Chinese Electric Vehicle Makers Need Lithium So Badly They're Willing to Buy it in the Ground

LOS ANGELES, November 13, 2017 /PRNewswire/ --

USA News Group - It seems that the increase in demand for lithium has Chinese manufacturers of electric vehicles (EVs) digging deep to secure the future supply of the metal. Apparently they are so concerned about producers' abilities to fill downline supply that Chinese EV companies are now willing to buy lithium that's yet to be mined.

Companies that could be in line to produce or simply sell the in-ground resources include QMC Quantum Minerals Corp. (TSX-V: QMC) (OTC: QMCQF), Galaxy Resources (OTC: GALXF), Sociedad Quimica y Minera de Chile (NYSE: SQM), Lithium X Energy Corp. (TSX-V:LIX) (OTC: LIXXF).

This new move by Chinese automakers is understandable, since all major automakers, including several major Chinese manufacturers, are planning to increase their electric vehicle (EV) quotas dramatically. That fact, combined with greater use of lithium in power grid storage, is creating a serious projected lithium supply deficit that could hit as early as 2020.

Companies with lithium production are expanding their production, while a forward looking group of junior companies are working feverishly to bring on new lithium sources.

A new lithium player that could be a winner as a result of the Chinese approach is QMC Quantum Minerals Corp. (TSX-V: QMC) (OTC: QMCQF), which is looking to open up lithium reserves in Canada's hard-rock lithium category. The company is developing a large historical resource in Manitoba -a region with very favorable mining logistics.

Larger companies that are working to expand their lithium reserves may use selling in-ground assets as a way to bolster development. These include Galaxy Resources (OTC: GALXF), Sociedad Quimica y Minera de Chile (NYSE: SQM), and Lithium X Energy Corp. (TSX-V: LIX.V) (OTCQX: LIXXF), all of which are in major expansion of their respective lithium resources.

CHINA'S MASSIVE HUNGER FOR LITHIUM 

China is poised to become a monster consumer of lithium. And while the country holds its own significant reserves of the word's lithium resources estimated at about 7 million tons, they realize that they will need much more supply to handle all of their future needs.

China's concerns for securing future lithium reserves is highlighted in a recent agreement by Australian lithium company Pilbara Minerals.

In September, Pilbara announced its agreement with China's Great Wall Motors Company to back Pilbara's Pilgangoora Stage 2 expansion. The agreement is a true landmark for producing one of the very first off-take funding and equity investment agreements by a Chinese EV Manufacturer for lithium.