Sunday, September 13, 2009

Why Warren Buffett is investing in lithium TNR.v, CZX.v, SQM, FMC, ROC, BYDDY, WLC.v, CLQ.v,, RES.v, LI.v, RM.v, ABN.v, HAO.v, F, DAI, TTM, TM

We have covered this report already from Junior mining opportunities perspective, but CommodityOnline puts a new twist on this market and "Oracle from Omaha" embracing it.

For those new to the sector we have put together:

TER: There are concerns that China is cornering the "technology" metals sector and the implication is that China could dominate mining of these metals. Is this also a concern with lithium?

MM: Over 80% of lithium-ion batteries are manufactured in Asia. So, to me, yes, the issue of China cornering the "technology" metals sector is a significant concern. China, and for that matter, many strongly capitalist countries, are subsidizing and supporting 21st century growth industries. In 2008 Warren Buffet invested $230m for a 10% stake in BYD, which makes hybrid cars in China. He has now made roughly $1 billion on that investment. BYD recently announced they intend to start shipping their cars to the U.S. beginning in 2010. At the beginning of the year BYD had over 10,000 Chinese engineers "from the best schools" (Forbes interview April 2009); they have another 7,000 in training for positions. They provide them shelter and dinning (helps to keep them at work), and the average wage is $190 a month ($150 in Taiwan). The company's founder Chairman Wang Chuanfu readily admits "there is no way we could do this in the U.S." Clearly the Asians are exploiting a cost structure differential, which is a tremendous disadvantage for North American industry."

Junior miners in Lithium and REE:
"... TNR Gold Corp. (TSX.V:TNR), a project generation company that has been around for a long time. Fortuitously they have 15 projects in Argentina, some with senior and mid-cap JV partners including Barrick Gold and Xstrata, and the Argentine experience gave them an early stage leg-up on acquiring one of the low cost brine-based salares (salt lake) in the Salta region close to a Orocobre (ORE:ASX) Li project currently undergoing a Bankable Feasibility Study as it advances towards production expected in 2012. TNR intends to spin out its Li and Rare Earths division in Q1 2010 and also has attractive copper and gold projects. As the pieces of TNR are developed and/or carved out, I expect investors to be well rewarded and as the projects are explored, and ideally, developed."

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