Huge Untapped Profits Are Waiting In The Chilean Desert
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Batteries — or in more precise terms, energy storage devices — have remained pretty much unchanged for almost a century. And it’s only been in the past two decades, with the advent of the portable computer, that engineers have been working diligently to find smaller, lighter, cooler and more durable energy storage technologies.
The biggest breakthrough at this point is lithium ion batteries. They can store a charge in a relatively small package and can be cycled — one cycle is a run from full to empty — many times, making them durable and reliable.
#-ad_banner-#All these advantages have made our mobile lives much more tech-laden, since we can now take devices to places and do things with them we never dreamed of 20 years ago. Lithium ion batteries are game-changers, and exactly the kind of trend I look for in my premium letter Game-Changing Stocks.
From cameras to mobile phones to computers to cars, lithium ion energy storage is going to be around for a long while. And as emerging markets grow, so will demand for the consumer products that are powered by these devices — none more so than cars and busses.
I bet just a few years ago the thought of battery-powered cars would have made you smirk. Sport utility vehicles ruled the road. And while we knew it was possible to get from Point A to Point B in a vehicle powered by batteries, the thought also conjured up images of a tiny car that looked more like a tin can than an automobile.
How times have changed. With a push toward “green” fuel sources and a dramatic rise in gasoline prices, battery-powered cars not only became popular — they became status symbols.
Sales have similarly followed suit, as you can see from the chart below. But they’re just going to increase. I think a record number of electric and hybrid cars could be sold in the United States in 2011, especially if gasoline prices shoot back up. And keep in mind that Japan buys just about as many hybrids right now as the U.S.
General Motors is going electric with the Volt. Ford is planning a battery-powered car based on the Focus. And of course Toyota has the Prius… Honda, the Insight… and Nissan’s Leaf just debuted in Europe.
Despite record sales, the big winners won’t be the car makers. I think there is another way to make even more money from the transition and growth of battery power.
Investors who win big will be looking at a desert in Chile. Salar de Atacama is a salt flat in Chile that at first glance doesn’t look like it would offer much in the way of natural resources. But what this special place holds might be the auto industry’s most valuable piece of real . It contains one of the world’s largest deposits of a rare metal needed in every new electric car rolling off the assembly line: lithium.
Lithium is the key component in next-generation electric car batteries, and it may prove as valuable as gold. And to play the increased demand, I like one miner in particular. It’s the world’s largest producer of lithium (31% of the world’s production), thanks to Salar de Atacama.
But just because it’s a large company is not why I like this company. Lithium mining is actually kind of interesting. Miners collect brine from the salt flats and put it into solar drying ponds. It helps that the Atacama is one of the hottest places on earth, which means this firm can not only operate faster than its competitors, but it can also operate year-round.
This miner’s other advantage lies in the fact that its brine has an extremely high concentration of lithium. As a result, the company can produce the metal at a cost that’s significantly lower than its competitors (about 30-50% lower).
Being the low-cost producer is a powerful competitive advantage, especially given the future demand for lithium. In fact, I think the potential for lithium to be a game-changer is so great, I’ve named it one of my 10 Hottest Investment Opportunities for 2011.
Action to Take –> Given the future demand for lithium and Chile’s huge reserves of the , the future seems very bright.
What’s more, the development of lithium is even timelier now as the nation of Chile surges forward. After a devastating earthquake early last year, Chile’s is one of the strongest on earth, and its closed-end funds and exchange-traded funds (ETFs) are rallying. A rising tide lifts all boats, including smart investors.
P.S. This is just one example of the opportunities I see for 2011. I hope you will join me in exploiting these types of money-making investing opportunities every month in my premium letter Game-Changing Stocks.