Why should you invest in lithium stocks? In two words: electric vehicles (EV) . Lithium-ion batteries currently power almost every electric vehicle sold around the world, and that's just the tip of the iceberg.
According to Albemarle ' s ( NYSE: ALB ) latest investor presentation, global demand for lithium carbonate equivalent (LCE) is expected to increase more than eight times, growing from about 0.3 million metric tonnes in 2020 to 2.5 million metric tonnes by 2030, driven almost entirely by demand for battery grade lithium. LCE is the standard unit of measurement in the lithium industry, and Albemarle is the largest mining companylithium in the world.
This is growing exponentially, and it could mean huge opportunities for lithium companies. If you want play the EV and lithium boom , here are the two best lithium stocks you could buy right now.
This lithium stock is taking a big leap
Albemarle has three reporting segments: the bromines, lithium and catalysts. At present, lithium generates the highest revenue and profit for the company. In the nine months ended September 30, lithium generated 39% of Albemarle 's total revenue and nearly 53% of its adjusted profit before interest, taxes, depreciation and amortization (EBITDA).
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It's no surprise that Albemarle is laser-focused on expanding its intl lithium fleet. For example, it acquired the remaining stake in China-based lithium company Guangxi Tianyuan New Energy Materials in September. The acquisition includes a plant that is expected to start commercial productionin 2022 with an annual conversion capacity of 25,000 metric tonnes of LCE into battery-grade lithium carbonate and lithium hydroxide. In October, Albemarle signed agreements with a few Chinese companies to build factories that could initially produce 50,000 metric tons of lithium hydroxide per year. Lithium hydroxide is the most preferred form of quality battery material.
It is evident that Albemarle is currently targeting the largest electric vehicle market in the world. , China. In fact, China is expected to supply nearly 40% to 45% of Albemarle 's total sales by 2026, up from 20% now, thanks almost entirely to lithium.
And, Albemarle just came from raise its revenue outlook for 2021 to $ 3.3 billion to $ 3.4 billion as demand for lithium continues to rise. It may not be a pure lithium game, but Albemarle has some solid lithium assets, a an incredibly strong presence in the industry , and the financial capacity to make it even bigger. Albemarle is also an aristocrat of the
A speculative but convincing lithium title
Lithium Americas ( NYSE: LAC ) is boldest call I'm making right now, but if the company can achieve its 2022 plans, it could be a winning lithium stockpile in the years to come. Here's the problem: Lithium Americas hasn't yet started commercial production, but the latest comment and the acquisition of the company give investisseurs m uch to be hoped for.
Lithium Americas owns a 49% stake in the Cauchari-Olaroz mine in Argentina, with the Chinese company Ganfeng Lithium owning the remainder. The mine has been in development for nearly two decades now, but a promising feasibility study has encouraged management to increase the mine's annual production capacity to 40,000 tonnes of battery-grade lithium carbonate. Lithium Americas now says the mine is on track to start production by mid-2022, with operating costs expected to be as low as $ 3,600 per tonne. The price of lithium carbonate in China has just hit a record 197,000 yuan, or over $ 30,000 per tonne at the time of this writing.
Lithium Americas also owns the Thacker Pass which is known to be the largest lithium resource in the United States After encountering environmental and legal obstacles for severals years, Lithium Americas expects to receive all permits and begin construction at Thacker Pass in early 2022.
But here's the bigger deal: Lithium Americas is about to go. to acquire Millennial Lithium in Canada in a $ 400 million transaction. It includes the Pastos Grandes lithium project in Argentina which is expected to start production in 2024 and have an annual capacity of 24,000 tonnes of battery-grade lithium carbonate.
LAC given by YCharts
Lithium Americas describes this acquisition as a "rare opportunity " to add a complementary lithium asset to near Cauchari-Olaroz. In addition, a transaction entirely in sharesalso means that Lithium Americas can use existing cash - it held around $ 482 million as of September 30, 2021 - to develop Thacker Pass.
Lithium Americas stock has already seen a huge surge this year , but if his 2022 plans come to fruition, his the share price could receive another huge boost .