Galaxy is one of a number of Australian lithium companies in favour with investors, who are backing the companies given the ongoing rise of electric vehicles and the need for lithium in electric vehicle batteries, as well as the rise of electric batteries for power storage. Galaxy Resources, for instance, closed at $1.55 on June 15, a one year closing price low. In the period since it has more than doubled. Wednesday was also a big day on the market for Kidman Resources, after it delivered an update on its Mt Holland lithium project in Western Australia. Shares in Kidman jumped 17 cents (11.5 per cent) to close at $1.65 on the news. Kidman said drilling work had delivered "exceptional results" and increased the company's confidence in the mineral resource. "The major focus of the 2017 drilling program has been to expand the already globally significant Earl Grey Mineral Resource to enhance the long-term planning for the Integrated Lithium Project. This clarity in scale provides greater confidence in the supply chain capacity of the Project for potential customers in the automotive and energy storage sectors," said Kidman's managing director, Martin Donohue. Anthony Tse, managing director of Galaxy Resources, said there had been very strong interest in Galaxy's lithium concentrate from a large range of current and new buyers. He forecast that demand for Galaxy's lithium concentrate would rise significantly during the five year contract term. Galaxy has a market capitalisation of about $1.52 billion, the biggest market capitalisation of any Australian pure-play lithium company. Assessing the Galaxy announcement, Citi analyst Clarke Wilkins said: "While positive, we see this announcement largely on expected lines and the market will likely continue to focus on the project pipeline progress." Loading Mr Wilkins said Galaxy had also signed a "conversion agreement" that would see some of Mt Cattlin's lithium concentrate converted into lithium carbonate/hydroxide on behalf of Galaxy. "This will allow Galaxy to sell downstream lithium chemical products to consumers directly and capture higher share of lithium value chain. We believe this also fits into Galaxy's strategy to develop relationship with end-consumer for potential future product mix of the company," he said.
Interest in Galaxy Resources jumped on 29 November after it said it had signed a series of long - term lithium off - take agreements with customers in Asia . The five - year price cover are for a minimum of 200,000 tonnes per annum of lithium production , and buyers for all the output of Galaxy 's Mt Pleasant mine in Western Australia as far ahead as 2022 . Galaxy also said it would be paid a higher " headline " price for its product in 2018 than 2017 .