Uranium, Lithium, and Rare Earth Metals
Investing for the Future
by Cris Sheridan
June 23, 2010
When President Obama declared that the construction of the first nuclear power plant in almost three decades was “only the beginning”, I hope you took notice. Normally, we could just dismiss such a statement as cheap political talk, however, in this case it turns out to be backed up by $8 billion in government funding. And according to Obama’s budget proposal, this really is just the beginning. When taking into consideration the Bush administration’s previous amount, President Obama doesn’t just plan on doubling-down, but tripling the amount originally slated by his Republican predecessor. Keep in mind that the main opposition toward building nuclear power plants over the past 30 years politically has largely been on the left. However, now that an indisputably left-leaning president reigns in office, who also just so happens to be a strong supporter of nuclear power, there is a tiny possibility that something might actually now get done. But, then again, let’s not confuse causation. I wouldn’t want you to think that just because the leading figure of the Democratic Party (and of the US government, of course) reveals a change in stance that this will cause a nuclear renaissance in America—no. Rather, what we see is that a culmination of factors have allowed for a resurgence in the popularity and necessity of nuclear power in meeting long-term goals. What are these factors you might ask? Well, the first is an international drive to reduce carbon emissions. Since nuclear energy is the most efficient zero carbon-emitting power source that can provide a constant supply of energy (unlike wind and solar), the economics of it make more sense. A second major factor has been the successful implementation of large-scale nuclear power by other leading nations.Thirdly, the steady increase in the cost of crude oil via growing international demand, especially within emerging markets, continually makes nuclear power a less-pricey alternative. And, lastly, rebuilding America’s nuclear energy infrastructure is an investment towards badly needed jobs and energy independence. However, with all that, if you’re still not convinced, don’t just listen to me…listen to what Bill Gates has to say. (Watch his pitch for nuclear power at the 2010 TED conference here).
So nuclear energy provides the electricity we need but what, of course, stores that electricity? The answer to that is lithium. Whether it be your cell phone, your laptop, your iPod, the rechargeable drill you used over the weekend, the batteries in your watch, or, perhaps, even the Nissan Leaf you may buy later this year, lithium has become ubiquitous in our modern-day world. Even if we dismiss Obama’s ambitious goal of having 1 million hybrids or all-electric vehicles on the road by 2015 as being overly optimistic, some promising developments have been taking place within the car industry. Take, for example, the recent announcement in May of Toyota’s joint partnership with all-electric car maker Tesla Motors, including a purchase of $50 million of their common stock. Or, there’s the release of the first affordable all-electric family sedan by Nissan, which set to be available in December 2010, already sold-out all of its pre-orders within less than two months. If the Nissan Leaf proves to be popular and profitable it will play a huge part in how many electric vehicles (EVs) come on the market within the next few years. Furthermore, if studies on demand for EVs are true and costs are low enough, the demand for lithium should continue to grow at an even faster pace. What’s even more encouraging is a newly released study in which MIT research scientists were able to create lithium batteries that deliver 10 times the amount of energy over a conventional lithium battery of the same weight. If a commercial application is ever developed, you might just be able to say good-bye to gas powered vehicles all together.
Every time you see a Prius driving past you just think, “there goes 25 lbs of rare earth”. For encased in every hybrid and future electric vehicle is a section of elements found at the bottom of the periodic table critical for weaning ourselves off fossil fuels. However, since China currently has an outright monopoly on most supplies of rare earth metals or REMs, which are critical to the production of various hi-tech, defense, automotive, and alternative clean technologies (like wind and solar), their possession has become all the more important and valuable. As I’ve mentioned in a previous article, “Smart Money Taking Stake in Rare Earth Metals”, this coveted class of metals are also being sought after by the Department of Defense’s Advanced Research Project Agency, a.k.a. DARPA, for the development of high strength alloys, lasers, and things you’d probably read in a science-fiction book. Of course, the historical use of REMs is much longer than most of us probably realize, it’s just now that everyone is finally aware of how much value they really pose for the functioning of a modern society.
Copyright © 2010 Cris Sheridan
Cris Sheridan | California, USA | Email