Lithium - Story to be watched

US government has kept $2 billion for battery manufacturers. Due to new emmision standards, lithium ion powered vehicles looks imminent. This is a good sign for lithium ion battery manufacturers in US. Battery manufacturing is a very capital-intensive business. The stimulus money will be in the form of 7-8 awards of approximately $100-150M each awarded to US battery companies. (Winning one of those wards must be like winning the lottery for those lucky seven battery companies.)

Current global demand is 16,000 tons per year, or 84,000 tons of lithium carbonate. So the lithium story looks good until its real substitute doesn’t arises. Now let us look at some companies by which we can take the benefit of lithium boom that is expected.

I believe that lithium is the mineral to watch out for but there are very few listed companies which deals in it. The big listed ones SQM and ROC (Rockwood Holdings) have already run up in past few months. However from long term prospective one should enter these stocks as and when you get the opportunity. There are few other Lithium based listed companies (AMerican Lithium Minerals, Canada Lithium Corp, Lithium One Inc, First Lithium Resources) which are worth checking too.