Investors Rush In After Musk Calls Lithium Refining A “License To Print Money”

Mining 05 Depositphotos scanra Investors Rush In After Musk Calls Lithium Refining A "License To Print Money"

Investors appear to have taken to heart Elon Musk’s urging entrepreneurs to enter the lithium refining sector, which he called “a license to print money.” As a result, shares of companies that mine lithium (NYSEARCA:LIT) soared during Thursday’s trading session.

On Tesla’s earnings conference call for the second quarter, Elon Musk stated that the limited availability of lithium, which has contributed to the increase in prices, is not the result of a lack of raw materials but instead of a limited global capacity to deliver ultra-high purity battery-grade hydroxide and carbonate chemicals into battery supply chains.

In his statement, Elon Musk said, “I’d like to once again urge entrepreneurs to enter the lithium refining business. The mining process is rather simple, but the refining is somewhat challenging.”

Ioneer (IONR) revealed a five-year binding agreement to supply Ford Motor (NYSE:F) with 7K tons/year of lithium carbonate from ioneer’s Rhyolite Ridge Lithium-Boron operation in Nevada, which was the leader among lithium gainers on Thursday. Ioneer’s announcement pushed the company’s stock price up by 6.4%.

(NYSE:LAC) posted solid gains of +5.3%, (SQM) posted gains of +3.6%, (PLL) posted gains of +3.5%, (ALB) posted gains of +2.7%, (LTHM) posted gains of +2.3%, and (LITM) posted gains of +2.3%).

In support of its efforts to develop electric vehicles, Ford (F) revealed a comprehensive list of deals for both lithium and nickel connected to the local processing of battery materials in North America. However, only the agreement with ioneer (IONR) was a legally binding contract.

Under the terms of a partnership that is not legally binding, China’s CATL would provide lithium iron phosphate battery packs for the North American Mustang Mach-E models manufactured by Ford (F) in 2020 and for the North American F-150 Lightnings manufactured in 2024.

Ford (F) and Rio Tinto (RIO) have agreed to “explore becoming the foundation customer” for Rio’s Rincon lithium project in Argentina. Ford has signed a memorandum of understanding with Rio Tinto (RIO) for the supply of materials, including lithium, low-carbon aluminum, and copper. This agreement was made after Ford (F) signed a memorandum of understanding with Rio Tinto (RIO).

Compass Minerals (CMP) will also “investigate” the possibility of supplying Ford (F) with a battery-grade lithium product derived from the lithium brine development project being conducted at the solar evaporation facility located in Ogden Utah.

In a separate development, Lithium Americas (LAC) started construction this week on the lithium process testing facility it is building in Reno, Nevada.

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