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The US is witnessing a surge in lithium exploration activities, driven by the escalating demand from the electric vehicle (EV) and battery sectors. As the nation seeks to establish a robust domestic supply chain, companies are employing diverse strategies to secure lithium resources and position themselves as key players in this burgeoning market.
This evolving dynamic is creating ample opportunities for investors to participate in this critical piece of the clean energy transition. Gaining a better understanding of the US lithium exploration market can provide valuable investment insights.
US lithium exploration landscape
The lithium exploration landscape in the US is rapidly developing, with companies adopting multifaceted approaches to meet the growing demand. These strategies include securing extensive landholdings in lithium-rich regions, focusing on high-potential projects and developing innovative extraction techniques.
One notable area of development is California’s Lithium Valley, which is poised to play a crucial role in supporting the EV battery industry. Additionally, companies are introducing advanced technologies, such as portable and fully automated direct lithium extraction plants, to streamline the extraction process and enhance sustainability.
The demand for lithium in the US is projected to increase dramatically, driven primarily by the expanding EV market and supportive government policies. Forecasts suggest a staggering 500 percent increase in US lithium demand, reaching approximately 412,000 tonnes of lithium carbonate equivalent by 2030.
This surge is largely attributed to ambitious EV production targets, which are expected to drive battery demand for lithium up four and a half times by 2030 in certain scenarios. The projected annual growth rate of around 20 percent through 2030 underscores the urgent need for a strengthened domestic supply chain to meet this escalating demand.
“Looking forward, investors and carmakers have been fleshing out ambitious plans for manufacturing expansion, confident that demand for EV and stationary batteries will continue to grow as a result of increasing electrification and power grid decarbonisation,” the International Energy Agency’s Global EV Outlook 2024 report says.
Chariot: A case study in strategic exploration
As lithium exploration activities in the US continue to expand, one company has taken a strategic approach to exploration and development, with promising outcomes. Australia-based Chariot (ASX:CC9) has positioned itself as a notable player in domestic lithium exploration with significant projects like Black Mountain, Resurgent and Horizon.
At the Black Mountain project in Wyoming, where Chariot holds a 93.9 percent stake, the company has successfully intersected high-grade spodumene mineralisation. This progress has led to considerations of establishing a pilot mining project to supply spodumene concentrate to lithium hydroxide refineries under construction in the US.
The Resurgent Project, spanning Nevada and Oregon, is strategically located in the McDermitt Caldera, known for hosting two of the largest lithium mineral resources in the US. With a 79.4 percent ownership, this project underscores Chariot’s focus on regions with exceptional mineral potential.
Chariot’s Horizon and Halo lithium projects consist of 937 mineral claims across 19,358 acres in Tonopah, Nevada. Horizon alone boasts a maiden mineral resource estimate comprising 1.3 million tonnes of lithium carbonate equivalent in the indicated category, and 8.8 million tonnes of inferred lithium carbonate equivalent.
Other US lithium players
Chariot is not the only company leveraging US lithium resources.
Mining giant Albemarle (NYSE:ALB) operates one of the few commercial lithium production facilities in the US, located at Silver Peak, Nevada. The company has announced plans to significantly expand its lithium production in this region, aiming to double output by 2025. This expansion involves an investment of $30 million to $50 million and centers around the extraction and use of lithium-rich brine resources from evaporation ponds at the site.
Lithium Americas’ (TSX:LAC,NYSE:LAC) Thacker Pass project, located in Humboldt County, Nevada, recently received a $625 million investment from American automaker General Motors to acquire 38 percent interest in the Thacker Pass project. This project is recognised as one of the largest lithium resources in the US.
Piedmont Lithium (ASX:PLL) is actively advancing projects in North Carolina and Tennessee to establish a robust domestic lithium supply chain in the US. Its Carolina Lithium project in North Carolina is progressing through the permitting and approvals processes. Piedmont’s Tennessee Lithium project has also seen significant developments. In July 2023, the company obtained the final construction and air permit from the Tennessee Department of Environment and Conservation, marking a critical step toward commencing construction.
Strategies for securing US-based lithium assets
Companies like Chariot are assembling extensive lithium portfolios across multiple states.
This approach not only increases the likelihood of significant discoveries but also positions these companies as potential major players in US-based lithium production.
Adopting a strategic approach to secure lithium assets is key for potential success of any lithium exploration efforts. These strategies include:
- Extensive landholdings: Acquiring large land positions in areas known for high lithium potential, such as the McDermitt Caldera and Wyoming.
- Targeting lithium-rich regions: Targeting exploration efforts on areas with outcropping surface mineralisation to enhance the likelihood of discovery and maximise success rates.
- Diversified deposit types: Pursuing both hard rock and claystone deposits to cater to diverse market needs and mitigate risks associated with a single deposit type.
- Strategic asset management: Developing large-scale portfolios across multiple states to amplify resource potential and diversify risk.
High-potential projects and investments
A critical strategy in the US lithium exploration sector is the concentration of resources on core projects with significant early stage potential. Regions such as the McDermitt Caldera in Nevada and hard rock lithium areas in Wyoming are receiving particular attention due to their geological promise.
The investment landscape for US-based lithium exploration companies appears promising, particularly for those with a diversified approach.
Investors are increasingly drawn toward companies that manage their assets strategically. The ability to assemble large-scale portfolios across multiple states amplifies resource potential and diversifies risk, making these companies attractive prospects for those looking to engage in the energy transition.
As the US seeks to reduce reliance on international lithium sources and establish a robust domestic supply chain, companies at the forefront of exploration and development stand to benefit significantly. The projected 20 percent annual growth rate in lithium demand through 2030 suggests a substantial opportunity for well-positioned companies to create value for investors while contributing to the nation’s energy independence.
Key takeaway
The US lithium exploration landscape is rapidly evolving, driven by the urgent need to secure domestic supplies for the burgeoning EV and battery markets. As companies like Chariot demonstrate, strategies focusing on extensive landholdings, high-potential projects and innovative approaches are key to success in this sector.
With demand projected to soar and government support for domestic production increasing, the US lithium industry is at the cusp of significant growth. For investors, this presents a unique opportunity to participate in a critical component of the clean energy transition, with the potential for substantial returns as the market continues to expand.
This INNSpired article is sponsored by Chariot (ASX:CC9). This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by Chariotin order to help investors learn more about the company. Chariot is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.
This INNSpired article was written according to INN editorial standards to educate investors.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Chariotand seek advice from a qualified investment advisor.
