Bradda Head Lithium Limited:Diversified Lithium Deposits to Strengthen US Domestic Supply Chain

Lithium Forecast and Stocks to Buy in 2023

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Lithium Market 2022 Year-End Review

What happened to lithium in 2022? Our lithium market update outlines key developments quarter by quarter.

Pull quotes were provided by Investing News Network clients Argentina Lithium & Energy and Alpha Lithium. This article is not paid-for content.

Lithium prices remained at all-time highs in 2022 as electric vehicle (EV) demand jumped and supply tightness increased.

The key raw material used in batteries took center stage this past year, and from bearish oversupply calls from banks to lithium stocks seeing gains, it was an eventful 12 month period for the sector.

Read on for an overview of the factors that impacted the lithium market in 2022, from the main supply and demand dynamics to how analysts thought the metal performed in each quarter of the year.

Lithium market in Q1: Price rally continues

EV demand has been driving lithium prices higher, and as mentioned, analysts are optimistic about the market going forward. During Q1 of this year, prices increased more than 126 percent year-on-year, according to Benchmark Mineral Intelligence data.

“Following the price rally in the Chinese domestic market in Q4 2021, there was an expectation that lithium prices would continue to climb in early Q1 on the back of reports that the market remained exceptionally tight,” Benchmark Mineral Intelligence Senior Analyst Daisy Jennings-Gray told the Investing News Network (INN).

“However, as per every significant price milestone lithium has hit in the last year, each month brought fresh highs that many didn’t think would be achieved so quickly,” she said at the end of Q1.

Motivated by high lithium prices and the desire to meet the surging demand, companies shared news about ramp-ups, restarts and expansion plans during the first three months of the year. “But the quarter definitely painted a clear picture of the disconnect between lithium supply and downstream demand from the EV industry,” Jennings-Gray added.

With that in mind, all eyes turned to the year’s expected ramp-up and expansion projects.

“A handful of Australian and Chilean ramp-ups remain the biggest risk to our forecast,” CRU Group’s Martin Jackson told INN in Q1. “There is enough incentive for these to exceed expectations and maximize returns.”

Similarly, Benchmark Mineral Intelligence’s Jennings-Gray said the success of these expansion and restart projects would play a part in the reality of how tight the market was by the middle of 2022.

“Furthermore, the effect on the spodumene feedstock bottleneck and the price for which any available spodumene material goes for on the spot market will be a defining factor in showcasing market sentiment,” she said.

Lithium market in Q2: Bearish supply calls put pressure on stocks

During Q2, COVID-19 lockdowns in China, particularly Shanghai, gave rise to an unexpected hit on demand from the EV sector, with a number of vehicle manufacturing plants shutting down over April.

“Given growing concerns over rising COVID-19 cases in China, combined with reports that Chinese regulators were looking to prevent prices from climbing so rapidly, there were some expectations at the beginning of Q2 that lithium prices might not see the same upward climb experienced in Q1, with this expectation coming to reality,” Jennings-Gray said.

Speaking with INN at this year’s Fastmarkets Lithium Supply and Raw Materials conference, William Adams of Fastmarkets said the demand pullback would be temporary. “What we’re seeing is just a pause on the demand side because of the lockdowns in China,” he said. “And I think it’s more that consumer demand has been constrained rather than falling back.”

As lockdown measures eased, Adams was expecting lithium prices to move higher.

“I don’t think we’ve seen the peak in prices yet,” he told INN at the event, which was held in Phoenix, Arizona. “We expect to see that towards the end of this year, or maybe the first quarter next year.”

On the supply side, availability of material from domestic Chinese brineresources ramped up as expected over late Q2 as warmer weather improved seasonal evaporation rates, analyst Daisy Jennings-Gray told INN.

During Q2, investment bank Goldman Sachs (NYSE:GS) released a report that increased investors’ worries over potential excess lithium supply; the bank also predicted a sharp correction in prices by the end of next year.

However, for Benchmark Mineral Intelligence, the lithium market will remain in structural shortage until 2025. “The lithium market will balance over the next few years, but it’s unlikely that an unprecedented ramp-up of marginal, unconventional feedstock will fill the deficit. It is also unlikely that demand will weaken significantly,” analysts at the firm said in June.

Similarly, iLi Markets’ Daniel Jimenez doesn’t think supply will be able to catch up with demand at least until 2026 to 2027, mainly because of the difficulty of bringing greenfield projects into production at full capacity. “Over this period of time, lithium should be the limiting factor in EV sales,” he said. “Even with demand growing very strongly, the investments the industry is making today might yield additional capacity in six to 10 years from now that we are not able to see today.”

Lithium market in Q3: Price momentum continues

In Q3, lithium prices in the Chinese domestic market saw strong upward momentum, Jennings-Gray said.

“(This was) signaled towards the end of Q2, when COVID-19 restrictions were lifted in Shanghai at the start of June,” she explained to INN. “With demand picking up towards the end of the quarter, and ahead of Golden Week holiday, domestic prices sustained upward momentum throughout the quarter, hitting fresh highs in September.”

