The Critical Commodity Behind the Next U.S. Industrial Boom

In the 1980s, the oil industry gave up on Magnolia...

Any time the wells in the small Arkansas town ran, they just pumped up gushes of saltwater. That's not a liquid any oil company wants to deal with.

When the oil companies left, so did pretty much all of Magnolia's economy. There's not a lot else to do in southwestern Arkansas... And for most of the past 40 years, the town has remained pretty sleepy. Its population is less than 12,000 these days.

All of that is about to change...

You see, oil isn't the only treasure hidden beneath Magnolia's soil. It's located right in the center of a huge reserve... one that will help power the next few generations of cars, just like oil has powered the past few.

I'm talking about a lithium reserve called the Smackover formation. It stretches from northeast Texas all the way to the Florida panhandle. And it's filled with metallic brine.

This is the same brine that got in the way of all those oil companies in the 1980s. It scared the energy industry out of Magnolia four decades ago.

And as I'll explain today, it's all about to come roaring back...

The Smackover formation contains enough lithium to create batteries for 50 million electric vehicles ('EVs')...

Even though the U.S. only produces 1% of the world's lithium, we're already the fifth-biggest lithium importer in the world. We also have massive lithium reserves.

And yet, we've let countries like Australia, Chile, and China completely overtake us.

If America wants to maintain energy independence as we embrace EVs, we'll need a way to balance the deficit between production and consumption. Small towns like Magnolia are the key to ending our reliance on other countries – particularly China – for the lithium that goes into our batteries.

We're already halfway there. The U.S. has more lithium reserves than China or Australia. We just need to build mining infrastructure.

Big companies are finally answering that call. Many are setting up shop in and around Magnolia... like Standard Lithium (SLI).

The commercial lithium developer is looking to break ground on a Magnolia-based facility that would produce up to 6,000 metric tons per year... instantly making the U.S. the fourth-largest lithium producer on Earth.

Energy major ExxonMobil (XOM) plans to build one of the world's largest lithium facilities right outside Magnolia. It's expected to have capacity of up to 110,000 metric tons per year.

If that factory turned on tomorrow, the U.S. would be the biggest lithium producer in the world... making about 43% of the world's supply.

Standard Lithium and Exxon are only the start. According to a new International Energy Agency ("IEA") report, demand for the metal has tripled over the past five years.

By 2040, the IEA projects that the world will need 1.1 million tonnes of lithium per year.

We're about to enter a veritable lithium 'gold rush'...

As we keep pumping out more battery-powered goods – and as the world embraces EVs in particular – lithium demand is expected to outstrip supply by 2025.

It will transform the U.S. economy... and create huge winners as it buoys other industries. We're calling this new industrial age the "Great American Rebirth."

Demand is already sending lithium prices through the roof. The commodity is up nearly 200% over the past three years... even after falling more than 80% from its all-time high in November 2022.

Better yet, despite their uptrend, prices are experiencing a bit of a "winter" period at the moment. As interest rates started rising, investors got worried about fledgling technologies like EVs.

For a commodity with a clear long-term path higher, this is exactly when you want to buy in.

Regards,

Joel Litman
December 21, 2023

P.S. A new golden era in U.S. manufacturing is rapidly taking hold... and while lithium is leading the way, plenty of other industries will be close on its heels.

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