It was Hancock Prospecting (HPPL),the family flagship company controlled by his mother Gina Rinehart.

“I’m sure HPPL had been researching the space for some time,conducted extensive due diligence on many projects globally and came to the conclusion as I did eight months prior - Vulcan is the best positioned lithium play around,” Hancock says.

“I didn’t discuss Vulcan,or need to,with my mother or HPPL executives,” he adds.

The lithium sector has experienced this euphoria before.

Australia’s lithium sector has provided investors with a rollercoaster ride over the past decade with a China-driven boom petering out in 2019 thanks to a drop in that country’s demand incentives just as fresh supply came online in Australia - the largest source of lithium.

Prices collapsed from a 2017 peak of $US25,000 per tonne of lithium carbonate equivalent (LCE) to a low of $US5000,and so did some lithium miners.

But this time is different says those in the sector. The clear message is that the hiccup of 2018-2019 will not be repeated as Europe,and now the US,vie with China for supremacy in production of the batteries that could determine who will dominate the e-vehicle sector.

And the automakers will need to deal with large reputable suppliers with global scale,not one-project wonders,says Galaxy’s chief executive Simon Hay of the merger with Orocobre to create a global player.

“Our geographic diversity,and also our production diversity,means that we can supply customers,major customers,on multiple continents with multiple different product offerings,” says Hay.

The challenge will be dealing with the voracious demand as Tesla demonstrated at its battery day in September last year. “Tesla’s demand for lithium by 2030 exceeded the entire industry’s projections,” says Hay. “Lithium stocks that day started to run.”

In November,the UK brought forward plans to phase out petrol cars to 2030,matching Germany’s target. The industry got another major kick-along in late January when GM announced its path to purely e-vehicles by 2035.

US President Biden’s$US2 trillion infrastructure plan will include $US174 billion worth of spending to encourage Americans to switch to e-vehicles.

The European Union’s “Green Deal” - a trillion euro plan for the decarbonisation of its member state - also includes carrot and stick incentives for car buyers and manufacturers,respectively,to encourage a significant uptake in e-vehicles.

“What we see now is essentially the whole world really transitioning towards the electrification of transport,which is driving a massive increase in production capacity for lithium ion batteries,which is in turn driving a very sharp increase upwards in lithium demand,” says Vulcan chief executive Francis Wedin.

Vulcan is planning on doing more than just providing lithium from its geothermal brine sourced from Germany’s Upper Rhine Valley. It will use the hot liquid to power its operation and produce zero-carbon lithium. For Vulcan it means free power as well as a free pass from CBAM (the carbon border adjustment mechanism) which will ensure producers pay for their carbon footprint.

“Because the geothermal pays for itself,we should be one of the lowest operating cost lithium operations out there,” says Wedin.

For Galaxy’s Hay,who has been in the minerals sector for close to three decades,it adds up to an unprecedented boom ahead.

“If you think of the lithium industry today,it needs to double every two or three years for the next decade. The growth is just unprecedented for a mineral.”

According to investment bank Cannacord Genuity,the EU alone is planning to build 700 GWh (1,000 billion Watt hours) of battery manufacturing capacity by 2030. As a general rule of thumb,every KWh of battery capacity produced requires a kilo of lithium.

Analysts agree there is a significant shortfall in supply ahead.

Macquarie Equities research this month said e-vehicle demand has transformed the outlook for the lithium market and upgraded its price forecasts between now and 2025 by 30 per cent to 100 per cent.

“We expect limitations on the likely supply response to see the market shift to a deficit in 2022,with significant shortages emerging from 2025.”