ASX Lithium Stocks – Best ASX Lithium Stocks – How to Trade

List of the top 10 lithium stocks to watch in Australia for the coming year, along with a quick analysis of ASX lithium stocks’ benefits and downsides. (ASX Lithium Stocks – Best ASX Lithium Stocks – How to Trade – ASX Lithium Stocks 2022)

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ASX Lithium Stocks : What you need to know

A silvery-white alkali metal with unique characteristics, lithium is especially helpful in creating lithium-ion batteries, which are used to power electric vehicles.

Since lithium is the least dense metal and solid element, it is quite improbable that alternatives like nickel would replace it in contemporary EVs. Although nickel has been employed in the past, its energy density is 40% lower, hence more of the metal is needed to make an EV battery.

However, lithium’s intrinsic volatility is a chemical drawback. Due to its high reactivity, lithium must be kept in a vacuum or inert environment, such oil. This increases the cost of production, delivery, and storage.

Lithium mining is likely to become ever more profitable in the long run as the electric vehicle revolution picks up steam, either as a result of oil becoming more and more expensive and scarce, or due to environmental concerns.

Of course, it also raises serious environmental issues of its own, which the sector is attempting to address.

Best 10 ASX Lithium Stocks to watch

Here are 10 Best ASX Lithium Stocks

(1) Core Lithium (ASX: CXO)

The Finniss Project in Australia’s Northern Territory is one of Core Lithium’s most capital-effective spodumene lithium projects. According to the prospector’s comprehensive feasibility assessment, the mine has a 10-year mine life and 173,000 tpa of lithium concentrate.

In the midst of a very high lithium pricing and high operating margin scenario, managing director Stephen Biggins’ primary objective is to produce first production of high-quality lithium concentrate from the Finniss Project this year.

The mine offers “probably the greatest supporting infrastructure and logistical chain to Asia of any Australian lithium project,” which is a significant advantage. The nearest port to Asia is Darwin Port, which is approximately 88 kilometres away.

(2) Pilbara Minerals (ASX: PLS)

Pilbara Minerals is in a good position to become a low-cost, long-term sustainable lithium producer and is “ready for the global energy shift.” As the “top ASX-listed pure-play lithium business, controlling 100% of the biggest, independent hard-rock lithium enterprise in the world,” it defines itself.

Spodumene and tantalite concentrate are produced from its Pilgangoora mine in the Pilbara area, which also has Ganfeng Lithium and General Lithium as partners.

Its long-term goal, supported by rising demand for sustainable energy technology, calls for it to become a “integrated lithium raw materials and chemicals provider in the years to come” in an effort to become a significant participant in the lithium supply chain.

(3) Sayona Mining (ASX: SYA)

A new producer of lithium, Sayona Mining has properties in Western Australia and Quebec, Canada. After purchasing North American Lithium, it has a strategic alliance with Piedmont Lithium in Quebec.

Additionally, it intends to combine the neighbouring Authier, Tansim, and Moblan projects with its 60% ownership of those last two in order to become a global centre.

According to the miner, “downstream processing in Quebec is committed to supplying the quickly expanding North American battery and EV market.” Additionally, it has a sizable portfolio of tenements in Western Australia for lithium and gold.

(4) Piedmont Lithium (ASX: PLL)

In the United States, Piedmont Lithium wants to “build a world-class integrated lithium enterprise.” It holds stakes in the “cradle of the lithium business,” the Carolina Tin Spodumene Belt in North Carolina. The miner is perfectly positioned to integrate itself into the US electric car supply chain and might emerge as one of the most affordable manufacturers of lithium hydroxide.

(5) Ioneer (ASX: INR)

Ioneer is anticipated to be the first brand-new production of lithium chemicals in the US in more than 60 years. The only known lithium-boron deposit in North America and one of only two in the world is the Rhyolite Ridge Lithium-Boron Project in Nevada, which is 100% owned by the miner.

It verified the location as a top-tier project with a globally important deposit in its 2020 feasibility assessment, positioning it to become a significant lithium supplier for decades.

It has a contract in place to provide NexTech batteries from the mine, and the US Department of Energy has encouraged it to start the due diligence process for a significant loan programme.

