The Electric car market has shown enormous growth in recent years. As the world moves towards an era of EVs, the demand for their raw materials has soared in parallel. Electric vehicles are powered by lithium-ion batteries, making lithium an essential resource in the production of EVs. What makes this shiny metal even more interesting is the scope of its use. The use of lithium is not only limited to the automobile industry. It is the power cell for the majority of smartphones and other electronic gadgets in use nowadays. This bloom in lithium-ion batteries’ demand has attracted many investors, and they are constantly looking for ways to get their hands on this valuable commodity.
7 Canadian Lithium Stocks You Should Invest In
For Canadian investors interested in jumping the gun on lithium stocks, here are seven stocks that have the most promising future.
Lithium Americas (TSX: LAC)
Lithium America Corps is one of the most prominent names in the lithium mining sector. Founded in 2007, this Canada-based company focuses on developing two lithium projects, one in Argentina and one in the United States. Their rapid development of the Cauchari-Olaroz lithium brine project in Argentina, the third-largest lithium brine deposit globally, has poised them to become a significant player in the lithium production sector. Apart from that, the Thacker Pass Lithium Project, owned 100% by lithium America, is well on its way to becoming the largest lithium producer in the United States. This American Lithium project is expected to have an annual production capacity of more than sixty thousand tons.
Lithium Americas has partnered up with Ganfeng lithium, the leading manufacturer of lithium products in China. Owing to a growing demand for electric vehicles in China, the prospects look bright for Lithium Americas. This clear business model makes them an ideal company to invest in.
Within only the last five weeks, Lithium Americas Corporation has witnessed a growth of 35% in its stock value, turning heads all around the stock market. At this moment, it is ranked second on the list of top metals on TSX. Trading at $21.49 as of August 16, 4:29 am, this stock is expected to grow even further in the upcoming months. Moreover, the healthy stock trades volume of 691,000 hints at the sustainability of this lithium stock, making it an ideal stock to invest in.
Standard Lithium (TSX.V: SLI)
Founded in 1998, Standard Lithium is a mining company that uses cutting-edge technology for the exploration and mining of lithium and other minerals. The company has two significant products under development as of now. Their flagship lithium brine project, the “Lanxess Project,” is developed near El Dorado, Arkansas, home to the United States’ largest brine processing facility. The abundance of industries in Arkansas, coupled with the availability of the infrastructure required for exploration and development there, has tipped Lanxess Project to become hugely profitable.
Another lithium project in San Bernardino County is also under construction. The 45,000-acre Bristol and Cadiz dry lake lithium project is still not fully developed, but it will prove to be a game-changer once it’s up and running.
Although still a venture capital stock, the stocks of Standard Lithium have spiked in valuation. The valuation has increased by a massive 430% in the last year, and the stock prices are growing without an end in sight. If the lithium demand forecasts are accurate, it is safe to bet that Standard Lithium won’t be running low on profits any time soon. This stock is currently trading at $8.8 on August 17th, 6 am PDT. Considering the size of the lithium-dependent industry, coupled with a burgeoning lithium demand, you won’t regret investing in this stock.
Rock Tech Lithium (TSX.V: RCK)
The global push for cleaner energy has enticed several industries to look for environmental-friendly sources of minerals. Rock Tech Lithium is turning up to the challenge. The Vancouver-based company has set its eyes on lithium hydroxide production; if it succeeds, it will be one of the first lithium hydroxide producers outside China. The company aims to start lithium production by the start of 2023. However, market watchers have foretold that the economic assessment of rock lithium deposits is highly optimistic.
The company counts on the high-quality spodumene deposits in the Georgia Lake Area near Ontario to produce battery-grade lithium. The company has also planned to erect a lithium hydroxide converter in Europe, which will be instrumental in supplying lithium to European electric vehicle manufacturers. Supply chain experts have predicted that lithium from Chinese miners to European manufacturers is not sustainable in the long run. Nevertheless, this is a transparent business model for North American and European lithium manufacturers, and Rock Tech plans to capitalize on this market.
With the common shares issued and outstanding reaching the 60 million mark, investors are lining up to buy Rock Tech stocks. The stock is currently trading at $5.30 on August 17 (10:56 am PDT), making this an excellent time to invest in this promising stock.
Orocobre Limited (TSX: ORL)
Orocobre is a global supplier of minerals that excels in the production of boron and the development and supply of battery-grade lithium carbonate. The flagship project of Orocobre, Olaroz lithium, is set to complete its stage 2 expansion, taking its annual lithium production to 42,500 tons per annum. Furthermore, its partnership with Toyota Tshushu, part of the Toyota group, means a booming market for its lithium resources. Another exciting aspect of this investment is Orocobre’s likely merger with Galaxy Resources, scheduled for August 26. The merger will position the new group as one of the top 5 lithium producers and developers worldwide, with projects spread all over the globe, from Japan to South America.
On August 10, the share price of Orocobre Ltd was at an all-time high of$9.51. The Orocobre stock price has doubled in 2021, signalling the increasing interest of investors in this company’s lithium ventures. The stock price of Orocobre Ltd is currently trading at $8.38 (11:56 am Ptd), with a share volume just short of the 100k mark. With an impressive market cap of $2.8 billion, now is the best time to invest in Orocobre Ltd.
Global Battery Metals (TSX.V: GBML)
Another emerging name in the lithium development industry is the Global Battery Metals. Formerly known as Redzone Resources Ltd, this Vancouver-based company is one of the most promising penny stocks on the TSX.
