For the past three quarters in 2024, lithium industry growth has been hindered as oversupply continues to depress prices. However, after electric vehicle sales exceeded expectations in September, analysts at Sprott Insights issued an early warning that a potential shortage of lithium will occur as early as 2025, with demand (particularly from China) set to grow by 20 per cent per annum.
Sprott’s analyst Jacob White pointed to future demand trends as a catalyst for investment in the lithium market, with the lithium battery industry expected to create a $400bn annual revenue opportunity globally. With profit margins as high as 65 per cent, the lithium production segment of the industry chain has the potential to become a highly profitable sector. In his report, he believes lithium miners could be in a favourable position as they can leverage the rebound in lithium prices.
On Toronto Stock Exchange Venture Market, the price of one lithium explorer’s stock has surged 408 per cent since the start of the year, sparking investor concern.
Q2 Metals (TSXV:QTWO) is exploring its flagship Mia lithium property in the James Bay region of Eeyou Istchee, Quebec, Canada, where the entire mineralised trend zone stretches over 10 kilometres. In addition to this, the company’s portfolio includes the Stellar lithium property, which consists of 77 claims and is located 6 kilometres north of the Mia property.
On 29 February, Q2 Metals announced that it had entered into three separate option agreements to acquire a 100% interest in the Cisco lithium project, which drove its share price soaring. On 4 March, the company’s share price reached a yearly high of C$0.54. Q2 Metals completed its acquisition of Cisco in June.
With 100% ownership of the project, Q2 Metals re-analysed the drill results from Cisco and achieved better data than the original results. This prompted the company to announce the start of a summer drilling program at Cisco, including the confirmation of eight new mineralised zones. On October 10, shortly after the release of the Cisco drill results and core assays, the company’s share price soared to a yearly high of C$1.48.
Neil McCallum, vice-president of exploration at Q2 Metals, said the summer drilling program drilled down 17 holes totalling 6,360 metres. Each hole intersected pegmatites with clear signs of spodumene mineralisation, a major lithium-bearing mineral. Assaying of the drill hole results validates the potential and size of the Cisco project area as a larger mineralised system with higher grades.
Q2 Metals currently has a market capitalisation of C$174.5 million, with a recent closing price of C$1.19 as of 28 October.
According to foreign media reports, as of October 2024, in addition to Tesla which used lithium iron phosphate batteries for loading vehicles, Daimler, Ford, GM, Rivian and many other overseas mainstream car companies have also announced that they will use lithium iron phosphate batteries.
LG, SK On, Samsung SDI, and other traditional mainstream battery companies, as well as KORE Power, Morrow Batteries, and other emerging battery companies also Plan to turn to lithium iron phosphate battery.
Overseas markets have long been dominated by ternary material batteries, but lithium iron phosphate batteries have low cost and high safety advantages, driven by the demand for cost reduction in electric vehicles, lithium iron phosphate batteries are expected to gradually open the overseas market. From the corporate planning point of view, lithium iron phosphate batteries are expected to usher in a rapid increase in the proportion of overseas installed volume in 2026 at the earliest.
According to industry experts, by 2030, global power battery demand will exceed 3500GWh, energy storage battery demand will reach 1200GWh. In the field of power battery, lithium iron phosphate is expected to occupy 45% of the market share, the demand will be more than 1500GWh.
Taking into account that it has occupied 85% of the market share in the field of energy storage, the future demand for lithium iron phosphate battery will only continue to grow.
If you are interested in lithium iron phosphate battery, please pay close attention to First Phosphate (CSE: PHOS) (FSE: KD0). This is the only publicly listed company that is fully dedicated to extracting and purifying phosphate for the production of cathode active material for the Lithium Iron Phosphate (“LFP”) battery industry. LFP batteries operate similarly to other lithium-ion batteries. They have the advantage of being non-toxic, having superior fire safety, longer cycle life and lower cost. The company is the Building Block for a North American LFP Battery Ecosystem, the company holds a total of 1,500+ sq. km of royalty-free land claims in the Saguenay-Lac-St-Jean Region of Quebec, Canada consisting of rare anorthosite igneous phosphate rock that generally yields high purity phosphate material devoid high concentrations of harmful elements.
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