(6) Mineral Resources (ASX: MIN)

Although Mineral Resources has a burgeoning portfolio of world-class operations spanning several commodities, its primary business is the extraction of iron ore and lithium in Western Australia and the Northern Territory.

Important locations include Wodgina Lithium, which is predicted to have a 30-year mining life and is the world’s biggest hard-rock lithium deposit. Despite a production halt, mining is expected to restart in Q3 as it manages the project in collaboration with US juggernaut Albemarle. In addition, it and Ganfeng Lithium jointly control 50% of the Mount Marion lithium project.

Risk-averse investors should choose MIN because of its diversification into the iron ore market and collaborations with major international companies.

(7) Liontown Resources (ASX: LTR)

“Find, develop, and provide battery materials required by the rapidly expanding Electric Vehicle and Energy Storage sectors,” is the stated goal of Liontown Resources.

In Western Australia, it has control over two lithium resources, and it is currently enlarging its portfolio through further exploration, joint ventures, and acquisitions. The Kathleen Valley project, one of the biggest and highest-grade hard rock lithium deposits in the world, serves as its cornerstone.

With a mine life of 23 years, the project is anticipated to provide 500,000 tonnes of 6% lithium oxide concentrate annually when production begins in 2024. With Buldania, its second project, there are more than 15 million tonnes of lithium oxide.

(8) Allkem (ASX: AKE)

Last year, Orocobre and Galaxy Resources, two lithium goliaths, merged to become Allkem. It currently has worldwide authority over a wide range of premium lithium compounds. With its headquarters in Buenos Aires, it manages lithium projects in Argentina, Australia, and Japan. Development efforts are already under way to prepare for the enormous market expansion anticipated.

Toyota, the provincial government of Jujuy, and Prime Planet Energy & Solutions are all partners in the business. Additionally, it intends to mine 10% of the world’s lithium during the following ten years, tripling production by 2026.

(9) Lake Resources (ASX: LKE)

In order to produce lithium carbonate of the highest possible purity for use in batteries, Lake Resources, a lithium producer, employs its own clean extraction technique. In contrast to conventional brine evaporation or hard rock mining, its technology partner Lilac Solutions has developed a “benign water treatment” that returns all water (brine) to the source without altering its composition. The Bill Gates-run Breakthrough Energy Fund is a supporter of Lilac.

In a favourable location in the lithium triangle, where 40% of the world’s lithium is produced at the lowest cost, LKE’s flagship Kachi project spans 2,200 square kilometres alongside three smaller lithium brine projects in Argentina.

(10) AVZ Minerals (ASX: AVZ)

One of the biggest lithium-rich LCT pegmatite deposits in the world, the Manono project in the Democratic Republic of the Congo is the only focus of AVZ Minerals. The miner’s goal is to move its 75% stake of the project up the value curve by utilising its DRC, financial, and project development capabilities.

It is, however, up against legal opposition. The largest gold miner in the nation, Chinese Zijin Mining, is asserting a 15% stake in the project, which AVZ has dubbed “spurious and inconsequential.” Despite the fact that this problem has been ongoing for four months, AVZ is “confident of a favourable resolution.”

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How to Trade or Invest in ASX Lithium Stocks

1.) Learn more about ASX Lithium Stocks
2.) Find out how to trade or invest in ASX Lithium Stocks
3.) Open an account
4.) Place your Trade

You have two options for opening a position in ASX lithium stocks: share trading or trading in derivatives. Trading shares entails acquiring the stock outright. Contrarily, trading in derivatives, such as CFDs, enables you to make predictions about the price of a company’s shares without actually purchasing them.

For a complete breakdown of the benefits and drawbacks of each strategy, please click here.

ASX Lithium Stocks: Further Important Information

Nickel-based batteries are currently the best replacement for lithium batteries. However, lithium batteries charge more quickly and don’t suffer from memory problems, thus repeated charging cycles don’t reduce their maximum charging capacity. Furthermore, nickel batteries typically need a cooling system since they heat up more quickly.

