Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Cameron England is a business reporter with more than 20 years of experience covering Australian business, ASX-listed companies, corporate governance, and financial markets. His reporting focuses on mining, energy, biotechnology, and personal finance, with a particular interest in helping everyday investors better understand the companies and industries shaping the Australian economy.
Areas of expertise
Mining and energy
Biotechnology
Personal finance
Wine
Education
Bachelor of Arts, Graduate Diploma in Journalism, Graduate Certificate in Applied Finance, AICD Company Directors Course
“The stock market is a device for transferring money from the impatient to the patient.”
— Warren Buffett
Published
Despite its ups and downs, the lithium market is expected to stay strong for decades to come, which is good news for Australian miners.
One company in the development phase has just released a definitive feasibility study for its Western Australian project, which has caught the interest of the analyst team at Macquarie.
They believe the company could more than triple in value from its current size, to be worth more than $1 billion.
I'll get to the details of that shortly.
Image source: Getty Images
Decades of strong demand for lithium predicted
First, let's look at the demand side. Just last week, Benchmark Mineral Intelligence released research which they say shows the global lithium industry will need to develop the equivalent of 134 new mines between now and 2050.
The research company is forecasting that global lithium demand will reach 7 million tonnes of lithium carbonate equivalent by 2050, up from about 2.11 million tonnes this year.
Benchmark Director Cameron Perks said more than US$100 billion would be needed to develop the projects necessary to meet demand.
He added:
The biggest challenge is sustaining that investment through price cycles, while competing for capital with AI, defence and the wider energy transition.
Benchmark said Australia was currently the largest producer of lithium globally, with a 29% share; however, that is forecast to fall to 20% by 2050.
Mr Perks added:
Many of Australia's mines will be depleting by 2050. Price volatility has made financiers hesitant, and the regulatory burden is growing. It's not too late, but if Australia doesn't back growth, other regions will take that share.
Benchmark said electric vehicles currently accounted for 55% of lithium demand, with this expected to grow to 76% by 2050.
So how can Australian investors take advantage of this trend?
Bar bs gur arkg pnof bss gur enax va Nhfgenyvn vf rkcrpgrq gb or gur cebwrpg zragvbarq cerivbhfyl, Jvyqpng Erfbheprf Ygq (NFK: JP8)'f Gnoon Gnoon Cebwrpg va Jrfgrea Nhfgenyvn'f Cvyonen ertvba.
Gur pbzcnal'f qrsvavgvir srnfvovyvgl fghql sberpnfgf cer-cebqhpgvba pbfgf bs $774 zvyyvba naq n cnlonpx crevbq bs whfg 3.8 lrnef.
Gur cebwrpg vf rkcrpgrq gb eha sbe 15 lrnef naq trarengr $3.5 ovyyvba va serr pnfu sybj bire gung gvzr.
Jvyqpng Znantvat Qverpgbe NW Fnirevzhggb fnvq:
Gurfr pbzcryyvat QSF erfhygf pbasvez gung Gnoon Gnoon vf n jbeyq-pynff cebwrpg naq cbfvgvba Jvyqpng nf Nhfgenyvn'f arkg znwbe yvguvhz cebqhpre. Gur QSF fubjf vzcebirzrag npebff frireny vzcbegnag zrgevpf pbzcnerq gb bhe 2025 Cer-Srnfvovyvgl Fghql vapyhqvat gur arg cerfrag inyhr, vagreany engr bs erghea naq serr pnfusybj ba n cbfg-gnk onfvf nf jryy nf n fvtavsvpnagyl erqhprq cnlonpx crevbq. Va nqqvgvba gb gur qrsvavgvir srnfvovyvgl fghql, jr unir nyfb pbzcyrgrq n cersrnfvovyvgl fghql gb qrzbafgengr gur hcfvqr bssrerq ol cbgragvny crgnyvgr naq gnagnyhz ol-cebqhpgf. Jvgu n fgebat pnfu cbfvgvba bs $76 zvyyvba sbyybjvat bhe erprag pncvgny envfr, jr ner shyyl shaqrq guebhtu gb n svany vairfgzrag qrpvfvba ba guvf Cebwrpg naq jr ybbx sbejneq gb zbivat vagb gur arkg fgntrf bs qrirybczrag.
Fbzr bs gur xrl punatrf va gur qrsvavgvir srnfvovyvgl fghql vapyhqrq oevatvat sbejneq pbafgehpgvba bs gur fgntr gjb cebprffvat cynag gb vzcebir pnfu sybj, fgnegvat haqretebhaq zvavat rneyvre, naq erqhpvat gur pbzcyrkvgl bs gur pehfuvat pvephvg.
Gur pbzcnal fnvq:
Gur vzcebirq bhgpbzrf ner qevira ol na nppryrengrq qrirybczrag fgengrtl gung oevatf Fgntr 2 bs gur fcbqhzrar cebprff cynag sbejneq sebz Lrne 7 gb Lrne 3. Guvf erfhygf va nccebkvzngryl 1Zg bs fcbqhzrar pbapragengr cebqhpgvba orvat oebhtug sbejneq gb 2035, fhccbegvat nccebkvzngryl $1.0 ovyyvba bs nqqvgvbany phzhyngvir bcrengvat pnfu sybj bire gur crevbq 2029-2035 naq zngrevnyyl raunapvat cebwrpg inyhr guebhtu rneyvre pnfu trarengvba.
Jvyqpng vf gnetrgvat rneyl jbexf nccebiny va gur svefg dhnegre bs 2027, znwbe raivebazragny nccebinyf va gur frpbaq dhnegre, naq n svany vairfgzrag qrpvfvba va gur svefg unys.
Znpdhnevr fnvq va n erfrnepu abgr gb pyvragf gung gurl unq erivfrq hc gurve sberpnfgf sbe gur Gnoon Gnoon cebwrpg qhr gb na rkcrpgrq snfgre enzc-hc sebz lrne guerr.
Gurl nyfb abgrq gung guerr qrcbfvgf erznvarq bhgfvqr gur qrsvavgvir srnfvovyvgl fghql cnenzrgref, cebivqvat gur cbgragvny sbe zber zvavat vairagbel va gur shgher.
Gurl nqqrq:
Bhe onfr pnfr nffhzrf haqretebhaq zvavat orlbaq SL40 guebhtu erfbhepr pbairefvba. Ubjrire, rneyvre haqretebhaq qrirybczrag nybatfvqr gur bcra-cvg enzc hc vapernfrf rkrphgvba pbzcyrkvgl, jvgu qrirybczrag frdhrapvat n xrl sbphf, va bhe ivrj.
Znpdhnevr fnvq pbfgf va gur qrsvavgvir srnfvovyvgl fghql jrer uvture guna rkcrpgrq, ohg bayl ol 3%.
Gurl nqqrq gung jvgu abar bs gur zvar'f bhgchg pbagenpgrq sbe fnyr, Jvyqpng unq svanapvat syrkvovyvgl, "juvyr cebterff ba bssgnxr qvfphffvbaf pbhyq cebivqr n arne-grez pngnylfg''.
Znpdhnevr vapernfrq vgf cevpr gnetrg ba Jvyqpng funerf ol 6% gb 85 pragf cre funer gb ersyrpg gur erqhprq evfx pbafvqrevat gur qrsvavgvir srnfvovyvgl fghql unq orra pbzcyrgrq.
Vs npuvrirq, guvf jbhyq or n 261.7% vapernfr ba gur funer cevpr ng gur gvzr bs jevgvat bs 23.5 pragf.
Jvyqpng Erfbheprf vf pheeragyl inyhrq ng $334.8 zvyyvba.