Despite the macroeconomic headwinds, the Chinese domestic market appeared to be unaffected by the economic downturn, with the EV industry performing well even though other sectors were experiencing weakness.

“Outside of China, there have been murmurs of weakening demand from traditional sectors, particularly in Europe and North America, although this had little downward bearing on pricing as supply remained very tight,” Jennings-Gray said at the end of Q3.

Looking over to supply, production from the brine projects in China’s Qinghai province was anticipated to wane entering the winter months amid cooling temperatures cool and slower evaporation rates.

“At the same time, there is limited additional supply expected to come online or ramp up during the quarter, and with demand expected to continue to grow, it looks as if supply is set to tighten even further,” Jennings-Gray said.

Looking forward to prices, Benchmark Mineral Intelligence was expecting little downside to pricing in Q4 as demand was ready to ramp up; without any extra supply coming to market, availability of material looked set to be even tighter.

Lithium market in Q4: Demand remains bright

Lithium continued to hold on to high levels throughout Q4, even though prices started to slip by the end of the year.

“We expected prices to continue to climb in 2022, but not as much as they ended up doing,” Adams told INN. “That said, having reached a high at 512,500 yuan per tonne in March, we did not think we had seen the high. We expected prices to rise further before dipping towards the end of the year.”

Commenting on lithium demand during a panel at this year’s Benchmark Week, Ashish Patki of Livent (NYSE:LTHM), which operates its lithium business in the Salar del Hombre Muerto in Argentina, said one of the best ways to bring back what’s happening in the supply chain and put it in terms of lithium demand is to look at cathode output.

“China is the center of cathode output … this year’s lithium-iron-phosphate output in China is easily on track to cross 1 million tonnes compared to about 400,000 tonnes last year,” he said. “Nickel-cobalt-manganese 811 in terms of output in China is in the number two position, and what we are seeing is 100 percent growth year-over-year as well.”

Patki’s demand estimate for 2023 is that the industry will need a million tonnes of lithium carbonate equivalent.

“Again, whether there’s supply that will be able to meet that, that’s the big question,” he said. “(Furthermore) many of us in the industry, we tend to understate, underestimate the brand of applications of lithium-ion batteries.”

For the business development director at Livent, if supply cannot catch up, demand will be deferred, not destroyed.

“If there is not not enough supply available of raw materials, it will just carry over into the next year,” he said. “It will just keep ballooning even more than anybody would think.”

For lithium miners trying to develop projects and bring supply on stream, financing continues to be a big hurdle.

“Funding has happened, but it’s not happening still at a rate that anyone needs. Institutional money is still not as aggressive as it should be,” said Simon Moores of Benchmark Mineral Intelligence. “And then, if they get the money to take it to the permitting stage, then permitting is a massive hurdle — it can add 50 percent of the time onto building your mine.”

The US and Canada are both said to be reviewing the permitting process for new mines as they continue to push for more domestic and regional supply of key raw materials, including lithium.

As of December 12, 2022, Benchmark Mineral Intelligence’s lithium index was up 152.4 percent year-to-date, with that number increasing to 182.6 percent on a year-on-year basis.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

Additional information on lithium stock investing — FREE

Lithium Market Forecast: Top Trends That Will Affect Lithium in 2023

Read on to learn what analysts expect for the lithium market in 2023.

Pull quotes were provided by Investing News Network clients Lake Resources and International Lithium. This article is not paid-for content.

Lithium prices soared in 2021 on the back of rising global electric vehicle (EV) sales, and in 2022 the battery metal stayed at historic highs as investors paid more and more attention to developments in the sector.

Here the Investing News Network (INN) looks at lithium’s 2022 performance, as well as what analysts see coming for the market in 2023. Read on to learn their thoughts on supply, demand and prices.

How did lithium perform in 2022?

At the end of 2021, analysts were expecting lithium demand to continue outpacing supply in the year ahead.

Speaking about the lithium market in 2022, Daisy Jennings-Gray, senior analyst at Benchmark Mineral Intelligence, said she anticipated a huge hike in prices through 2022, but the scale at which this happened was unprecedented.

“What was particularly surprising compared to 2021 was the steep climb in feedstock prices, which really indicated the extent of supply tightness in the market,” she explained to INN. “(It also) highlighted that high lithium prices aren’t just reactionary to sentiment, but a reflection of the raw material disconnect.”

In 2022, Williams Adams, head of base and battery metals research at price reporting agency Fastmarkets, was also expecting prices to continue to rise, but not as much as they ended up doing.

“That said, having reached a high at 512,500 yuan per tonne in March, we did not think we had seen the high — we expected prices to rise further before dipping towards the end of the year,” he said. “In the end, prices climbed to 597,500 yuan in mid-November and were last at 567,500 yuan, so they are indeed slipping as 2022 draws to a close.”

When looking at how different lithium products performed, lithium carbonate prices started 2022 at a significant premium to hydroxide, at 70,000 yuan, according to Fastmarkets data. This difference was driven by strong demand from lithium-iron-phosphate (LFP) batteries, which use lithium carbonate.

