Justin Cochrane, specializes in investment trends related to commodities and energy transition. The newly released report, titled “Inside the Accelerating Global Race for Lithium,” aims to provide insights into key trends and players in the lithium market.