BlackRock has become a big supporter and financial backer of lithium related start up companies during a time where the world’s biggest asset manager takes a big bet on widespread acceptance of electric vehicles like Tesla’s P90d.
Known as the BlackRock World Mining Trust, it has now invested enough money to have amassed over one billion dollars in assets. The Trust is also co managed by Evy Hambro, becoming the largest shareholder in a handful of smaller mining operations that target the production of lithium to use in batteries.
To this end, the supply and demand supports continued growth. Lithium has been surging in demand as the first electric vehicle for mass market reach has rolled off the production line. Tesla’s Model 3 and Nissan’s Leaf vehicles have attracted new buyers who had previously been priced out of former offerings of electric vehicles. American auto maker, Chevy has also entered the market with it’s own version called the Bolt.
Increased demand for electric vehicles has triggered a race to find new supply of lithium and as a result, prices are jumping. To date, the price of lithium has increased by roughly twenty six percent so far this year. It is now one of the highest performing commodities in the market.
“Today the energy space is evolving towards a low carbon footprint and the combustion engine is going to be replaced with an alternative…We want to be invested in companies that will be producing the raw materials that will be needed to meet this growth.” – Evy Hambro
And the best could still be yet to come. According to Simon Moores, “Over the past year about $1bn has been raised by lithium developers and explorers, but that funding will need to rise to $6bn by 2025 to meet demand.”
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