LFP batteries have been on the rise in China and are used for shorter-range, durable, lower-cost EVs. LFP batteries currently coexist with higher-nickel cathode types, such as nickel-cobalt-manganese (NCM), which can provide longer-range travel and higher energy density for consumers with range anxiety. These cathodes require lithium hydroxide instead of carbonate.

“Demand for NCM was suffering from a combination of stronger demand for LFP in China and as parts shortages constrained EV production in Europe and the US, which affected demand,” Adams said.

In China, carbonate is still at a premium to hydroxide, albeit only around 5,000 yuan.

Outside of China, however, hydroxide prices have been notably higher than carbonate prices on the spot market, according to Benchmark Mineral Intelligence data.

“(This is due to) a combination of a number of factors, including strong demand for high-nickel cathodes in the Japanese and Korean markets, as well as battery-grade hydroxide supply tightness driven by sanctions on Russia, where some of Europe’s lithium refineries are based,” Jennings-Gray said.

Read more about what happened in the lithium market in 2022 quarter by quarter here.

What is the lithium supply and demand forecast for 2023?

Most lithium demand comes from the EV space, which has seen upward momentum in recent years. Global EV sales surpassed the 6 million mark in 2021, and in 2023, Daniel Jimenez of iLi Markets is expecting demand for EVs to grow at similar levels to 2022.

“The question is, will the lithium supply be there? And when you look roughly at the increase of supply in the market next year, where will that be coming from? Well, it will be coming mostly from incumbents,” he said.

Listen to the interview below to learn more about Jimenez’s thoughts on lithium in 2023.

Benchmark Mineral Intelligence expects lithium demand growth of around 40 percent in 2023 versus 2022 — a “notable step up.”

Demand from China is still seen rising the fastest, but growth is set to pick up considerably in the rest of Asia. “Europe and North America will also notice a step up in demand as their downstream battery supply chains begin to develop,” Jennings-Gray said.

As the new year begins, LFP batteries are expected to continue taking market share from NCM, but both battery chemistries are expected to see strong growth, which translates into good news for both lithium carbonate and lithium hydroxide.

“We do not expect such a blow out in the premium in 2023 — we expect both salts to roughly trade at the same price level in 2023,” Fastmarkets’ Adams said.

Benchmark Mineral Intelligence is also expecting the LFP market to remain strong. “But high-nickel cathode producers have also performed well, so it seems likely the two chemicals’ relationship will continue to interchange,” Jennings-Gray said. “Additionally, with direct hydroxide conversion from spodumene allowing for easier production of the chemical, it doesn’t always have to be produced from converting carbonate, removing some of the baked-in premium hydroxide has always held over carbonate.”

Looking over to supply, Benchmark Mineral Intelligence forecasts some growth, but not enough to see the market balance.

“As always, lithium projects are likely to face delays — typically these are technical, but increasingly it has been about finding a knowledgeable labor force for the job,” Jennings-Gray said.

“Other supply risks come in the form of geopolitics and climate change, such as the issues we saw in Sichuan province in 2021 during the heatwave, or in Yichun in December when reports of thallium in the water shut down operations for a couple of days.”

All in all, Benchmark Mineral Intelligence is forecasting that the market will be in deficit, although some additional supply might ease this deficit a little. In contrast, Fastmarkets expects a small supply surplus to develop in 2023.

“We expect a relatively stronger pick-up in the US, demand to recover in Europe as parts shortages ease and as there are long waiting lists for EVs,” Adams said. “But a hard economic recession in Europe or the US could become a headwind — we don’t expect it to, due to the long waiting lists, but that could change.”

Another factor that could dampen demand is subsidy changes in China, Adams added. “While we expect a small surplus next year, we think the surplus will be absorbed by restocking and will only help reduce the overall feeling of tightness,” Adams said.

Fastmarkets’ research team sees 2022 lithium carbonate equivalent (LCE) demand coming in at 698,900 tonnes, with a rise to 884,400 tonnes in 2023. Meanwhile, the firm sees LCE supply rising from 679,400 tonnes in 2022 to 895,900 tonnes in 2023, creating a nominal surplus of 11,500 tonnes.

What’s the outlook for lithium prices in 2023?

Following another strong year, investors and market watchers are wondering what’s ahead for lithium prices.

When asked about lithium in 2023, Fastmarkets’ Adams said he expects prices to start drifting lower in the next 12 months.

“A supply response is already underway, with additional production coming from new capacity, restarts and expansions,” he said. “As this supply reaches the market, allowing for ramp-up issues and time for material to be qualified, we expect the supply tightness to ease, which should mean consumers feel less need to chase prices higher.”

Prices started to soften in the last few weeks of December ahead of Chinese New Year, which comes particularly early in 2023; uncertainty related to COVID-19 is feeding into this sentiment as well.

“However, it’s very typical for lithium prices to correct slightly heading into Q1, which is when downstream demand from the EV sector is weakest,” Jennings-Gray said.

