Most large lithium reserves are in Chile, and the prolific “Lithium Triangle” spans Chile, Argentina and Bolivia. Australia was once again the world’s largest lithium producer in 2023, followed by Chile and China. Compared to lead-acid batteries, which is an older technology, lithium-ion batteries offer several advantages. Lithium-ion batteries typically have up to 6x higher energy density, nearly 2x longer charge and perform better in cold weather environments,5 making them ideal energy storage solutions. It is building lithium extraction sites in Argentina with partner Ganfeng Lithium.
Preparation for Investing in Lithium & Lithium Mining
Lithium belongs to a family of metals known as alkali, which are highly flammable and must be handled and stored with care. On the periodic table, lithium’s symbol is “Li,” and it has the least density of all elemental metals. In the US, the Biden administration’s Inflation Reduction Act, which was signed into law in mid-2022, is investing US$369 billion in climate action and energy, including EVs and EV infrastructure. For investors looking for exposure to the price of lithium, Albemarle looks like the safest bet, with Lithium Americas an option for risk-seeking speculative investors. Automakers and battery manufacturers accelerated investment in EVs during the pandemic but then pulled back as relatively high interest rates constrained auto sales, including EVs. The resulting oversupply of lithium caused the lithium price to fall through 2023 and into 2024.
- In the U.S., the 2021 Infrastructure Investment and Jobs Act, a significant step towards a greener future, allocated $5 billion in federal funding for EV charging stations.
- Investing in lithium stocks is the same as investing in any other kind of stock.
- Supportive government policies, growing consumer demand and constrained supply of the metal could help bolster companies involved with the lithium supply chain.
- This information should not be relied upon as a primary basis for an investment decision.
- As you might assume, this process taxes the environment, so ESG funds exclude many lithium mining company stocks.
Is it worth investing in lithium stocks?
Our partners cannot pay us to guarantee favorable reviews of their products or services. Of course, smaller lithium stocks are worth watching too — to find out which ones are currently thriving, check out our top lithium stocks article. You can also check out our articles on the biggest Australian stocks, top performing Australian lithium stocks, and top Canadian lithium 45+ free coding websites for beginners to learn programming in 2022 stocks. There are also distinct prices for lithium on markets in different regions, meaning lithium hydroxide in China will be priced slightly different than in Europe. These lithium products can also be used for technical applications in a pinch. The world’s largest hard-rock mine is the Greenbushes mine in Australia, and the bulk of the world’s lithium brine production comes from salars in Chile and Argentina.
Trading options based on lithium company stocks is speculative — only seasoned traders should tackle it. what is slp crypto Learning how to invest in lithium could be a central investment theme for 2023, and it’s a good idea to know how production occurs and where you can use it. In this article, you’ll learn how to use lithium in various industries, which companies mine and produce and how to add exposure to this vital mineral to your portfolio (including how to buy lithium stock). However, the list of the world’s top lithium-mining companies has changed in recent years. The companies mentioned above still produce the majority of the world’s lithium, but China accounts for a large chunk of output as well.
When investing in a resource like lithium, it is crucial to understand the relationship between supply and demand. In general, high demand and a limited supply will increase your investment in value. When you buy an option, you acquire the right to purchase (or sell) a specific security at a previously agreed-upon price. Call options give investors the right to buy, while put options give them the right to sell.
Marketplace
Its portfolio includes iron ore mining and logistics services in addition to robust lithium output. This gap between the supply and demand of lithium is called the “Great Divide,” and you can expect it to make the value of lithium-producing companies go higher and higher until that gap closes. On the demand side, it is worth understanding which industries will drive the demand for lithium production. As you know, the lithium industry has such an optimistic projection because of the expected growth of the battery industry, especially as it relates to electric vehicles. While it is unlikely that a new industry will suddenly take over EVs, new or young industries may become giant markets. Always perform ample due diligence when investing in an unfamiliar field, industry or commodity.
For instance, Chile, the world’s second-largest lithium-producing country, has plans to nationalize its lithium industry. Similarly, a major lithium mining project in Serbia was halted in 2022 due to environmental protests. However, discussions are ongoing in 2024, and there is a possibility that Europe may soon have its first major lithium mine. These challenges, while significant, also highlight the industry’s resilience and adaptability. For example, the price of lithium carbonate (used in batteries) rocketed almost sevenfold from the summer of 2021 to the autumn of 2022, only to fall back down to 2021 levels in the summer of 2024.
Though modest in size, Pilbara is a bit more difficult to research given that it trades over the counter and lacks analyst coverage in the United States. Nevertheless, average working at etx capital daily trading volume is better than others on this list, with more than 125,000 shares traded daily. Its Bald Hill lithium mine is particularly noteworthy, given its annual production capacity of roughly 150,000 tons. Additionally, the company invested $260 million in the property to seize 100% ownership of the site at the end of last year. The Impact Investor is a blog focused on helping retail investors find ESG, socially responsible, and impact investment opportunities through our expert insights, tips, and blog posts.