Monday, August 02, 2010

Oil is above 80, USD is down: it is time for Lithium to shine again TNR.v, LIT.v, TSLA, CZX.v, RM.v, LI.v, WLC.v, LMR.v, LAT.v, CLQ.v, SQM, FMC, HEV,

There is always a bull market somewhere. Fasten your seatbelts - we are due for a ride in Lithium Junior miners now. With Oil crossing 80 USD/b and USD going down we have a very good launching point for the second Leg Up in this generational Bull. QE is well under way and some investment banks are pointing out to 10th of August as a starting point for FED new round of QE operations. Economy is not growing, jobs are not coming back and elections are too close to play with the markets now. European Austerity will stay a strange word on this side of the pond, it must be of French origin and can not be trusted. QE and maybe even TAX breaks extension are in the cards and Oil sense it with the Pound: UK seems to be decoupling from the FED with the rest of the developing world. Stagflation is ruling the developed world now and hidden from official statistics inflation is sipping into the financial system. Oil shock could be devastating in these circumstances: fragile recovery will not be able to manage Oil prices above 100 USD/b down the road. Electrification of transportation is not a Tree Huggers' dream any more, but Nation Wide Security Problem. It should be addressed in the same fashion as any military exercise addressing national security problem with clear long term plans and allocated resources. Do we still have time? Nobody knows for sure, but time to act is now. Japanese, Korean and Now Chinese companies are aggressively position themselves in the Lithium Supply chain for the new economy based on Electrification of Transportation. Where are all the Cornings, Dows, Du Ponts and Google's VC backers in this strategic supply investment opportunity? Asia is leading the way in battery making now and they will hold the deck on the supply side for REE and Lithium as it is happening now. With today's news that FMC is looking to expend its resource base (will it be another acquisition in lithium brine sector after Talison and Salares Lithium?) we have "Lithium Majors" wakening up and the summer heat will be boiling new deals in this explosive Micro Cap sector.

"We have another hint into the recent M&A activity in Lithium space. Talison deal with Salares Lithium confirms real Chinese appetite for Lithium. Now it is time for Lithium Supply - China already controls 97% of Rare Earths market. Lithium output will be increased fivefold in Chinese Lithium province, but the real news is below from Reuters - it is only half of previously expected output and now Chinese companies are on the shopping spree among lithium developers. Who will be at the boardroom table next - only a few lithium brines plays are left without J/V partners and we are following here two of them: International Lithium and Rodinia Lithium. We expect M&A activity in lithium space to be continued during this summer months."
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