Green Investing – A New Lithium ETF makes it easy to invest in the "New Oil"

Lithium has been touted by some media outlets as the “new oil” with its potential substitution of oil in the transportation industry.Lithium Batteries are considered as the standard components of Electric Vehicles despite some competition from other chemistries like Nickel Metal Hydride.However its superior energy density and weight makes it the ideal fit for use in Electric Vehicles.Only the high costs of Lithium batteries have made its uptake slower.A123 Systems successful IPO brought Lithium Batteries into the mainstream consciousness with investors suddenly discovering the virtues of investing this metal.

Now it has become easier to invest in this metal with the launch of an ETF dedicated to Lithium alone.This ETF which is being launched by Global X Management with tracks stocks of electric vehicle producers and battery makers.I am not a fan of the Lithium Battery makers or Electric Vehicle producers because the economics still do not make sense for these sectors.Beside most of these companies like A123,Ener1,Tesla are still running into losses with prospects of profits still 2-3 years away.However for the Green Faithful these ETF is a way to put their money where their mouth is .

New ETF Charges Up a Niche – WSJ

Bolivian magnate R. Marcelo Claure had been looking for a way to make a broad-based bet on lithium. A hedge fund in which he invests found him one.The fund, MC Capital Advisors, this year turned to a company that creates exchange-traded funds. The result was Global X Lithium, an ETF that tracks lithium producers and battery makers. It is expected to launch this week.The highly reactive metal isn’t traded on any commodity exchange. Companies producing lithium are either multinationals where lithium accounts for only a small portion of their businesses or nascent miners where production still is years away.

Lithium prices have tripled since 1999, according to Credit Suisse. Global demand for the metal is expected to more than double by the end of this decade, according to TRU Group Inc., a Toronto independent consultant specializing in lithium.Some analysts warn against the “overhype” in the lithium market. About 50 companies were set up over the past two years to develop lithium, but more than 80% of them will never come into production due to technology challenges and costs, said Edward Anderson, president of TRU Group. Lithium also is in abundant supply, he said.