Toyota's 'Game-Changer' EV Battery Spells Good Things for Lithium Market

LOS ANGELES, November 2, 2017 /PRNewswire/ --

According to news from Toyota Motor Corp., the automaker is scrambling to solve issues in the race to commercialize a battery breakthrough aimed at cutting costs of making electric vehicles (EVs).

The EV market has sent lithium companies soaring as projected demand has gone over the top in the last quarter. Another contributor to better battery technology could only mean good things for lithium battery life.

Lithium companies are focusing on new lithium resources including FMC Corporatoin (NYSE: FMC), Albemarle Corporation (NYSE: ALB), Orocobre Ltd. (OTC: OROCF) and Toyota Motor Corporation (NYSE: TM)

Dubbed the 'new gasoline' for its ability to power EVs and other energy hungry devices, lithium demand is soaring. The rapid rise is raising questions about producers' ability to keep up with the staggering growth.

If there's going to be a significant shortfall by 2020 as predicted, lithium producers and technology innovators are going to have to step up to the plate.

Of the producers, several are seeing their share prices rise based off of demand including Albemarle Corporation (NYSE: ALB), a leader in the space, FMC (NYSE: FMC), the diversified chemical company with significant interests in lithium, as well as Toyota Motor Corporation (NYSE: TM) with recent news of a 'Game Changer' EV battery.

Lithium resources are found in high concentrations in South America, Australia, China, as well as in Canada.

Of these, the Province of Manitoba has just ranked up to second in the world for favorable mining jurisdictions, displacing even Australia, according to the Fraser Institute.

Canadian lithium miner QMC Quantum Minerals (TSX-V: QMC) - (OTC: QMCQF), is on the ground there and has already launched two separate hard rock projects in Manitoba's established lithium areas, placing itself as a surefire up-and-comer in this sector, where demand is showing no signs of slowing down.

BETTER BATTERY TECHNOLOGY: A RISING TIDE 

The idea behind Toyota's new battery is the move towards an all solid-state battery technology.

All solid-state battery technology is a next-generation, high-capacity energy storage device that improves on today's lithium-ion batteries, replacing the liquid or gel-form electrolyte with a solid, conductive material.

The new technology will offer more safety and better capacity.

According to Toyota Chairman Takeshi Uchiyamada, "There are a few next-generation battery technologies we're looking at, and the most promising is an all solid-state battery,"

"We're scrambling to finish developing this technology, but a few issues still remain as we try to mass produce this.", Uchiyamada says.

Automakers realize that no one's going to buy a car with a battery cell that needs to be replaced after just three years.

Apparently battery life is the biggest of the hurdles. Toyota has developed the know how to produce solid-state batteries that hit all of the technology's performance potential, but don't yet have a way to mass produce them to last as intended for a car to drive at least an expected 200,000 kilometers (124,274 miles).

Other automakers have signaled their shift to major EV fleets immediately including GM, BMW, Volvo, Volkswagen and others.

While increased capabilities and a solid-state battery may create a more accessible market for consumers, it is likely to help lithium demands. Car manufacturers are working to strike a balance between the need for more lithium and better, more effective batteries, like Toyota's vision, which may actually require less lithium per battery. This would make solid-state batteries more affordable and therefore, more desirable.

Global revenue from lithium-ion battery sales is anticipated to post a compound annual growth rate of 43.1% in reaching a projected $36.5 billion by 2020, according to Global X research.

STILL IN NEED OF LITHIUM 

Better battery technology and new applications will not however solve an expected shortfall in lithium.

Analysts expect at least one new lithium mine will need to come on line each year through 2025 in order to meet existing demand.

Three regions that are rapidly developing their lithium resources in order to meet the massive demand for new lithium are leading the crusade.

South America leads the pack with about two-thirds of proven reserves of lithium with Australia not far behind. Australia has some of the largest and most successful lithium operations, many which are hard-rock mineral spodumene (a.k.a. lithium aluminum silicate).

A third player in the game, Canada, has re-emerged as a favorable lithium producer. The country is gaining a strong reputation with entries such as Nemaska Lithium's new project in Quebec.

Despite the solid lithium resources in South America and Australia, new battery technology and demand make it apparent that new mining resources will be a necessity to fill the coming demand for lithium worldwide.

LOCATION GIVES QMC QUANTUM MINERALS A LEG UP 

Canadian miner QMC Quantum Minerals (TSX-V: QMC) - (OTC: QMCQF) has been assembling mineral interests since 2010, but made the move into lithium with the acquisition of the Cat Lake Lithium Property (formerly known as the Irgon Mine) in 2016.