As mentioned, her firm is expecting demand in 2023 to be notably higher than in 2022. “Combined with the fact that feedstock supply is set to remain tight and spodumene offtake prices still have room to rise, based on movements in the chemicals market over early Q4, there’s still plenty of upside potential for lithium carbonate and hydroxide prices in 2023,” the analyst said. “Some legacy contracts take longer to catch up with the spot market as well, so you need to factor that in too.”

It’s important to note that lithium traded at spot prices only reflects a portion of the market — in fact, most lithium is locked up in contracts, which in some cases include fixed pricing.

“Contracts by and large are not necessarily based on that spot price,” Chris Berry of House Mountain Partners said. “What we are seeing is a situation where contracts are indexed, and rather than focused on spot prices or fixed prices, you’re going to see pricing contracts embedded with floating pricing going forward.”

For Berry, these contracts would have floors and ceilings embedded in them to protect both buyer and seller.

“Because at the end of the day, what we’re trying to do is grow this market from a volume perspective sustainably. And putting floors and ceilings in contracts is one way to do that,” he said.

Listen to the interview below to learn more about Berry’s thoughts on battery metals in 2023.

What factors will move the lithium market in 2023?

Speaking about the challenges for junior miners as 2023 begins, Jennings-Gray said that investment remains a challenge.

“However, with the downstream becoming increasingly switched on to the raw material disconnect, this also presents an opportunity for project developers to see new funding coming in directly from cathode, cell and EV manufacturers,” she said.

For his part, Adams doesn’t envision prices falling back below incentive levels for many years, meaning there is a lot of opportunity.

“The challenges are getting through the permitting stages, getting labor and skilled labor with the relevant know-how,” he commented to INN. “There are a lot of downstream users very keen to secure supply, so they should have little difficulty getting financed as long as they have quality projects.”

He added that in 2023 some of the heat will come out of prices, and that could dampen sentiment.

“But this should make for a better environment for mutually beneficial deals and partnerships to be made, which will be all-important for matching consumers with suppliers,” he said.

In terms of trends to watch, Jennings-Gray will be keeping an eye on alternative sources of lithium.

“The extent of success in regards to development of hard-rock assets in Jiangxi and Africa will be an interesting development,” she said. “Additionally, any breakthroughs in direct lithium extraction or alternative extraction methods, although most of these projects still seem to be focused on the midterm rather than near term.”

Another catalyst to pay attention to next year will be how directly involved OEMs get with the miners. “(This) could really see project pace pick up if huge investments are offered by the customers who need lithium the most,” Jennings-Gray said.

Speaking with INN at this year’s Benchmark Week, an entire week of conferences centered around the lithium-ion battery supply chain, CEO Simon Moores said OEMs have to take control of their supply chains.

“A lot of deals have been done with sort of development-stage junior mining, but a lot of them are very weak deals,” Moores said. “Reality is these companies, these developers need hard cash to get things up and running.”

Listen to the interview above to find out more about Moores’ thoughts on battery raw materials.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

Additional information on lithium stock investing — FREE

Caspar Rawles: Cathodes, Anodes and What to Expect in 2023

INN caught up with Caspar Rawles of Benchmark Mineral Intelligence to talk about the battery manufacturing space.

Speaking with the Investing News Network after this year’s Benchmark Week event, held in Los Angeles in mid-November, Caspar Rawles, chief data officer at Benchmark Mineral Intelligence, said the main trend in battery manufacturing this past year has been a big increase in the volume of production.

“Lots of new battery plants, lots of new capacity now producing and delivering largely into the electric vehicle (EV) market, but sort of growing into the energy storage spectrum as well,” he said. “One of the key trends within that as well has been the continued growth of lithium-iron-phosphate batteries within the Chinese market specifically.”

Another key trend seen in 2022 has been a more aggressive push from governments to reduce their dependence on Asia and build domestic supply chains for lithium-ion batteries. “Fundamentally, one of the challenges that potentially plays into all of this, is that you can build the battery plants, you can build the EV plants, you can build the cathode plants, but if you don’t have the raw materials to feed them, they’re just expensive weights on your balance sheet,” Rawles said.

Commenting on the cathode space, he highlighted that over 90 percent of cathode production capacity plans currently sit within China. “In the US and in Europe, plans have been very much focused around battery production, and of course EV production, because you have large automakers in those regions, but that midstream hasn’t really been well attended to” Rawles said.

“We’re starting to see those investments happen, but building a new cathode plant is a two to three year time horizon — best-case scenario. So there’s still going to be some time before we see those plants come online.”

On the anode side, the expert pointed out that graphite might be at a turning point.

“Just the volume, the rate at which the market has been growing, has particularly accelerated over the last couple of years,” he said. “When we think about raw materials, graphite is actually the largest component by weight compared to any other battery raw material, so each gigawatt hour or megawatt hour of capacity that’s deployed has a big impact on graphite.”