The cost of an EV is impacted by the fact that manufacturing lithium batteries is around 50% more expensive due to lithium’s instability. Additionally, lithium batteries typically need to be replaced sooner than nickel ones. Additionally, nickel can already be recycled profitably due to its greater utilisation.

Fundamentally, though, lithium is most likely to be the metal driving the EV revolution unless there is a significant advance in technology.

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To put the potential of the EV revolution into perspective, consider that market leader Tesla’s market cap, despite its volatility, is now hovering around $900 billion, which is about equal to the total market capitalization of all other automakers worldwide. And while the OICA forecasts that 57 million passenger cars were manufactured worldwide, it only produced fewer than one million vehicles in 2021.

Elon Musk, the CEO, has in the past compared mine for lithium to “mining money,” and he has intimated that he intends to launch his own lithium firm to take some control of the supply chain.

Lithium prices are approaching record highs due to the worldwide scarcity, which might slow the metal’s up to this point fast rise. In China, lithium carbonate has reached a record price of $71,315 per tonne, which is more than 1,150% higher from pandemic lows and has tripled in one year. (ASX Lithium Stocks – Best ASX Lithium Stocks – How to Trade)

In 2021, the IEA estimates that 6.6 million electric vehicles were produced, a more than two-fold increase. Analysts predict that by 2030, the globe will have approved legislation outlawing the production and sale of internal combustion engines (ICEs), including in the EU, UK, USA, and even China.

China now has control over 80% of battery cell production and continues to dominate the lithium refining business. The conflict in Ukraine and the pandemic lockdown in Shanghai have compelled businesses all across the world to assess the resilience of their supply networks and maybe pay extra for increased supply security.

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The Cold War-era 1950 Defense Production Act’s emergency presidential powers have already been used by US President Biden. To lessen our dependency on China and other nations for the minerals and resources that will power our clean energy future, he wants to enhance production of important metals like lithium.

The newly approved Inflation Reduction Act, which promises $370 billion in investments into clean energy, is likely to spur more demand. It extends the $7,500 consumer income tax credit for the purchase of a new electric vehicle and does away with the per-manufacturer cap on these tax credits.

The relative abundance of lithium in the planet is one cause for concern. However, there are two factors that limit the supply. The first is that exploration efforts are frequently expensive and have a high failure rate. Lithium needs to be concentrated sufficiently to be profitable to mine.

The second is that it takes up to 10 years for new mines to start extracting lithium, making it a challenging and time-consuming process. While businesses all over the world attempt to establish their own mining and processing enterprises. Lithium demand is probably going to outpace supply growth. According to projections from the International Energy Agency (IEA), demand for lithium would increase by 900% by 2030 and by 4,000% by 2040.

In fact, according to R.J. Scaringe, CEO of Rivian, “all cell manufacturing throughout the world combined equals little under 10% of what we will require in 10 years… Between 90% and 95% of the supply chain is nonexistent.

Naturally, the price of lithium is as erratic as the metal itself. For instance, China’s “zero-covid” approach has recently had an impact, causing some regions of the nation to stop processing lithium while EV manufacturers like Tesla have occasionally had to cease factory output.

Finally, there are several options to invest in lithium equities listed on the ASX. Lithium is extracted from three different types of deposits: brine, pegmatite lithium, and sedimentary, with Australia producing the majority of the world’s sedimentary lithium. Many lithium investors like making investments in all three categories.

More generally, to acquire exposure to lithium while lowering overall risk, many investors decide to purchase shares in a diversified miner like Rio Tinto. It goes without saying that this has a negative side, since diversified miners are unlikely to fully profit from any future price increases. Additionally, the majority of the stocks on this “top 10” list are large-cap miners with the potential for future share price increases due to exclusive project rights. But while being riskier, small-cap lithium stocks might be more profitable.

And for the risk-taking investor, pure-play ASX lithium stocks offer fascinating long-term potential.

Conclusion

In this post, we’ve made an effort to provide you with accurate information regarding the ASX Lithium Stocks – Best ASX Lithium Stocks – How to Trade. Making a wise choice about ASX Lithium Stocks will be aided by reading the aforementioned information. If you have any questions, please post them in the comment section and we’ll do our best to address them by offering a more effective answer.

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