(Kitco News) - Lithium inventories are depleted, and higher prices for the metal should be ahead, said Rob Weir, vice president of corporate development at Lithium Royalty.
On Thursday Weir spoke to Kitco Mining at THE Mining Investment Event of the North in Quebec City.
Lithium prices jumped 10x at the beginning of this decade before crashing. Weir sees signs of a recovery.
"I think a lot of low-grade tons came into the market," said Weir. "We're in a surplus position. With EV penetration continuing to grow, we think we're sort of towards the bottom of that period. Inventories have been depleted, and we think higher prices are coming at us down the road."
High prices earlier this decade and environmental concerns led to investment into alternate forms of lithium production, such as direct lithium extraction. Weir believes that the big oil companies will come out on top due to their expertise in chemical processing and their deep pockets. In November Exxon Mobil announced that it was drilling its first lithium well in Arkansas, the company’s first phase of North American lithium production in the southwest. The company said it aimed to be a leading supplier for electric vehicles by 2030
"There's a lot of companies putting a lot of capital into [lithium technology], including ExxonMobil," said Weir. "It takes a lot of engineering hours to unlock. Every single project is discrete. If anyone's going to figure it out, it's going to be a company the size of Exxon."
Lithium Royalty (TSX: LIRC) has 35 royalties. The company added eight last year. Expected producers in 2024 are Tres Quebradas, Mariana, and Das Neves. The company has a cash balance of $9.3 million, and the current market cap is C$391 million.
Coverage of the THE Mining Investment Event of the North is sponsored by EMX Royalty.