Rawles also shared his insight on the market share for anodes and cathodes going forward. Listen to the interview above to learn more of his thoughts, or click here for the full Benchmark Week playlist.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

Additional information on lithium stock investing — FREE

Rodney Hooper: Lithium Structural Deficit Still Ahead, Mass Investment Needed

INN caught up with Rodney Hooper of RK Equity at this year’s Benchmark Week to talk about what’s been happening in the lithium space.

Lithium prices remain at historic highs after rallying in 2021 on strong demand from the electric vehicle sector.

RK Equity’s Rodney Hooper thinks a structural deficit is in the cards, even amid bearish oversupply calls from investment banks.

“I keep mentioning it — the only way to get this market in balance, or in oversupply, is to have an excess of upstream investment, and we just haven’t seen that,” he told the Investing News Network.

“We haven’t seen enough projects permitted. We don’t see enough projects under construction. And if anything, we’re seeing new projects that were assumed to be coming online already be slightly behind schedule.”

Speaking on the sidelines of this year’s Benchmark Week, held in Los Angeles, Hooper said he expects 2023 to have a supplier shortfall at least as big as this year, if not bigger. “I have readjusted my price forecasts, and I see around US$65,000, US$70,000 a tonne certainly as a price holding,” he said. “So I don’t see any sort of dip until 2025.”

Even though lithium stocks have suffered in recent weeks, most have seen year-on-year share price increases due to higher lithium prices, strong demand and optimism about the electric vehicle sector. But is it still a good time to buy lithium stocks?

“Lithium shares have run, so one needs to be selective,” Hooper said. “But I do see the market price holding for some time, which means that anything coming into production in the next while is going to enjoy high prices.”

Hooper believes there’s still value to be found in some early stage companies.

“I still think that early stage companies that can drill up have a lot of opportunity if we’re going to see elevated prices for most of this decade, which a lot of us believe that you will, and not necessarily at these levels, but high enough to be very profitable and well above what’s priced into the market,” he said.

Hooper also shared his insights on what to expect in the battery metals space in 2023, and which other battery metal aside from lithium he is keeping an eye on. Listen to the interview above for more, or click here for the full Benchmark Week playlist.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

Additional information on lithium stock investing — FREE

Top 9 Lithium Stocks (Updated December 2022)

As the year nears its end, the top lithium stocks by share price performance on US, Canadian and Australian exchanges are up significantly year-to-date.

Editor’s note — This article was originally focused on the top Canadian lithium stocks, but has been expanded to cover the top lithium stocks globally. Click here to read about the top Canadian lithium stocks.

Lithium broke its 2021 highs in 2022, rising to new levels. Although prices cooled slightly in the middle of the year, they climbed significantly at the end of Q3 and into Q4, slowing down slightly to end the year.

The Investing News Network recently spoke with experts about the trends that affected lithium in 2022, and one key concern that is steadily driving prices is the lack of supply compared to looming demand potential.

Companies around the world are working to answer that concern. In Australia, the year saw many companies on the ASX pivot to lithium, either tapping lithium potential in their pre-existing properties or acquiring new ones. As for the US, the Biden administration recently announced US$2.8 billion in grants for battery metals companies in the US.

Here the Investing News Network takes a look at the top lithium stocks with year-to-date gains.

The list below was generated using TradingView’s stock screener on December 14, 2022, for Canadian and US companies, and December 22, 2022, for Australian companies. It includes companies listed on the NYSE, NASDAQ, TSX, TSXV and ASX; all top lithium stocks had market caps above $10 million when data was gathered.

Top US lithium stocks

1. Sigma Lithium (NASDAQ:SGML)

Company Profile

Year-to-date gain: 198.77 percent; market cap: US$3.28 billion; current share price: US$31.70

In Minas Gerais, Brazil, Sigma Lithium has its Grota do Cirilo hard-rock lithium project, where it is currently constructing Phase 1 operations with expected commissioning by the end of the 2022 year. Sigma anticipates Phase 1 production of 270,000 metric tons (MT) annually and Phase 2 production of 531,000 MT. In addition to that, the company is building a greentech dense media separation production plant, which it says will make its operations vertically integrated.

On May 26, Sigma filed a consolidated technical report that looks at two initial production phases for Grota do Cirilo. The integrated operation would source feedstock spodumene ore from the company’s Phase 1 and Phase 2 lithium deposits to produce battery-grade, high-purity lithium concentrate. This expansion scenario “will potentially position (Sigma) as the world’s fourth largest lithium producer.” In mid-August, Sigma shared an update on its “transformative” Q2, mentioning the previously announced news that it had increased the resource at Grota do Cirilo by 50 percent; a Phase 3 technical report has now been filed. Its share price continued to grow throughout the year, reaching a year-to-date high of US$37.46 on October 27 after starting the year at US$10.57.

Midway through November, Sigma released a Q3 update, providing further information on its many construction activities and the commencement of spodumene ore mining that month. Most recently, December 8 saw the announcement of expansion and financing milestones — according to Sigma, it has received positive economic results from a study focused on the potential to boost output at Grota do Cirilo from 270,000 MT in 2023 to 768,000 MT in the operation’s second year.

