Lithium demand is projected to quadruple by 2030, driven by the electric vehicle boom and increasing global energy storage needs.
Li-FT Power has strengthened its lithium portfolio through key projects in Canada, including its recent acquisition of 9,681 hectares in the Little Nahanni Pegmatite District.
With a price target of $9.25 CAD and a potential upside of 240%, Li-FT Power offers a strong investment opportunity in the growing lithium market.
The electric vehicle (EV) boom, led by companies like Tesla, Nio, and Stellantis, has brought global attention to lithium, a vital resource for the EV industry. Governments and corporations are racing to secure it for future energy needs. Despite having its own lithium reserves, the United States currently produces only 1% of the global supply, making it heavily dependent on foreign sources, especially China. To safeguard its energy future and reduce reliance on geopolitical rivals, the U.S. must ramp up domestic lithium production significantly.
Lithium Abundance vs. Production Concentration
Though lithium is widely distributed across the globe, its production is dominated by a handful of countries. Australia, Chile, China, and Argentina produce over 95% of the world’s lithium. However, the United States holds significant untapped reserves, particularly in Nevada, North Carolina, and California. These states are estimated to contain about 4% of the world’s lithium deposits, making the U.S. home to some of the largest reserves outside the Lithium Triangle in South America. Despite this, U.S. production remains limited compared to global leaders.
As the electric vehicle (EV) industry accelerates, lithium demand is projected to surge. Benchmark Mineral Intelligence forecasts that by 2030, annual lithium demand will hit 2.4 million tons, four times the expected production for 2024. To support this growing need, the Inflation Reduction Act (IRA) introduces $370 billion in incentives for domestic EV and battery production, aiming to reduce reliance on imports. Additionally, earlier in 2023, the Department of Energy committed $3 billion to boost the U.S. EV supply chain, following the Bipartisan Infrastructure Law’s passage, which further emphasizes localizing production and bolstering the clean energy industry.
“This initiative is going to coordinate the effort across the federal government and work closely with the private sector, labor unions, Tribes, community organizations, and our partners and allies abroad… It’s going to secure America’s electric vehicle battery supply chain and clean energy future”
President Joe Biden
China’s Strategic Control Over the Lithium Supply Chain
China’s dominance over the global lithium supply chain is a result of strategic investments and policies aimed at controlling critical minerals. According to a 2021 White House report, between 2009 and 2019, China funneled $100 billion in subsidies, rebates, and tax exemptions to its companies and consumers to capture the lithium refining market before demand skyrocketed. This gave China a powerful position as both the largest consumer of unrefined lithium and the leading producer of refined lithium.
China has employed anti-competitive tactics, such as subsidizing production even when demand was low and dumping products at below-market prices to outcompete international players. Chinese companies
have also invested heavily in lithium mines around the world, ensuring their access to the supply. This strategy mirrors China’s actions in controlling other critical minerals like cobalt, graphite, and nickel, further entrenching its global mineral dominance.
“America must reduce its reliance on China and other adversaries for critical minerals… Our nation’s dependence on foreign sources for these materials creates a serious threat to our national and economic security”
Senator Gary Peters
My Stock Pick: Li-FT Power for America’s Independency
The reason why I am mentioning Li-FT Power (TSXV: LIFT, OTC: LIFFF, FRA: WS0) is because the company focuses on acquiring, exploring, and developing high-potential lithium pegmatite projects in Canada. Its flagship asset, the Yellowknife Lithium Project in the Northwest Territories, is key, covering a large portion of the Yellowknife Pegmatite Province, known for significant lithium pegmatite formations. Along with this, Li-FT holds three promising early-stage exploration properties in Quebec and is advancing the Cali Project in the Little Nahanni Pegmatite Group, further strengthening its position in the lithium market.
On September 3, 2024, Li-FT Power announced a significant expansion of its operational area in the Little Nahanni Pegmatite District, located in the Northwest Territories, Canada. The company acquired an additional 9,681 hectares at its Cali Project, which includes outcropping spodumene pegmatites—a crucial lithium-bearing mineral—linked to the broader Cali dyke swarm that the company has been actively mapping.
This expansion was made possible following the Nááts’ı̨hch’oh Amendments to the Sahtú Land Use Plan in June 2024, which provided new opportunities for staking claims in the region. These amendments were expected after receiving endorsement from the Sahtú Secretariat Incorporated and the Government of the Northwest Territories back in 2019.
As of September 20, 2024, Li-FT Power’s stock is trading at $2.72 CAD, with a market capitalization of $107.24 million CAD. In terms of future projections, analysts have set a 12-month price target of $9.25 CAD, representing a potential upside of 240.07%, with estimates ranging from a low of $8.50 CAD to a high of $10.00 CAD. The company’s share structure includes 42.7 million outstanding shares and an additional 1.07 million options, for a fully diluted total of 43.8 million shares. Ownership remains concentrated, with 55% held by founders, 17% by institutional investors, 25% by retail investors, and 3% by management and directors. Top institutional shareholders include Commodity Capital AG, Extract Capital, and Tribeca Investment Partners.
Conclusion
Lithium is becoming an increasingly vital resource as the demand for electric vehicles (EVs) surges, yet production remains concentrated in a few countries like Australia, Chile, China, and Argentina. While the U.S. holds significant untapped reserves, production has not kept pace with global leaders. To address this, the Inflation Reduction Act and Bipartisan Infrastructure Law provide substantial funding to boost domestic lithium production and reduce reliance on China, which dominates the lithium refining market. Companies like Li-FT Power are poised to benefit from these trends, with their strategic lithium projects in Canada. Recent expansions in the Northwest Territories position Li-FT to capitalize on rising demand. With analysts projecting a 240% stock price increase, Li-FT offers strong growth potential, supported by its concentrated ownership and promising lithium assets.