The following is a guest post by Mobile Guru for ZenTrader.
What is Lithium?
Lithium, discovered in 1817, (Greek for “stone” – symbol “Li” – atomic number ‘3’) is a soft, light silver-white metal which in its pure state is reactive, flammable and easily corrodes when exposed to moist air. In its natural state it is found in compounds, generally bound up in aluminum and silica. It must be handled carefully to avoid skin contact or breathing it in, which can cause irritation to the nose, throat, and lungs.
Source data shows that lithium, the lightest and least dense of the solid elements, has the highest specific heat of any solid element (melting at c. 357 degrees F.). It is so light it can float on water and soft enough to be cut with a knife.
The going rate for lithium in commercial use is currently around $6,500/ton, versus less than 1/3 of that amount a decade ago. A fact to consider is that the “price” is not determined through “discovery” of buyers and sellers in an open market, but rather by way of user – supplier negotiation. Bruno del Ama, CEO of Global X Management and portfolio manager of the lithium ETF remarks:
“The price of lithium is an industrial clearing price, which is established between the industrial users and producers. It is very much a bilateral market.”
Where is it Found?
Lithium is “mined” primarily from brine lakes, clays, salt pans, and from less commonly, from Spodumene, asilicate of Lithium and Aluminum. It is also found in many igneous rocks and mineral springs. Lithium is measured as a portion of the earth’s crust in parts per million – believed to be c. 17 ppm. While there are some occurrences in the U.S., Australia, Russia and China, the majority of global lithium minerals deposits are found in one region of South America – in the Andes Mountains of Chile Argentina and Bolivia. In fact, more than one-third of the world’s known lithium reserves are believed to be found in Bolivia alone.
Chemical & Mining Co. of Chile (Sociedad Quimica y Minera de Chile) is the world’s largest lithium producer. It trades as an ADR (SQM) on the NYSE.
How Much is Available?
The USGS estimates that there is a “Global Lithium Reserve Base” of about 11…