2. SQM (NYSE:SQM)

Company Profile

Year-to-date gain: 75.83 percent; market cap: US$25.53 billion; current share price: US$89.97

SQM is one of the world’s largest lithium companies. It produces lithium out of Chile’s Salar de Atacama and brings it to the market in the form of lithium carbonate and lithium hydroxide. SQM is developing the hard-rock Mount Holland lithium project in Australia through a joint venture with Wesfarmers (ASX:WES,OTC Pink:WFAFF). The company places a heavy emphasis on the sustainability of its operations, with a production process that involves 97.4 percent solar energy.

On March 2, SQM released its 2021 earnings report, including net income of US$585.5 million compared to US$164.5 million for 2020. SQM’s share price spiked in May and continued to rise through late May, reaching what was then a year-to-date high of US$113.33. On August 17, SQM shared its Q2 and H1 earnings for this year. In H1, the company saw US$1.66 billion in net income, which was an increase of 940 percent over its net income of US$157.8 million in H1 2021.

In September, SQM celebrated 25 years of lithium production in Chile, and reflected on its path to that point; it also shared its vision for the Salar Futuro project, which is focused on increasing the sustainability of extraction from the Salar de Atacama. Options being looked at include advanced evaporation technologies and direct lithium extraction. On September 14, the company’s share price hit a fresh high of US$133.52. In its Q3 results, released in mid-November, SQM reported US$1.1 billion in net income for the quarter, and US$1.63 billion in gross profit. Most recently, SQM announced an interim dividend of US$3.08 per share.

3. Albemarle (NYSE:ALB)

Company Profile

Year-to-date gain: 4.7 percent; market cap: US$29.04 billion; current share price: US$247.86

Albemarle is a lithium giant that produces lithium, bromine and catalyst solutions at operations around the world. It has a 49 percent interest in the company whose subsidiary, Talison Lithium, owns and runs the Greenbushes mine, as well as a 60 percent interest in Mineral Resources’ (ASX:MIN,OTC Pink:MALRF) Wodgina mine. Both of these are hard-rock lithium mines in Western Australia. The company runs the Silver Peak lithium mine in Nevada, which it calls the only producing lithium mine in North America; it also creates high-quality lithium products. Its most significant lithium operations are at Chile’s Salar de Atacama.

On June 13, Albemarle inaugurated its third chemical conversion plant in Chile, which it said should double its lithium production, as well as lower water consumption by 30 percent per MT. At the end of August, Albemarle shared plans to create two global business units, one of which will focus on lithium. The company expects the units to be active as of January 1, 2023.

Albemarle received US$150 million on October 19 to help fund a commercial-scale lithium concentrator facility in North Carolina; the money came as part of the new US battery supply chain grant program. A week later, the company acquired Guangxi Tianyuan New Energy Materials, which owns a lithium conversion facility that can convert 25,000 MT of lithium carbonate equivalent per year.

News continued for the company, which shared its third quarter results, including a gain of 318 percent in net lithium sales over 2021. On November 9, the company announced it was investing up to US$540 million into its bromine operations in Arkansas, US. The news drove its share price significantly, bringing it to a year-to-date high of US$325.38 on November 11. Days later, the company announced it had hired Sean O’Hollaren as chief external affairs officer.

Albemarle announced on December 13 that it will establish the Albemarle Technology Park in Charlotte, North Carolina, and has acquired a place at which to do so. The company is investing US$180 million in the facility, which will be “a world-class facility designed for novel materials research, advanced process development, and acceleration of next-generation lithium products to market.”

Top Canadian lithium stocks

1. Tearlach Resources (TSXV:TEA)

Company Profile

Year-to-date gain: 655.93 percent; market cap: C$140.39 million; current share price: C$2.23

Tearlach Resources has spent the year building up a portfolio of lithium projects in Ontario’s Thunder Bay area.

After trading relatively flatly through the end of August, the company saw huge gains in the last four months of the year. The firm released a corporate update on September 19 that discusses the NI 43-101 technical report for its Savant project, as well as its option agreement to acquire 100 percent of the Ferland project. Later that month, Tearlach signed option agreements to acquire 100 percent of both the Wesley and the Harth lithium projects.

Tearlach’s share price really began to climb after the October 4 appointments of Paul Chow and John Bean to the company’s board of directors; both have experience in a range of industries. On October 27, the company shared it was commencing a C$5 million private placement, which later closed in mid-November at C$7.59 million. After starting the month at C$0.58, Tearlach ended at C$1.48.

December also brought significant news for the lithium company. On December 5, Tearlach announced further acquisitions, this time the option to acquire a 100 percent interest in Pakwan and Margot Lake in the Electric Avenue region.

“Adding to an already exciting portfolio, the Pakwan and the Margot are located in the most prolific lithium mining trends in the Americas,” CEO Ray Strafehl commented in a release. “The Projects are in a region with multiple discoveries, favourable geology, proven metallurgy, and most importantly, on-trend and next to one of the highest-grade lithium projects in the Americas.”

Tearlach’s most recent news came on December 8 with the appointment of Morgan Legstrom as CEO and director of the company. Its share price hit a year-to-date high of C$2.25 on December 15.

