keywords :
In November 2017, on a long journey to the Olaroz-Cauchari Basin in Northwestern Argentina, I had the opportunity to spend time with Richard Seville, CEO and Managing Director of Australian-based Orocobre (OTCPK:OROCF). Orocobre is best known as the only lithium brine explorer to bring meaningful new capacity to the market through a Greenfield operation in over 20 years. During our discussion we covered many topics, but the key take-away points were around the challenges and obstacles to bringing a new lithium brine facility to market. It was also good to get Seville’s insight into what has changed in the market - the latter is relevant to junior miners and investors alike who are trying to develop or bring to market lithium projects.
My investment thesis remains unchanged: invest in late-stage exploration and early-stage production companies along with companies that offer some form of strategic value, such as a well-positioned land package or end-user relationship. Consumer uptake rates for new technologies such as electric vehicles and energy storage systems have taken flight, lithium prices are firming up well above $10,000 T LCE, and new lithium supply is required. However, existing producers such as Albemarle, SQM, and Orocobre have announced their plans to increase production, while new Chinese investment into Greenfield projects across the Americans and Australia, will ensure that fresh capacity enters the market. It is my opinion that the window of opportunity for early-stage lithium explorers has closed, which is why I urge investors to focus on companies that meet the criteria noted above.