Australia's lithium miners received a boost this weekend after Bloomberg reported that the Chinese government is working with regulators on a timetable to end the production and sale of fossil-fuel-powered vehicles.
China becomes the third nation this year to announce such plans, following in the footsteps of the British and French governments.
Whilst the Chinese government has not given a date as yet, the UK and France plan to ban the sale of internal combustion engine vehicles by 2030. I suspect China won't be too far behind the UK and France, with a ban likely to fall somewhere between 2030 and 2040.
When the date is confirmed I believe it will accelerate the adoption of electric vehicles globally, which I expect will lead to demand for lithium carbonate rising strongly.
This is great news for the likes of Galaxy Resources Limited (ASX: GXY), Orocobre Limited (ASX: ORE), Kidman Resources Ltd (ASX: KDR), and Avz Minerals Ltd (ASX: AVZ).
All four of these lithium miners have high-quality assets with a significant resource underground.
Should lithium prices remain high, or even go higher, then I believe all these miners are in a great position to generate high levels of free cash flow in the future.
My pick of the group remains Galaxy. I have been very impressed with the progress it is making at its Mt Cattlin site and believe its other assets are equally as promising.
Despite its strong gain in the last month, I still feel the Galaxy Resources share price has significant upside in the long-term thanks to the rise of electric vehicles and renewable energy.
This could make it a great buy and hold investment option for investors with a high tolerance for risk.
