SHARES in lithium have soared, with Galaxy Resources up 24pc, Orocobre Ltd up 34pc and Pilbara Minerals posting a rise of 19pc. Mineral Resources also increased 2.4pc to $17.39.
The boost for the lithium market comes as the Chinese government announced yesterday that it would hold back on reducing subsidies to the electric vehicle industry.
Industry and Information technology Minister Miao Wei said that the subsidies, which have been cut steadily since 2018, will not be cut this July.
This follows a marked drop in sales of electric vehicles since the subsidies, first introduced in 2009, began to be phased out.
The surge is also hitched to Tesla’s delivery of its first Chinese made Model 3 cars.
Tesla has revealed that limited production will begin on its highly anticipated Semi all-electric truck mid-2020, with its four electric motors and the ability to reach 100km in around 20 seconds.
The major Australian lithium producers are on their way to becoming world leaders in this space.
Mineral Resources has an upgrade underway, which will increase production to 450,000t of spodumene concentrate annually.
Pilbara Resources is also expanding its processing capacity to 7.5mt a year, while Orocobre has a planned expansion of its lithium carbonate production.
Galaxy Resources has maintained a steady operation at Mt Cattlin and is well positioned to ramp up production if the demand arises.
It also has a strong cash position.
Other lithium miners have not fared so well. Altura Mining is currently in a trading halt, seeking refinancing of $160m and an announcement is expected Thursday morning regarding the results of its refinancing.
Though the market is currently reported to be in oversupply, forecasts are that demand will soon outstrip supply, according to the Australian Government Office of Chief Economist’s December report.
