We analyze 10 ASX-listed business with direct exposure to lithium properties.
The 2018 battery boom accompanied the dizzying run up in the share prices of a variety of ASX-listed lithium stocks.
That boom-- as with numerous others in the history of monetary markets, was met a bust in 2019-- as oversupply concerns saw lithium costs collapse, instilling doubts in a market that rested its hopes on an electric lorry transformation that has yet to truly get here.
To even more demonstrate the effect of those price falls, as reported by Bloomberg:
Lithium-ion battery pack rates, which were above $1,100 per kilowatt-hour in 2010, have fallen 89% in genuine terms to $137/kWh in 2020.
Things aren't anticipated to enhance any time soon either, with forecasts from BloombergNEF recommending that rates will be up to an average of $100/kWh by 2023.
In spite of that, financiers have turned bullish on numerous ASX-listed lithium stocks in the last 6 months, with the likes of Pilbara Minerals acquiring over 250%, Galaxy Resources has actually surged 191%, and Mineral Resources has actually included some 55%.
Looking even more into the principles of this market, recent research study from BloombergNEF forecast that electric automobile (EV) sales are set to strike to 8.5 million by 2025, while EV sales, represented as a percentage of all brand-new car sales, is set to strike 10% by 2025.
Importantly, although lithium-ion has numerous uses outside the production of EVs-- including the production of batteries for smartphones, laptop computers and other digital gadgets, armour plating and glasses in addition to particular pharmaceuticals-- the consensus is that its long-lasting viability will be 'directionally proportional' to the adoption of electric lorries, according to S&P Global Platts.
Other things to consider
Lithium is mined from 3 kinds of deposits: salt water deposits and Pegmatite lithium and sedimentary (hard rock) deposits, with Australia accounting for the majority of lithium acid rock mines on a global scale.
This, according to S&P Global Platts, puts Australian lithium miners and producers in an interesting position, with it being kept in mind that 'This has actually seen larger argument that Australian acid rock mining could discover itself in the function of swing production, with jobs coming on and offline as the cost determines.'
Having taken a look at some of the crucial problems surrounding the lithium market, below we look at 10 high profile lithium stocks, or companies with exposure to lithium properties-- listed on the Australian Stock Exchange.
Mineral Resources (MIN)
Mineral Resources is a leading Perth-based mining companies, with assets spread out throughout iron ore and lithium.
Owing to a run-up in iron ore prices, the miner published excellent FY21 outcomes, revealing earnings of $3.7 billion (+76%) and underlying revenues (NPAT) of $1.1 billion (+230%). Indeed, Mineral's spodumene operations continued to drag on efficiency in financial 2021, delivering an EBITDA loss of $5 million. In FY21, the business exported 17,274,000 damp metric tonnes of iron ore; and 485,000 dry metric tonnes of spodumene.
With a market capitalisation of $9.86 billion, Mineral Resources is one of the biggest business on this list. Year-to-date the stock has traded up 35%, last sitting around the $52.28 per share mark.
Pilbara Minerals (PLS)
Pilbara Minerals is a lithium-tantalum producer, with the ambitious aim of becoming 'one of the greatest and lower expense lithium manufacturers' worldwide. The company's primary job, which it owns outright, is the Pilgangoor Lithium-Tantulum Project based out of Western Australia. The company describes this task as 'the largest independent hard-rock lithium operation on the planet.'.
In September 2021, the business upgraded the size of the Pilgangoor Mineral Resource, raising the indicated and inferred resource to 309 million tonnes, indicating a significant 39% increase in overall resource tonnage.
Financiers are currently optimistic about Pilbara's potential-- with the business standing as one of the largest lithium business in Australia, touting a market capitalisation of $6.46 billion. The stock last traded at $2.20 per share and has acquired 152% considering that January.
Orocobre (ORE)
A commercial chemicals and minerals company, Orocobre holds a diversified portfolio of lithium, potash and boron properties throughout northern Argentina.
In August 2021, the previously announced merger between Orocobre and Galaxy Resources was finished, creating the world's fifth biggest lithium chemicals business at the same time. The business intends to relabel the merged group to Allkem, pending shareholder approval.
Discussing that merger, Orocobre's Managing Director and Chief Executive Officer, Perez de Solay:.
'With the merger we will go even more in our commitment to providing the lithium chemicals that the world significantly requires to reduce climate change and carbon emissions.'.
In 2021, Orocobre produced 12,611 tonnes of lithium carbonate, representing a 6% boost year-on-year; while publishing a loss of US$ 89.5 million.
Wesfarmers (WES)
Iconic Australian corporation Wesfarmers -- through its $776 million, 2019 acquisition of Kidman Resources-- has significant exposure to lithium possessions, mostly through Kidman's 50% stake in the Mt Holland lithium task.
The Mt Holland task-- comprised of an open pit lithium mine and processing plant-- in late 2018 was estimated to have a projected yearly average production of 45,254 tonnes of LiOH. The Earl Grey deposit at the Holland website was estimated to have a first ore reserve of 94.2 million tonnes.
At the time the acquisition, Wesfarmers' Chief Executive Officer, Rob Scott, stated:.
'The acquisition and our planned future financial investment is an appealing chance to take part in the development of a large-scale, long-life and high grade lithium hydroxide project in Western Australia in partnership with a worldwide leader in the lithium market.'.