Global Battery Metals has set its eyes on three projects at the moment: the Leinster Lithium project in Ireland, Lara Property in Peru, and Lithium King in the Pilot Valley of Nevada. Leinster Lithium Project is being developed in an area that boasts high-grade lithium and better conditions for lithium acquisition. In addition, there are several places where high-quality deposits of spodumene (ore that bears lithium) are abundant. The company has the option to acquire 90% of the North-West Leinster Lithium Property, where it plans to increase lithium exploration and development. Global Battery Metals also owns a stake of 55% in the Lara Property of Peru, where Minsur is building a $1.3 billion mine.
Currently trading at $0.27 (12:30 pm Ptd), this stock has massive growth potential. Despite being a penny stock, analysts predict that the ongoing development of lithium projects will act as a catalyst for this stock’s growth.
Neo Lithium (TSXV: NLC)
Neo Lithium is another lithium development company that excels in the development of low impurity, high-grade lithium. They produce 99.9% battery-grade lithium carbonate, which is the highest quality lithium carbonate produced to date. They have done so using their upgraded alkali methodology. Their current plant works in batch mode, which the company will soon convert into a continuous mode to keep up with the lithium demand. Their business model is sustainable, and with a market cap of $627 million, it is undoubtedly standing out from the crowd. With the rapid increase in Lithium demand across Europe, Neo Lithium will likely prove to be a key player in this emerging industry.
The flagship project of Neo Lithium is the 3Q Lithium Brine Project. This project is located in the Lithium Triangle of Argentina, known for housing more than 40% of the lithium reserves. Neo lithium controls 100% of this project and supervises the development of all lithium resources. In addition, there is no aboriginal or native population in this area, making it a mining-friendly project that is sustainable in the long term.
With an impressive maximum yield of 100 lts/sec, the 3Q Lithium Project is equipped to keep up with the lithium demand of Europe. Trading at $4.44 on August 18 at 7:08 am PDT, it is a promising lithium stock for Canadians.
E3 Metals (TSXV: ETMC)
E3 Metals is a lithium development company with more than 7 million tons of LCE (Lithium Carbonate Equivalent) inferred mineral resources. Within one year, the stock price of E3 Metals has risen by a whopping 444%. The company has done well to cope with the economic recession caused by the Coronavirus outbreak. The company has a state-of-the-art proprietary extraction method that converts impure lithium reserves into battery-grade lithium, ready for industrial use. E3 Metals uses direct lithium extraction technology and aims to eliminate its carbon footprint within the next few years.
E3 Metals plans to extract pure lithium from the lithium-enriched brine 2500 meters below the surface in the famous Leduc Formation in Alberta. The company has recently graduated to the Tier 1 of the TSX Venture Exchange. Stock analysts are predicting an influx of investments to follow suit. The company is partnered with the University of Alberta for research and development in its future projects. In addition to this, the company has also secured funding from the NSERC, Alberta Innovates, and GreenCentre’s RISE Program.
With its sole project Alberta Lithium in its final development stages, stock analysts expect ETMC to soar soon. Trading at $1.73 on August 18 at 9:08 am PDT, E3 Metals is another good option for Canadians looking for lithium stocks to invest in.
Why You Should Invest in Lithium Stocks in Canada
The world is continuously looking for ways to incorporate greener technologies in its future projects. Lithium is a critical raw material in power generation, electric vehicles, and energy storage. The increased demand and lack of lithium supply have demonstrated that we need new lithium resources to keep up with this ever-increasing demand. You can only do this by investing in lithium development projects. Several investors worldwide are now planning a direct investment in lithium stocks and earning a hefty profit from this lucrative market.
In the last decade, we have seen an enormous boom in the stock prices of companies that excel in lithium resource development. The lithium stocks were off to a good start during the first half of 2010. After that, the stocks kept on rising until 2019, just before the stock market went into a downfall due to the covid-19 pandemic and an increased supply of spodumene.
However, due to the increased efforts of governments across the world, the EV industry has taken up an unprecedented pace. Several world leaders have vowed to ramp up the production of electric vehicles, resulting in a surge in demand for lithium. However, the sluggish supply is not enough to keep up with the rising demand. With the global EV market passing the 10 million vehicles milestone, lithium investors witness massive investments return. Several mining companies have ventured into the world of spodumene mining, and many more are following suit.
The batteries required for energy storage and electric vehicles need to be rechargeable, lightweight, compact, and highly efficient – without compromising energy density. Lithium can store high energy density in a tight area, produces rechargeable batteries, and its mining is environmental-friendly. Therefore, the world is constantly moving towards lithium batteries to satiate its clean energy demands.
The Bottom Line
Stock analysts believe that lithium stocks will become more profitable as we advance into a world powered by clean energy. To meet the battery production targets, we need to invest more in the lithium space. There are several investment opportunities in the battery minerals assets industry. Although the stock prices might come under pressure in the short term, keep the big picture in mind while investing in lithium. Lithium development companies with environmental-friendly technologies are going to be hugely profitable in the future.
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Lithium Stocks In Canada
Following this article, you should see the promise for Canadian lithium stocks, at least in the short term. With significant gains in the year to date, we hope you enjoyed our guide for investors interested in the lithium space. ETFs held all of the above-listed lithium producers – as top holdings. In addition, we have provided some examples of the individual stocks that make up these ETFs and a breakdown of the market capitalization of each company.
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