2. Sigma Lithium (TSXV:SGML)

Press Releases Company Profile

Year-to-date gain: 228.46 percent; market cap: C$4.24 billion; current share price: C$42.70

For information about Sigma Lithium and what has driven its share price, see its entry in the top US lithium companies section above.

3. Nevada Sunrise Metals (TSXV:NEV)

Press Releases Company Profile

Year-to-date gain: 171.43 percent; market capitalization: C$17.62 million; current share price: C$0.19

Nevada Sunrise Metals, which underwent a name change from Nevada Sunrise Gold in September, wholly owns two lithium projects, the Gemini and Jackson Wash assets, which are located in the Lida Valley basin in Nevada. According to Nevada Sunrise, the Lida Valley basin shares similar geography to the nearby Clayton Valley basin, where Albemarle’s (NYSE:ALB) Silver Peak lithium mine is located. In addition to its lithium properties, the company owns 100 percent of the Coronado VMS project, 20 percent of the Kinsley Mountain gold project and 15 percent of both the Treasure Box copper project and the Lovelock Mine cobalt project.

In Q1, Nevada Sunrise Metals saw little movement, even as it commenced exploration at Gemini. It wasn’t until the company shared its first drill results on April 18 that its share price broke above C$0.10, jumping from C$0.08 to C$0.14 overnight. Further exploration results at the project, including 1,101 parts per million lithium over 730 feet, continued to drive its share price higher.

After rising through May and early June, the company’s share price hit an H1 high of C$0.36 on June 10 off the back of June 6 exploration results showing 327.7 milligrams of lithium per liter of water over 220 feet, as well as private placement news. In late July, Nevada Sunrise received an exploration permit for Gemini that increased the number of boreholes at the project to 12, six of which were planned for a Phase 2 drilling program at the project. The company’s share price spiked significantly, from C$0.22 on August 23 to C$0.38 on August 30, a new year-to-date high for the company, although it did not release news during that time period.

Phase 2 drilling commenced in mid-October and has two objectives: to test lithium-bearing brine and sediments at greater depths compared to previous exploration, and to test the width of a previously identified lithium-bearing zone. In November, Nevada Sunrise brought on Willem Duyvesteyn as a metallurgical consultant. Most recently, on December 6, the company received preliminary geochemical analyses for one of the boreholes at Gemini; results show that it has intersected lithium-bearing sediment.

Top Australian lithium stocks

1. Tyranna Resources (ASX:TYX)

Year-to-date gain: 283.33 percent; market cap: AU$57.73 million; current share price: AU$0.023

Tyranna Resources (ASX:TYX) was previously focused on gold and nickel, but pivoted this year to lithium. After acquiring 80 percent of Angolan Minerals in May, Tyranna now owns the Namibe lithium project in the Giraul pegmatite field in Angola.

Although Tyranna’s share price performed relatively flatly early in 2022 — staying around AU$0.006 — the company’s acquisition of the Namibe project began driving it upwards, and shares of Tyranna have steadily moved higher over the course of the year. The company released an update on exploration in early August, sharing that Angolan Minerals had completed a Phase 1 exploration program that included 50 samples. In late August, results from the exploration revealed an average grade of 3.21 percent lithium oxide between the samples, with a high point of 9.74 percent.

Tyranna’s share price hit a year-to-date high of AU$0.056 on September 11, the day before it revealed its plan for a maiden drilling program at Namibe’s Muvero prospect. The company anticipated that it would be complete by the end of November. However, on November 7, the company released early findings from the first three drill cores at the site — although one core did show visible spodumene, some of the drilling was not intersecting what the company had anticipated based on its preliminary exploration. Tyranna changed its drill program in response to these results, with its share price dropping from AU$0.042 to AU$0.032 overnight.

Tyranna completed the revised drill program on December 6, sharing that assays should be available in February 2023. So far, drilling has confirmed the presence of lithium below surface, and Tyranna has said the information gained from the program will be used to plan its optimized follow-up drilling in 2023. This news caused its share price to drop again, falling from AU$0.032 to AU$0.025 by December 7. Although Q4 has been less positive for Tyranna, it is still up significantly year-to-date.

2. Latin Resources (ASX:LRS)

Press ReleasesCompany Profile

Year-to-date gain: 244.83 percent; market cap: AU$207.51 million; current share price: AU$0.10

Latin Resources (ASX:LRS) is an exploration company looking for metals that will help move the world towards net-zero emissions. The company is focused on lithium and copper projects in South America, and in Australia it has the Cloud Nine kaolin-halloysite project. Its lithium projects are the Salinas pegmatite project in Brazil and the Catamarca pegmatite project in Argentina.

In late March, Latin Resources discovered high lithium grades during exploration at Salinas, causing its share price to soar over the next two weeks. The company released assays from the project with a peak grade of 3.22 percent lithium hydroxide; shares moved from AU$0.06 the day of the release to AU$0.22 by April 6, a year-to-date high. As Q2 progressed, Latin Resources moved lower.