Piedmont Lithium (PLL)
With operations focused in the US, ASX-listed Piedmont Lithium is presently in the process of establishing its North Carolina lithium task, with the ultimate objective of producing low cost lithium hydroxide for the fast-growing electric automobile market.
According to management, this North Carolina area, referred to as the 'cradle of the lithium industry', bears strategic significance, as it is preferably situated to 'serve the fast-growing United States electric automobile supply chain.'.
Financiers have paid attention to Piedmont over the last 9 months, with the stock up 103% in that period, last trading at $0.75 per share and giving the company an implied market capitalisation of $1.17 billion.
Vulcan Energy Resources (VUL)
ASX-listed Vulcan Energy Resources has an enthusiastic aim: become the world's first no carbon lithium producer. Like Piedmont, Vulcan is concentrated on the electrical car market. The crucial distinction? Vulcan's lithium project is based in Europe, a region which, the company happily notes, currently 'offers more electric cars than China.'.
Vulcan likewise touts a comparable supply chain advantage to Piedmont: distance to key players in the electrical lorry industry, such as VW and Tesla. This proximity, says management is a key benefit, both in terms of 'cost advantage along with carbon advantage'.
Year-to-date the Vulcan Energy share cost has skyrocketed, at the time of writing it was up 475%, with the stock last trading at $15.93 per share.
Liontown Resources (LTR)
Liontown Resources boasts what it describes as a world-class mineral deposit. Current studies recommend the business's crucial lithium job, based in Western Australia, has a mineral resource price quote of 156Mt at a grade of 1.4% Li2O and 130ppm Ta2O5.
The resources company had 2 other core jobs: consisting of a gold nickle project, and another Western Australian lithium project.
Like lots of others on this list, Liontown Resources has seen its share cost run hard in 2021, getting 209% since January, to last trade at $1.30 per share. At those levels, the company has a market capitalisation of $2.48 billion.
Ioneer (INR)
Founded in 2001, Ioneer is in the procedure of establishing its Nevada-based lithium job. This task, states management, represents a 'substantial foundation for [the company] to end up being an accountable and successful manufacturer of the products necessary for a sustainable future.'.
Taking a look at the specifics of the business's Rhyolite Ridge job, as part of a recent financier presentation, the company said its ore reserve stood at 60 million tonnes, with around half of that reserve defined as 'Proved'. It was also noted that 'Boron grades increased by 26% in the overall Ore Reserve, significantly raising boric acid production.'.
Year-to-date the Ioneer share cost has actually risen 150%, with the stock last trading at $0.70 per share.
AVZ Minerals (AVZ)
AVZ Minerals, trading under the ticker AVZ, the business recently offered an update on its core, DRC-situated lithium project-- the Manono Project.
As part of that update, the business revealed that it had actually bumped up its shareholding in Manono to 75% in addition to gotten 'DPEM approval' from the local government.
'The business is performing its method on all fronts to maximise shareholder worth, increasing its equity share in the Manono Project,' according to the business's Managing Direction, Nigel Ferguson.
Year-to-date the AVZ Minerals share cost has actually gained 47%, last trading at $0.25 per share.
Core Lithium (CXO)
Core Lithium - trading under the ticker CXO - is currently in the process of establishing the Finniss Lithium Project, based in the Northern Territory, Australia. The company's management team has described this task as 'one of Australia's a lot of capital-efficient and lowest-cost' lithium jobs.
Current research studies conducted on the foundation job and framed versus an initial mine life of 10 years, showed that the site might support 'production of a typical 173,000 tpa of premium lithium concentrate at a C1 Opex of US$ 364/t and A$ 89m.' Construction is expected to start at the Finniss website before the close of CY21.
The Core Lithium share price has increased 104% year-to-date, last trading at $0.34 per share, implying a market capitalisation of $537 million.
How to buy or buy lithium stocks on the ASX
You can acquire exposure to ASX-listed lithium stocks or business with direct exposure to lithium-ion in 2 ways: either through share trading or derivatives trading. Share trading implies that you take direct ownership of the stock, meaning you might potentially profit if the share cost boosts in value or if the business chooses to pay a dividend.
By comparison to owning shares outright, derivatives trading-- such as CFD trading-- enables you to hypothesize on the rate movement of a business's shares without really taking ownership of them. CFD trading may show appealing to some financiers for a variety of factors, including the versatility to trade stocks long and short, the ease of which it permits to hedge, as well as the ability to acquire bigger direct exposure to an asset through leverage.
Follow the simple steps listed below to start investing or trading lithium stocks:
Investing in lithium stocks
Develop or visit to your share trading account and go to our trading platform
Search for the business you wish to purchase
Select 'buy' in the deal ticket to open your financial investment position
Select the number of shares you wish to buy
Confirm your purchase and monitor your investment.
Trading lithium shares
Create or visit to your trading account and go to our trading platform
Decide whether CFD trading is right for you
Search for the company you wish to trade
Select your position size and select 'buy'
Validate your trade and monitor your position.
Finest ASX lithium stocks summed up
Traders and investors looking to acquire exposure to this special market ought to:
Australia accounts for the majority of acid rock lithium deposits worldwide.
Electric automobile sales are anticipated to strike 8.5 million by 2025, and make up 10% of all new car sales.
The consensus is that the long-term practicality of will be influenced by the adoption of electric vehicles.
ASX-listed lithium stocks, though trading off the highs tape-recorded in 2018, have traded with incredibly bullish momentum in CY21.
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