Visualizing the Global Demand for Lithium
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Visualizing the Global Demand for Lithium

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The following content is sponsored by Scotch Creek Ventures.

Visualizing the Global Demand for Lithium

Visualizing Global Demand for Lithium

Lithium is one of the most in-demand commodities in the world today.

With the ongoing shift to electric vehicles (EVs) and clean energy technologies, governments and EV manufacturers are rushing to secure their supply chains as demand for lithium soars.

But while China has a strong foothold in the lithium race, the U.S. is lagging behind. This infographic from our sponsor Scotch Creek Ventures highlights the rising demand for lithium and the need for a domestic supply chain in the United States.

What’s Driving the Demand for Lithium?

Global lithium production more than doubled in the last four years to 82,000 metric tons in 2020, up from 38,000 metric tons in 2016. Here are some of the factors driving the lithium rush:

  1. More EVs on the Road:
    EV sales have been accelerating in recent years. Between 2016 and 2020, annual electric car sales increased by 297%, up from around 750,000 to nearly 2.9 million cars last year.
  2. Falling Battery Prices:
    Declining lithium-ion battery prices are allowing EVs to compete more aggressively with gas-powered cars. Since 2013, battery costs have fallen 80% with a volume-weighted average of $137/kWh in 2020.
  3. Rise of the Battery Megafactories:
    More battery manufacturing capacity means more demand for the critical minerals that go into batteries. As of March 2021, there were 200 battery megafactories in the pipeline to 2030, and 122 of those were already operational. According to Benchmark Mineral Intelligence, if all 200 battery megafactories were operating at full capacity, their annual demand for lithium would be 3 million tonnes. That’s almost 37 times the 82,000 tonnes produced in 2020.

Although the demand for lithium is rising globally, its supply chain from mines to batteries relies on a only few critical nations.

China’s Lithium Dominance

In 2020, Australia, Chile, and China collectively made up 88% of global lithium production. After mining, the lithium supply chain involves refining, processing, and packaging the lithium into batteries—and the majority of this occurs in China.

In 2019, China produced 80% of the world’s refined battery chemicals, in addition to 73% of lithium-ion battery cells. What’s more, of the 200 battery megafactories in the pipeline to 2030, 148 are in China. As a result, China is far ahead of other countries in the race for lithium and batteries.

On the other hand, the U.S. is heavily reliant on imports for its supply of lithium, with only one lithium-producing mine in the country. As demand increases, this lack of production could threaten U.S. energy independence in the future. To address this and gaps in the supply of other critical minerals, U.S. President Biden also signed an executive order aiming to build secure supply chains for strategic minerals.

But where is lithium in the United States?

Nevada: The Lithium State

Nevada is known as the Silver State for its rich history of silver mining. Today, it’s the only source of lithium production in the U.S.

Clayton Valley and Kings Valley, two of the country’s largest lithium deposits, are in Nevada. The country’s only producing mine, Albemarle’s Silver Peak Mine, produces around 5,000 tonnes of lithium every year in Clayton Valley. Furthermore, the region is among the world’s richest closed-basin brine deposits based on grade and tonnage.

In addition to a rich lithium deposit, mining companies in Clayton Valley can also reap the advantages of Nevada as a jurisdiction. These include access to infrastructure, a skilled mining workforce, and proximity to a battery manufacturing base with Tesla Gigafactory 1. But that’s not all—in 2020, the Fraser Institute gave Nevada the top spot for mining investment attractiveness globally.

Meeting Lithium Demand for Energy Independence

As countries work to expand EV adoption, critical battery metals like lithium are becoming geopolitically significant, and their supply could redefine energy independence going forward. For this reason, the U.S., EU, and Canada all have lithium on their list of minerals that are critical to national security.

The U.S. needs to build a domestic lithium supply chain from the ground up, and Nevada has the potential to support it with lithium in Clayton Valley. Scotch Creek Ventures is developing two lithium mining projects in Clayton Valley to supply lithium for the green future.

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Fixed Income ETFs: Investors’ Ticket to Flexibility

Fixed income ETFs are a go-to tool for institutional investors. Find out why professionals use them in this graphic.

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Fixed Income ETFs

Download the ETF Snapshot for free.

Fixed Income ETFs: Investors’ Ticket to Flexibility

When market volatility surges, fixed income investors encounter multiple pressure points. For example, they may face difficulties with liquidity, price discovery, and transaction costs.

In this infographic from iShares, we show how fixed income ETFs help address these challenges. It’s the second in a five-part series covering key insights from the ETF Snapshot, a comprehensive report on how institutional investors manage volatility.

The Methodology

To assess the role that ETFs play, Institutional Investor published a report in 2021 based on a survey of 766 decision makers. Respondents were from various types of organizations, firm sizes, and regions.

For instance, here is how responses broke down by location:

  • 21% Asia Pacific
  • 36% North America
  • 29% Europe, Middle East and Africa
  • 14% Latin America

Here’s what the survey found.

Encountering Roadblocks

During 2020 market volatility, the vast majority of institutional investors said they had difficulty sourcing (95%) and/or transacting (92%) in individual bonds.

Smaller firms faced these roadblock more often than larger institutions.

Assets Under Management% Who Faced Great Difficulty Sourcing Bonds
$5B or less61%
$5B-$50B46%
$50B+42%

How did institutional investors overcome these liquidity challenges?

Turning to Fixed income ETFs

More than half of institutions increased their use of ETFs as they looked to source, price, and transact bonds. In fact, in the first three months of 2020, fixed income ETF trading volume reached $1.3 trillion—half of 2019’s total.

ETFs also became more popular relative to their underlying basket of securities. During extreme volatility in April 2020, ETF trading volume relative to the underlying securities was three times higher than the 2019-2020 average.