August saw more positive movement for Latin Resources, when drilling confirmed a new discovery west of Salinas’ Colina prospect. Results from metallurgical test work received in late August were described as positive, with 78.72 percent of the lithium oxide recovered into a concentrate grading a “very high” 6.57 percent lithium oxide.

In early October, the company announced a new discovery at the Colina prospect after drill results showed multiple high-grade lithium-bearing pegmatites. November brought news that Latin Resources was back on the ground in Argentina to recommence field work at the Catamarca project, and the company shared details on what its next steps at the project will look like.

Its two most recent pieces of news were both related to the Salinas project. The company received further metallurgical test work results, reporting recovery improvements since the last batch, with an average of 80.5 percent lithium oxide grading 6.6 percent. On December 6, Latin Resources released the maiden resource for the Corina deposit, with indicated and inferred resources totalling 13.3 million MT at 1.2 percent lithium oxide.

3. Cygnus Gold (CY5:AU)

Company Profile

Year-to-date gain: 111.11 percent; market cap: AU$69.87 million; current share price: AU$0.38

Cygnus Gold (ASX:CY5) is another ASX company that recently pivoted to lithium. The company has an option to earn up to 70 percent in the Pontax lithium project in Quebec, which it has focused on exploring in the latter half of 2022. Cygnus also has the Mitsumis lithium project in Quebec, as well as the Bencubbin polymetallic and Stanley gold projects in Australia.

In late September, Cygnus acquired 30 kilometers of strike length at which samples have graded up to 2.8 percent lithium oxide. The new land is adjacent to Pontax. October 4 saw the appointment of David Southam to the company’s board of directors; he was recently recognized as Mining CEO of the Year for ASX-listed companies. As of November 1, he became a non-executive director, and in February 2023 he will become a managing director. The company’s share price rose significantly the day of this news, jumping from AU$0.25 to AU$0.37, and continued to climb through October.

On October 13, Cygnus announced it would be raising AU$6.3 million to advance Pontax through the use of fully paid ordinary shares priced at AU$0.73 each. As of November 8, diamond drilling at Pontax had commenced, with 10,000 meters planned for the maiden drill program. The company’s share price reached a year-to-date high of AU$0.60 on November 14.

The first results from the diamond drilling came on November 29. According to the company, the “first two holes drilled at Pontax confirm a 75m-thick pegmatitebearing zone, with multiple stacked spodumene-bearing pegmatite dykes.” Due to the positive results seen from the drilling, the company has completed an AU$8 million private placement with the purpose of rapid exploration, with more drill rigs being mobilized in January and February.

FAQs for investing in lithium

How much lithium is on Earth?

While we don’t know how much total lithium is on Earth, the US Geological Survey estimates that global reserves stand at 22 billion MT. Of that, 9.2 billion MT are located in Chile, and 5.7 billion MT are in Australia.

Where is lithium mined?

Lithium is mined throughout the world, but the two countries that produce the most are Australia and Chile. Australia’s lithium comes from primarily hard-rock deposits, while Chile’s comes from lithium brines. Chile is part of the Lithium Triangle alongside Argentina and Bolivia, although those two countries have a lower annual output.

Rounding out the top five lithium-producing countries behind Australia and Chile are China, Argentina and Brazil.

What is lithium used for?

Lithium has a wide variety of applications. While the lithium-ion batteries that power electric vehicles, smartphones and other tech have been making waves, it is also used in pharmaceuticals, ceramics, grease, lubricants and heat-resistant glass. Still, it is largely the electric vehicle industry that is boosting demand.

Is lithium a good investment?

The lithium price has seen huge success over the past year, and many stocks are up alongside that. It’s up to investors to decide if it’s time to get in on the market, or if they’ll try to wait for a dip.

A wide variety of analysts are bullish on the market as electric vehicles continue to prosper, and lithium demand from that segment alone is expected to continue to rise. These experts believe the lithium story’s strength will continue over the next decades as producers struggle to meet rapidly growing demand.

How to invest in lithium?

Unlike many commodities, investors cannot physically hold lithium due to its dangerous properties. However, those looking to get into the lithium market have many options when it comes to how to invest in lithium.

Lithium stocks like those mentioned above could be a good option for investors interested in the space. If you’re looking to diversify instead of focusing on one stock, there is the Global X Lithium & Battery Tech ETF (NYSE:LIT), an exchange-traded fund (ETF) focused on the metal. Experienced investors can also look at lithium futures.

How to buy lithium stocks?

Lithium stocks can be found globally on various exchanges. Through the use of a broker or an investing service such as an app, investors can purchase individual stocks and ETFs that match their investing outlook.

Before buying a lithium stock, potential investors should take time to research the companies they’re considering; they should also decide how many shares will be purchased, and what price they are willing to pay. With many options on the market, it’s critical to complete due diligence before making any investment decisions.

It’s also important for investors to keep their goals in mind when choosing their investing method. There are many factors to consider when choosing a broker, as well as when looking at investing apps — a few of these include the broker or app’s reputation, their fee structure and investment style.

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