Australia And China Lead The Way As Lithium Demand Boosts Rare Earth Metals
By Steven Braid, Data and Marketing Analyst
With General Motors, Volkswagen, and other automakers jumping on the Tesla electric vehicle bandwagon, one industry has seen an unexpected surge in prices: lithium.
The demand for electric vehicles has sparked a rush for the lithium mines, as analysts are expecting a ten-fold increase in lithium production over the next 5 years to keep pace with the production of lithium-ion batteries, which are used for electric vehicles.
The lithium surge is clearly reflected in the rare earth metals industry, where the top players are lithium-producers in China and Australia, two countries that have the largest reserves of lithium mining. MVIS Global Rare Earth/Strategic Index (ticker: MVREMX), which tracks the performance of the largest and most liquid companies that generate at least 50% of their revenue from rare earth and strategic metals or companies that have ongoing mining projects that have the potential to generate at least 50% of their revenue from rare earth and strategic metals, has rocketed due to the lithium demand.
As of September 27th, 2021, MVREMX is up more than 67% year-to-date and 194% in the past year. With demand continuing to increase, the rare earth metals segment appears to have a long runway for growth.
MVIS Global Rare Earth/Strategic Index
Source: MV Index Solutions. All values are rebased to 1000. Data as of 27 September 2021.
About the Author:
Steven Braid is a Data and Marketing Analyst at MV Index Solutions. He is responsible for supporting the data, marketing, research, and product services. Prior to working for MVIS, Steven worked as an equity research analyst for Dane Capital Management, a special situations hedge fund, where he focused on SPACs and other forms of special situation transactions. Prior to his time in Finance, he worked as a professional journalist, publishing for the New York Times, USA Today, and other national periodicals. Steven has a M.S. in Data Analytics & Applied Research from the Baruch College Zicklin School of Business, and a BA in International Political Economy from the University of Michigan.
The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.