Best Lithium Stocks To Buy

As environmentally-conscious consumers demand increasingly cleaner energy, the popularity of electric vehicles will soar in response.
Indeed, while this shift towards a greener future will undoubtedly spawn a raft of ecologically beneficial improvements, it will also be driven by significant advances in lithium-ion batteries.
As a result, the lucrative opportunities offered by lithium-related stocks will make them a desirable proposition in the coming years.
So, in this guide, we will provide insights into the broader lithium industry, and examine the positive aspects of investing in lithium shares today.

Atlantic Lithium Limited (ALL)

Atlantic Lithium is an exploration company engaged in developing lithium projects and licenses in Côte d’Ivoire and Ghana, with the ultimate goal of bringing them into production.

The corporation’s number one opportunity, the Ewoyaa Project, is an exciting lithium spodumene pegmatite discovery in Ghana that’s on track to become the nation’s first lithium mine.

According to the pre-feasibility study, the project has indicated a potential life-of-mine revenue haul exceeding $4.84 billion. The process flowsheet for producing spodumene concentrate is also relatively straightforward, using only gravity to separate and concentrate the lithium from the heavier mineral mix.

Furthermore, ALL has shown it can find high-value deposits while applying modern and eco-friendly exploration practices to develop and de-risk its assets for commercialization. The company boasts an extensive development portfolio covering 1,334km² across Ghana and Côte d’Ivoire, providing substantial upside to shareholders.

The Ewoyaa Lithium Project – the firm’s flagship asset – is funded under an agreement with Piedmont Lithium and is set to become Ghana’s inaugural lithium mine. The company is moving the project forward by conducting necessary studies toward production under this agreement.

Albemarle Corporation (ALB)

Albermarle Corporation is a top producer and developer of highly engineered specialty chemicals tailored to meet the specific needs of diverse end markets such as energy storage, consumer electronics, pharmaceuticals, and petroleum refining.

With its commercial and geographical diversity, innovative capabilities, access to quality resources, and low-cost manufacturing base, Albermarle aims to maintain its leading position in the specialty chemicals industry segments where it already operates.

The company is divided into three reportable segments – Lithium, Bromine, and Catalysts – each with dedicated teams of business strategy personnel, engineers, researchers, and sales personnel.

Albermarle’s Lithium business has one of the industry’s most extensive portfolios of lithium derivatives. It produces a wide range of basic compounds, such as lithium carbonate, hydroxide, and chloride, as well as value-added lithium specialties and reagents, including butyllithium and lithium aluminum hydride.

Albermarle’s products have broad applications in various markets. For instance, lithium carbonate is used in Li-ion batteries, cement, and glass ceramics, while special metals are employed in scintillation applications, such as nuclear cameras and X-ray security, not to mention airbag ignition and industrial catalysts.

Besides producing and developing lithium compounds, Albermarle offers technical services for handling and utilizing reactive lithium products. The company also provides recycling services for unwanted byproducts arising from the creation of lithium metal and other reagents.

QuantumScape Corporation (QS)

As a company developing next-generation technology for electric vehicles and other applications, QuantumScape reckons it’s at the beginning of a once-in-a-lifetime shift from internal combustion engines to clean, non-fossil fuel-enabled powertrains.

In fact, after 30 years of gradual improvements in conventional lithium-ion batteries, the benefits of EVs have been demonstrated principally in the premium passenger car market.

However, there are limitations preventing the widespread adoption of this technology, and the industry needs to radically rethink the science to make mass-market vehicles competitive with their hydrocarbon alternatives.

To address this challenge, QuantumScape has spent more than a decade developing its own proprietary solid-state battery. This lithium-metal technology is designed to offer greater energy density, faster charging, and enhanced safety when compared to today’s conventional lithium-ion batteries.

In fact, no other lithium-metal battery has demonstrated the capability of achieving automotive power rates with acceptable battery life at room temperature and at modest pressure levels.

Since 2012, QuantumScape has established a robust partnership with Volkswagen and several of its affiliates. Volkswagen is one of the world’s largest car companies and aims to be a leader in electric vehicles.

Indeed, Volkswagen has invested more than $300 million in QuantumScape over the past decade and formed a 50-50 joint venture to facilitate the mass production of its solid-state batteries. As partners in the joint venture, QuantumScape anticipates sharing revenues and profits equally with Volkswagen.

Although Volkswagen is expected to be the first to implement QuantumScape’s battery technology in commercial vehicles, the company will also work closely with other original equipment manufacturers, ranging from the top ten manufacturers by global revenue to high-end performance and luxury automakers as well.

QuantumScape acknowledges that solid-state batteries are applicable not only in the automotive electric vehicle sector – which requires stringent battery specifications – but also in other large and expanding markets like stationary storage and consumer electronics.

Furthermore, in 2021, QuantumScape announced plans to establish its manufacturing capacity by constructing a pre-pilot production line in California named “QS-0.” QS-0 is designed to feature a highly automated continuous flow line with enough capacity and process maturity to qualify for automotive standards and, if successful, produce C-sample battery cells for third-party sale as its first commercial product.

Livent Corporation (LTHM)

Livent is a well-established lithium company specializing in producing high-quality lithium compounds.

The firm’s core products – which include battery-grade lithium hydroxide, lithium metal, and butyllithium – are essential components for a wide range of high-performance applications. Indeed, its primary focus is to provide lithium compounds to the expanding electric vehicle and battery markets while maintaining its position as a leading producer of butyllithium and high-purity lithium metal.

