International stock-trading entrepreneur Jim Mellon has predicted a vibrant third lithium wave for global markets, claiming a recent price breather for the silvery-white metal would ultimately prove to be just a temporary hibernation.
Mellon, who in 2018 correctly tipped prices would rally by at least 10 times more than what other professional forecasters were pinning it at, this week doubled down on his assertion to Bulls N’ Bears late last year that lithium was anything but a fad and would soon return as a sharemarket force. The major shareholder in Victorian-based explorer Dart Mining NL remained adamant that the global surge behind lithium was still only in its infancy as the world continues to tool up for production.
He believed alternative types of “dry” batteries that will generally require lithium were still a long way from being injected into the mass market and predicted the lithium market will ultimately show to have grown by seven times for the period between 2021 and 2030.
Mellon was convinced that future lithium demand against how much of it was available globally would soon trigger another price jump.
“My general view is that now is a great time to be loading up on lithium, especially in areas regarded as secure such as Australia and the United States,” the Isle of Man-based English businessman told Bulls N’ Bears.
“Despite the well-known headwinds, including lower than expected uptake of EVs (electric vehicles) in parts of the world and very weak lithium prices – largely due to China – we will enter a lithium deficit position globally by 2025.
“Lithium remains a key strategic metal and the proliferation of Chinese EVs will soon become obvious to us in Australia and the West. They are cheap, stylish and offer extended ranges in some cases.
“Tesla will have difficulties competing and the German and legacy OEMs (original equipment manufacturers) will find it difficult, also. The Koreans and Japanese are offering effective competition.
“The lithium boom is only just beginning and the lower prices for lithium shares in the stock market, in many cases, offer attractive entry points.”
And while the lithium price hit the skids in recent months, there are plenty of analysts willing to suggest that it may have gone close to bottoming out and that more rosy times lay ahead in the not-too-distant future.
That theme was borne out in a recently-published paper put together by global data and business intelligence platform, Statista.
“In 2030, the global demand for lithium is expected to be more than quadruple the demand in 2022, from 720,000 metric tons to a forecast 3.1 million metric tons,” Statista found. “The forecast global lithium supply in 2030 is not expected to meet the demand, whereas in 2022 there was a global lithium market surplus.”
It is interesting to note that while Dart has recently returned to its gold roots to drill-test its historic Rushworth project in Victoria, it remains poised to re-sharpen its focus on lithium if Mellon’s predictions ring true.
But while the world now waits with bated breath for the third lithium wave to emerge, Dart is taking the opportunity to put its shoulder to the wheel and last week kicked off a new drilling program to test parts of the highly-prospective Rushworth goldfield, about 160km north of Melbourne and 65km east of the city of Bendigo, with modern exploration methods for the first time.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Steve Butler
