JR Crooks is fairly new in his role as editor at Global Resource Hunter, but the two teaser pitches he has sent out in the last few months have certainly caught the attention of our readers — the first one was for the silly “Pyramus Compound” and his special “black goo” replacement oil that the world was going to go nuts for, and this one is also in the fuel space — though this time it’s “Salt Fuel” that he’s talking about.
Which, as you probably already guessed (but he doesn’t let on until near the end of the ad) is lithium. Which is a salt in some forms, and which is largely produced from naturally occurring brines. And it’s been just about the most exciting thing in resource investing for a couple years both because almost all other commodities and mined materials have been weak (though that’s been changing a bit this year, with at least a little bit of a recovery in copper, gold, oil and a few other commodities).
The lithium excitement in recent years has been driven almost exclusively by Tesla’s headline-generating “Gigafactory,” because that massive battery factory’s demand for lithium for lithium-ion battery production (as well as other, less notable production expansion at other factories) is expected to spur higher prices.
And JR Crooks has three favorite “Salt Fuel” stocks he likes, and drops a few hints as to which ones they are… so we can do a little research, toss ’em into the Thinkolator, name the stocks for you and, hopefully, give you a chance to think for yourself without the psychological pressure of the hard sell… or the reality-distorting field that’s created when you pay for information that is marketed to you so aggressively that it gets your heart racing.
So what are the stocks? First, let me share a little excerpt from the ad to give you a taste of what JR Crooks is selling:
“Energy war led by Elon Musk and Warren Buffett drives historic demand for Salt Fuel
- Set to replace oil as the universal fuel … Musk and Buffett are locked in a silent battle to stockpile 40,000 tons of the world’s Salt Fuel reserves.
- The department of defense is looking to secure tons of Salt Fuel
- China could potentially need 100,000 tons of mineral salt
- One little company is caught in the crosshairs of this billion-dollar battle with a potential production surge of 500%”
And he even includes my favorite Bloomberg Businessweek cover, from last month, that has Elon Musk and Warren Buffett grappling in the ring as they battle for leadership in solar power. Which is really not a lithium story, though as home energy storage becomes more widespread the solar story and the lithium story might merge someday — that’s really more a story about the fight between utilities and distributed solar about who pays for distribution and the electric grid.
(OK, yes, Berkshire Hathaway does own a stake in BYD, which is a Chinese battery maker that turned itself into an electric car and bus company… but that’s far from being a core business at Berkshire or a major focus of Buffett’s attention, it’s smaller than Berkshire’s subsidiary Duracell and doesn’t even merit a mention in the annual report).
And then there’s a spiel about how powerful this “Salt Fuel” really is…
“It’s nearly impossible to understand how a new fuel could catapult to such prominence in just the last 10 years alone …
“And why visionaries like Elon Musk and a conservative investor like Warren Buffett (who still uses a tube T.V. in his office) are caught in a dead-lock battle over Salt Fuel.
“How unusual and unique is this fuel…? And why are Musk, Buffett and everyone else is caught in a gridlock for it?
“Salt Fuel, which is ‘Found in salty water, or brines, is the most cost-effective on the market. It is cheap and easy to extract. Will be a global game-changer,’ according to Economy Watch.
“‘Deposits are accumulations of saline groundwater that are enriched,’ according to the USGS.
“And energy expert and Geochemist Dr. Andy Robinson says … ‘All you have to do is drill a few wells and pump the liquid brine.’
With such unique characteristics … how does Salt Fuel fare against all the energy types?
- Unlike fossil fuel or coal … Salt Fuel is clean and environmentally friendly.
- Unlike uranium … it’s safe and can’t create a radiation hazard to mankind.
- Unlike wind and solar energy which needs ugly infrastructure like panels and wind mills … Salt Fuel is barely noticeable, and can be stored and reused on demand.
- Unlike geothermal energy … Salt Fuel can, and is already powering cars and buses and even airplanes.
I should probably point out that “salt fuel” isn’t really a fuel, of course, in this iteration it’s a battery component — it’s used for energy storage, not energy generation. The energy still has to be generated to charge the battery, whether it’s from solar power or coal combustion or whatever else… it’s been hard to compete with a tank of gasoline as an efficient “stored energy” solution for automobiles, but the hope is that storage will continue to get better, with more advanced batteries, and enable much more efficient use of solar or wind energy as gasoline replacements.
And yes, there are lots of other ingredients that go into making these lithium ion batteries — manganese, cobalt, graphite, the mix depends a bit on the variety of battery — but lithium is not nearly as common in the earth’s crust as most of them, is expensive and difficult to mine from rock, and is not produced as a byproduct of mining copper or nickel. Almost all of the world’s supply is indeed created from salty brines that are pumped out of the earth and processed.
And Crooks says the price is already shooting up…
“In 2014, the spot price for a ton of Salt Fuel was $6,000. By the end of 2015, it shot up to $14,000.
“That’s a 233% growth spurt in 12 months.
“At that rate, the price of Salt Fuel could surge 1,165% in the next 5 years alone.”
There is no spot price for lithium, it’s not a widely traded commodity — so that means any pricing should be taken with a grain of, well, salt… but lithium companies and investors generally believe the price is rising, and prices have spiked into the $14,000/tonne range in at least some deals in China over the past year (much of that is mined Australian spodumene that is processed to remove the lithium in Chinese plants — China continues to dominate the lithium battery business, mostly because of demand for consumer electronics-size batteries).
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