Moreover, LTHM has a strong global presence and a history of long-standing customer relationships. With the growing trends of vehicle electrification and renewable energy adoption, the company believes it’s well-positioned to take advantage of future market opportunities.

As a business that produces lithium compounds for applications with constantly changing performance requirements, Livent expects the demand for its products to rise with the acceleration of transportation electrification and the next generation of battery-related technologies.

In addition to its core products, LTHM also supplies butyllithium for use in polymers and pharmaceuticals, as well as specialty lithium compounds for non-rechargeable batteries and aerospace lightweight materials. Livent has gained a competitive edge by consistently producing and delivering high-performance lithium compounds for these specialized applications.

CleanTech Lithium (CTL)

CleanTech Lithium is a development and exploration outfit focused on furthering Chile’s next generation of eco-friendly lithium projects. The company aims to generate significant quantities of high-quality lithium – with minimal carbon emissions and environmental impact – and offer the European electric vehicle market the most sustainable lithium solution yet.

The industry faces a significant challenge in developing sustainable lithium extraction methods. There are two primary sources of lithium – salt lake brines and hard rock mines – both of which can have significant environmental impacts. Conventional production of lithium from brines involves using large evaporation ponds that deplete aquifers in salt lake basins, affecting indigenous and local communities within these basins. Therefore, the Chilean government is keen on encouraging new production methods – such as the Direct Lithium Extraction (DLE) process – to address these environmental concerns.

Hard rock lithium mines also have a direct environmental impact due to large-scale open-cast mining operations and energy-intensive processing, which results in high CO2 emissions. As a result, global car manufacturers and battery supply chains are increasingly focused on sourcing lithium from producers with sustainably low environmental impact extraction methods.

Due to the environmental impact of traditional lithium production methods, CTL is taking a new approach to extraction from salars in Chile.

The company plans to utilize the DLE techniques to reduce the environmental impact of extraction while also leveraging renewable energy for process power to reduce CO2 emissions.

By pumping brine to a processing unit where only lithium is extracted using a resin or adsorption material, CleanTech can reinject the spent brine into the basin aquifers, thus avoiding the significant environmental consequences of water depletion caused by the traditional evaporation pond process used by other lithium producers.

Indeed, the adoption of the DLE process represents a significant improvement in the sustainability of lithium extraction.

Given its environmentally superior business practices, CTL doesn’t just offer investors a viable opportunity to boost their ESG credentials. It also positions the company ahead of its rivals if, or when, the green agenda imposes more restrictive conditions on those operating in the space.

Sociedad Química (SQM)

Sociedad Química is possibly the largest manufacturer of potassium nitrate and iodine globally, and is one of the biggest lithium producers worldwide. It makes tailored plant nutrients, iodine and lithium byproducts, potassium sulfate, and other industrial chemicals.

In fact, the company’s goods are marketed through its worldwide distribution network, with 92% of its 2021 revenues originating from countries beyond Chile.

SQM mines caliche ore and is involved in the processing of brine deposits. The caliche ore in the north of Chile holds the only known nitrate and iodine deposits worldwide and is the most significant naturally occurring nitrate source to be commercially mined.

Furthermore, the brine deposits in the Salar de Atacama – a salt-coated depression in the Atacama Desert of northern Chile – hold high concentrations of lithium, potassium, and substantial amounts of sulfate and boron.

Sociedad Química also produces a broad array of nitrate-based goods used for specialized plant nutrients and industrial applications, as well as iodine and iodine byproducts from its caliche ore deposits.

At Salar de Atacama, the company extracts brines abundant in potassium, lithium, and boron to make potassium chloride, potassium sulfate, lithium solutions, and bischofite (magnesium chloride). It also creates lithium carbonate and hydroxide at a plant near Antofagasta, Chile, utilizing the solutions brought from Salar de Atacama.

Moreover, SQM categorizes its products into six groups: specialty plant nutrients, iodine, lithium and its byproducts, potassium chloride and potassium sulfate, industrial chemicals, and other commodity fertilizers.

Specialty plant nutrients are top-grade fertilizers that enable farmers to enhance crop yields and quality for specific crops. Its primary specialty fertilizer is potassium nitrate, primarily used in high-value crops.

Potassium chloride is a commodity fertilizer that the enterprise manufactures and trades globally, while potassium sulfate is a specialty fertilizer commonly utilized in crops such as vegetables, fruits, and industrial crops.

On the other hand, industrial chemicals have various applications in chemical processes like glass production, explosives, and ceramics. Industrial nitrates are also utilized for energy storage in concentrated solar power plants.

Significantly, lithium and its byproducts are primarily utilized in batteries, greases, and frits for ceramic production. More importantly, perhaps, SQM has a roughly 20% share of the lithium and derivatives market worldwide.

To optimize its lithium activities, Sociedad Química plans to strategically allocate the sales of its lithium carbonate and lithium hydroxide while stimulating demand growth and promoting new lithium uses.

On top of that, SQM will expand its asset base by acquiring new projects either alone or with joint venture partners, and selectively pursue opportunities in the byproduct industry by developing new lithium compounds.

Best Lithium Stocks to Buy: Conclusion

As you can see, Lithium is a crucial component in many commonplace and highly-engineered materials.
In fact, its relevance to the modern world will only become more pointed as time goes by – meaning that the earlier you gain exposure to the lithium space, the greater the potential for reward.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.