Cat Lake is located in Manitoba just 20km from the world class Tanco Mine Property, previously North America's largest and sole producer of spodumene (Li), tantalite (Ta) and pollucite (Cs) rare minerals.

As a mineral region, Manitoba is now ranked 2^nd amongst all global mining districts for its competitive tax regimes, efficient permitting procedures and surrounding environmental regulations / land-claims where miners look to invest.

QMC Quantum Minerals (TSX-V: QMC) - (OTC: QMCQF) must have recognized what a leg up they could have by developing a lithium play in the district.

Between 1953-1954 the Lithium Corporation of Canada Limited drilled 25 holes into the Cat Lake property's Irgon Dike and reported a historical resource estimate of 1.2 million tonnes (metric) grading 1.51% Li20 over a strike length of 365 meters and to a depth of 213 meters.

QMC's geological team believes the historical drill result is accurate.

Based on those results, QMC Quantum Minerals (TSX-V: QMC) - (OTC: QMCQF) is developing a substantial lithium find by today's standards with an excellent grade for production.

The company is the process of putting in a detailed drill program required to update this historical resource to industry's (NI 43-101) standards, making the results current.

BATTERY POWER WILL NEED ALL TAKERS 

Global automakers are racing to lower battery manufacturing costs to help increase the current thin margins on battery cars.

And the successful commercialization of solid-state battery technology could be key to making EV cars affordable. Experts say this means the cost of producing a kilowatt hour of electricity needs to fall to around $100 from a little under $200/kWh today.

Nissan Motor Co. Executive Vice President, Daniele Schillaci explains, "We see this tipping point around 2025." "By then, for the customer, it will be practically the same cost to buy petrol or EV. If you have the same price for EVs and petrol, why would you buy traditional technology?"

With the mandate set by leaders like Toyota, Nissan and Tesla, the demand for lithium seems imminent. It will be up to new companies, like QMC Quantum Minerals, and resources in new regions, such as Canada to answer the call for lithium.

In a future powered by solid-state and lithium-ion batteries, the world is going to need every source we can tap.

POTENTIAL COMPARABLES 

FMC (NYSE: FMC)

FMC Corp. is a Philadelphia-based chemical company which is swiftly ramping up its lithium production. Last year, FMC said it was planning to triple lithium hydroxide production capacity by 2019. The first phase of the plan has already started. FMC management also said that it was not ruling out the possibility to spin-off FMC's lithium segment as a separate publicly owned company. BofAMerrill Lynch recently upgraded FMC stock to "Buy" from "Underperform," increasing the price target to $103.00 from $66.

Albemarle Corporation (NYSE: ALB)

Albemarle Corporation is a global developer, manufacturer and marketer of highly-engineered specialty chemicals. The Company operates through three segments: Lithium and Advanced Materials, Bromine Specialties and Refining Solutions. Lithium and Advanced Materials segment consist of two product categories: Lithium and Performance Catalyst Solutions. The bromine and bromine-based business includes products used in fire safety solutions and other specialty chemicals applications. The Company serves various end markets, including petroleum refining, consumer electronics, energy storage, construction, automotive, lubricants, pharmaceuticals, crop protection, food safety and custom chemistry services. As of December 31, 2016, the Company and its joint ventures operated 31 production and research and development (R&D) facilities, as well as a number of administrative and sales offices, around the world.

Orocobre Ltd. (OTC: OROCF)

Orocobre Limited operates primarily in Argentina in the mining industry. The Company engages in the production ramp up of its Olaroz Lithium Facility and the operation of Borax Argentina S.A. (Borax Argentina). Its segments include Corporate, the Olaroz project, South American Salars and Borax Argentina. Its primary focus is on exploration for and development of lithium, potash and salar mineral deposits. The Company's assets also include boron mines and processing facilities of Borax Argentina and a portfolio of brine exploration projects. Its Olaroz Lithium Facility is located in the Puna region of Jujuy Province in northern Argentina, over 230 kilometers northwest of the capital city of Jujuy.

Toyota Motor Corporation (NYSE: TM)

Toyota Motor Corporation designs, manufactures, assembles, and sells passenger vehicles, minivans and commercial vehicles, and related parts and accessories. The company operates through Automotive, Financial Services, and All Other segments. It offers hybrid cars under the Prius, Voxy/Noah, NX300h, RC300h, Esquire, Alphard, Vellfire, Sienta, RX-HV, Auris, C-HR, and LC names

For a more in-depth look into QMC you can view the in-depth report at USA News Group: http://usanewsgroup.com/2017/10/29/lithium_is_positioned_perfectly-2/

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