The future will be powered by lithium, a metal that is the key ingredient for making lightweight, power-dense batteries used in next-gen technology like electric vehicles, otherwise known as EVs. But as with all emerging technology, the road ahead is fraught with disruption—and due to the frenetic Contact online >>
The future will be powered by lithium, a metal that is the key ingredient for making lightweight, power-dense batteries used in next-gen technology like electric vehicles, otherwise known as EVs. But as with all emerging technology, the road ahead is fraught with disruption—and due to the frenetic race to participate in this market coupled with recent EV adoption headwinds, lithium companies are suffering from a glut of supply and weak sales.
As with so many things, however, past performance is no guarantee of future returns. If the environment firms up for lithium stocks, the companies currently trading at rock-bottom prices could bounce back. Forbes Advisor has identified seven of the best lithium stocks available on the market today. These stocks all have seen volatility across the last year but remain the leading options for investing in this key commodity.
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As lithium prices have taken a step back over the last year, so have shares of Albemarle Corporation stock. That said, ALB remains the largest and perhaps the most prominent option for lithium investors as it boasts the biggest market value of any publicly traded stock in the U.S. with a focus on this battery metal.
It is also worth noting that Albemarle is one of the top holdings in several top lithium funds. For example, it commands a more than 9% allocation in the Global X Lithium and Battery Tech ETF (LIT), which boasts $1.5 billion in assets at present. Therefore, if investors pile into exchange-traded funds, or ETFs, as a way to play lithium, ALB stock will see an outsized benefit from these capital flows.
On the heels of more aggressive production expansions in prior years, Albemarle announced in January it would be cutting back on capital expenditures to as little as $1.6 billion in 2024, down from approximately $2.1 billion last year. Given the current environment, this is a responsible move, but it also proves ALB is investing in the future.
Chile is well-known around the world for its mineral riches. Sociedad Química y Minera de Chile—commonly known as SQM or Soquimich—is at the center of the South American country''s mining industry. It is also one of the largest lithium producers in the world.
The company has recently been a government target because of its scale, with officials posturing last year and saying they would nationalize the lithium industry in Chile. Generally, government ownership is a double-edged sword, as it comes with the increased risk of political meddling. However, SQM has managed to navigate these waters with reasonable success.
Case in point: in December, it managed to tighten its grip on the region''s lithium output by ceding partial control of one of its key lithium sites in exchange for increased permissible production of 300,000 metric tons. There is always a high degree of uncertainty when a government gets involved in private enterprises like SQM. But if the company can continue to navigate this public-sector intervention in the lithium industry, then it may ultimately tighten its grip on production—with a government backstop to boot.
Mid-sized stock Mineral Resources Limited is a global materials company headquartered in Australia. Its portfolio includes iron ore mining and logistics services in addition to robust lithium output. This diversification provides a unique benefit for MALRY when compared with its peers, both because it has a longer history of operation and because it has alternative revenue streams to see it through the current volatility in lithium prices.
Mineral Resources is not standing still, however. 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.
In the United States, Mineral Resources is another stock that is thinly traded via an over-the-counter, or OTC, listing. That means liquidity is much lower for this stock, with an average volume of only about 2,000 shares traded each day, so investors should place their orders with care.
Based in China, Ganfeng Lithium Group operates globally, with mining interests from South America to Africa to Australia. Although it was only founded in the year 2000, the company has rapidly grown to become a leader in lithium production worldwide.
This expansion has been driven by organic growth as well as aggressive acquisitions and joint ventures. For instance, in 2023, Ganfeng entered into a deal with Leo Lithium to invest more than $100 million in a Mali mine. The company also invested $350 million toward a production and R&D facility in China''s Hubei province. These big investments show Ganfeng is looking to the future even amid current oversupply and volatility in the sector.
The company is well-established from a size and operational perspective. However, it is important to note its dual-listed shares are currently available on the Hong Kong Stock Exchange and the Shenzhen Stock Exchange but not on any major U.S. exchange. This means you are trading OTC, with an average daily volume of only a few thousand shares.
One of the younger firms on this list of best lithium stocks, Pilbara was incorporated in 2005 and primarily produces lithium through a wholly-owned project located in a region of Western Australia. That site is billed as the largest independent hard-rock lithium operation in the world, and Pilbara has estimated the mine life at 34 years of output.
Also worth noting is how PILBF ended 2023 with a cash balance of $1.4 billion—a massive war chest that may make it easier for Pilbara to weather short-term volatility and leave it well-capitalized to finance future growth when the dust settles.
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 daily trading volume is better than others on this list, with more than 125,000 shares traded daily.
The "newest" company on this list of the best lithium stocks, Arcadium was formed at the beginning of 2024 through a "merger of equals" between two mid-sized firms, Allkem and Livent. As the company framed it in a press release announcing the deal, the benefits of the merger include vertical integration across various mining processes through chemical manufacturing and other downstream functions.
And while an unproven company does come with risk, ALTM stock also has the benefit of not having a particularly long track record to compare itself against during this admittedly soft spot for lithium stocks.
Based out of Brazil, Sigma Lithium is the smallest stock on this list, with a market value of less than $2 billion and total revenue of about $615 million annually. However, despite its more modest footprint, SGML has proven to be a significant player in the lithium sector.
Recent proof comes from a mammoth deal with commodities giant Glencore PLC (GLNCY), in which Sigma loaded 22,000 tons of lithium onto a single shipment in partnership with this global leader. What''s more, Glencore had prepaid 50% for the shipment—and at a premium price 7.5% above the quoted average at the time.
It is universally true that dynamic industries tied to emerging technologies start with a larger number of players before consolidating into a small group of leaders who can operate at scale. So while Sigma may be comparatively smaller at present, the ability to execute on megadeals with preeminent partners like Glencore prove this is not an also-ran lithium stock that is falling behind.
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