With their higher liquidity, ETFs also helped institutional investors with price discovery.

“When there was no trading activity in certain corporate bonds, you can use the ETFs as a pretty good proxy for what people are willing to pay and what the appetite is.”
—Senior Analyst, Asset Management firm

However, the usefulness of fixed income ETFs goes far beyond liquidity.

Want more institutional insights into ETFs?

ETF Snapshot

Download The ETF Snapshot for free.

A Versatile Tool

Institutional investors said fixed income ETFs were a good replacement for individual bonds for a number of reasons.

Reason % of Respondents
Liquidity61%
Quick Market Exposure/Access55%
Avoidance of Individual Security Analysis51%
Transparency of Holdings46%
Transaction Costs40%

The difference in transaction costs is particularly evident in the fixed income landscape. During extreme market volatility in March 2020, the bid-ask spread* for the iShares High Yield Corporate Bond ETF was 48 times smaller than the underlying securities.

* A bid-ask spread measures the difference between what an investor is willing to buy a fund for (the bid price) and the price an investor is willing to sell for (the ask price). A smaller bid-ask spread indicates greater cost efficiency.

In light of these attributes, fixed income ETFs are a go-to tool for institutional investors. In fact, they were top-rated for a number of use cases.

Purpose% of Respondents
Portfolio Rebalancing62%
Tactical Adjustments66%
Derivative Complement/Replacement66%
Transition Management74%
Liquidity Management83%

One senior analyst at an asset management firm noted that it was easy to get granular with asset allocation because there are so many ETFs with plenty of liquidity.

The Future of Fixed Income ETFs

As of May 2021, fixed income ETFs made up 18% of all ETF assets under management. It’s likely that their role could become more prominent in the future.

For instance, 34% of institutional investors are likely to increase their use of fixed income ETFs going forward. One thing is evident: fixed income ETFs have proven to be flexible tools, especially during heightened market volatility.

​​Download the ETF snapshot for free.

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Visualizing Carbon Storage in Earth’s Ecosystems

Forests are vital carbon sinks, soaking up about 40% of all emissions annually. Here is the carbon storage of ecosystems around the world.

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Carbon Storage

Visualizing Carbon Storage in Earth’s Ecosystems

Each year, the world’s forests absorb roughly 15.6 billion tonnes of carbon dioxide (CO2).

To put it in perspective, that’s around three times the annual CO2 emissions of the U.S. or about 40% of global CO2 emissions. For this reason, forests serve as a vital tool in regulating the global temperature and achieving net-zero emissions by 2050.

In this graphic sponsored by Carbon Streaming Corporation, we look at the Earth’s natural carbon sinks, and break down their carbon storage.

Carbon Storage by Ecosystem

Forests contain several carbon sinks, from living biomass such as roots and leaves to soil. In fact, soil contains nearly twice as much carbon than the atmosphere, plant, and animal life combined.

  • Soil: 2,500 gigatonnes (Gt)
  • Atmosphere: 800 Gt
  • Plant & animal life: 560 Gt

The soil type, vegetation, and climate all affect how carbon is stored. For example, colder and wetter climates promote the most effective carbon storage in soil.

Global Carbon Storage* (Tonnes of carbon per hectare)Vegetation Soil
Wetlands43643
Boreal forests64344
Temperate grasslands7236
Tundra6127
Tropical forests120123
Tropical savannas29117
Temperate forests5796
Croplands280
Deserts and semideserts
242

*Average stored carbon in tonnes per hectare at a ground depth of one meter
Source: IPCC

Wetlands are substantial reservoirs of carbon. Despite occupying only 5-8% of the Earth’s land surface, they hold between 20 to 30% of all estimated organic soil carbon.

Risks to Natural Carbon Sinks

Around 8.1 billion tonnes of CO2 leaks back into the atmosphere each year.

Over the last 20 years, the world has lost about 10% of its tree cover, or 411 million hectares (Mha). The main causes behind this are forestry (119 Mha), commodity-driven deforestation (103 Mha), and wildfires (89 Mha). What’s more, research suggests that Amazon rainforests emit more carbon than they absorb due to record levels of fires, many of which are deliberately set to clear for commodity production.

With the increasing frequency of wildfires and deforestation, the world’s forests are at risk of releasing carbon. Protecting and preserving these biomes is critical to the Earth’s carbon balance and mitigating climate change.

Carbon Credits Provide a Solution

Given the risk of losing critical carbon sinks, carbon credits play an important role in preserving these ecosystems.

Carbon credits can help finance projects that reduce or remove GHG emissions from the atmosphere. From improved forest management to reforestation, there are a number of different types of carbon projects across wetlands, grasslands, and various forests:

  • Reforestation and Afforestation
  • Avoided Deforestation
  • Natural forest management
  • Wetland restoration

For instance, a carbon credit project may preserve endangered tropical lowland peat swamp forests spanning thousands of hectares, such as the Rimba Raya Biodiversity Reserve Project in Indonesia, one of the projects that Carbon Streaming has a carbon credit stream.

Through this project, forests are prevented from being converted into palm oil plantations to reduce and avoid 130 million tonnes of GHG emissions during the 30 years of the project.

Another example would be the Cerrado Biome Project in Brazil, another carbon offset project where Carbon Streaming has a stream agreement. This project is protecting and preserving native forests and grasslands from being converted to commercial agriculture.

Importantly, these projects would not be economically viable without the sale of carbon credits.

Protecting Stored Carbon

To prevent further loss of stored carbon, government policies, NGO-led initiatives, and the financing of carbon offset projects are gaining momentum. Taken together, they offer the critical intervention needed to preserve the earth’s carbon vaults.

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