The Electric vehicle industry has shown enormous growth in recent years. As the world moves towards an era of EVs, the demand for their raw materials and lithium stocks in Canada have soared in parallel. Electric vehicles are powered by lithium-ion batteries, making lithium an essential resource in EV production.
The scope of its use makes this shiny metal even more interesting. The use of lithium is not only limited to the automobile industry. It is the power cell for most smartphones and other electronic gadgets in use nowadays.
This bloom in lithium-ion batteries’ demand has attracted many investors, who are constantly looking for ways to get their hands on this valuable commodity and learn more about lithium companies.
8 Top Canadian Lithium Stocks to Buy
For Canadian investors wanting to gain exposure to lithium stocks, here are seven companies with the most promising future, which we think are the best lithium stocks in Canada.
Here is a quick list of the top lithium stocks:
- Lithium Americas
- Standard Lithium
- Rock Tech
- Allkem Ltd.
- Frontier Lithium
- Global Battery Metals
- E3 Metals
- Sigma Lithium
These companies own lithium properties, producing lithium through lithium mining, brine extraction, battery recycling & strategic partnerships. Here are the top Canadian lithium stocks of 2022 to consider buying.
Lithium Americas (TSX: LAC)
With a market capitalization of $3.67 billion, Lithium Americas Corp is among 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 one of the largest lithium operations in the United States. This American-based lithium project is expected to have an annual production capacity of more than sixty thousand tons, making it the most significant lithium producer.
Lithium Americas has partnered with Ganfeng lithium, China’s leading manufacturer of lithium products. Ganfeng Lithium is China’s largest producer of rechargeable batteries. Owing to a growing demand for electric vehicles in China, the prospects look bright for Lithium Americas. This straightforward business model makes them an ideal company to invest in.
Within the last five weeks, Lithium Americas stock has witnessed a growth of 35% in its stock value, turning heads around the stock market. Currently, 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 our pick for the best lithium stock.
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 project in San Bernardino County is also under construction. The 45,000-acre Bristol and Cadiz dry lake project are still not fully developed, but it will be a game-changer once it’s up and running.
Although still a venture capital lithium stock, the stocks of Standard Lithium have spiked in valuation. The valuation has increased by 430% in the last year, and the stock prices are growing without an end. So if the lithium demand forecasts are accurate, it is safe to bet that Standard Lithium won’t be running low on profits soon.
This stock is trading at $8.8 on August 17th, 6 am PDT. Considering the size of the lithium-dependent industry, coupled with burgeoning 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 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 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.
Allkem Limited (TSX: AKE)
(Formerly Orocobre Limited)
Orocobre was formerly the biggest lithium company in Canada, now existing as Allkem Limited, mainly an Australian lithium producer. Allkem is a global supplier of minerals that excels in the production of boron and the development and supply of battery-grade lithium carbonate. They are a major lithium producer with their flagship project of Orocobre, Olaroz lithium, which 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 producers and developers of lithium worldwide, with projects spread all over the globe, from Japan to South America. This company is now called Allkem Limited.
On August 10, the share price of Orocobre Ltd was at an all-time high of$9.51. The Orocobre stock price doubled in 2021, signalling the increasing interest of investors in this company’s 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 Allkem Limited.
Frontier Lithium (TSX.V: FL)
Frontier Lithium’s primary objective is to supply high-quality, low-cost, and environmentally friendly battery-quality lithium salts. Its PAK project comprises a large tonnage resource of low-cost, high-grade spodumene.
Producing battery-grade lithium with spodumene is much less resource intensive than extracting it from brine, making this deposit quite valuable. It is located on Ontario’s Electric Avenue.
With a new focus on mining operations in PAK’s Spark, Frontier Lithium has increased production and prices for the country’s precious metals. In February, the firm announced an update to its estimated resources for the Spark deposit, increasing the amount of ore containing valuable minerals from 14 million metric tons (MT) to 16 million MT. That same week, Frontier began construction on a $100 million expansion project at the site.
At the start of May, Frontier released the details of its exploration plan for the coming year, which will concentrate on the Spark deposit. In the interim, the firm has released multiple drill reports, including one for its Phase XI and XII drills at Spark. During Phase XI, Frontier intersects 144 metres averaging 1.72% lithium oxide (Li2O), and during Phase XII, the firm intersects 357.5 metres averaging 1.63% Li2O.
Global Battery Metals (TSX.V: GBML)
Another emerging name in the lithium development industry is 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: the Leinster project in Ireland, the 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. As a result, 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 projects will act as a catalyst for this stock’s growth.
Check out all of the emerging battery producer stocks here.
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 in coping 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 high-grade lithium, ready for industrial use. In addition, 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 top lithium stocks to invest in.
They are now owned by CATL – Contemporary Amperex Technology Co Ltd, a Chinese lithium-ion battery manufacturing company.
Neo Lithium is another lithium development company that excels in developing low-impurity, high-grade lithium. They produce 99.9% battery-grade lithium carbonate, the highest quality lithium carbonate 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. Its business model is sustainable, and with a market cap of $627 million, it stands out from the crowd.
With the rapid increase in Lithium demand across Europe, Neo Lithium will likely 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, this area has no aboriginal or native population, making it a mining-friendly project that is long-term sustainable.
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.
Sigma Lithium (SGML.V)
Sigma Lithium Corporation engages in the exploration and development of lithium deposits in Brazil. It holds 100% interest in the Grota do Cirilo, Genipapo, Santa Clara, and São José properties comprising 27 mineral rights covering an area of approximately 191 square kilometres located in the Araçuaí and Itinga regions of the state of Minas Gerais, Brazil.
The company was formerly known as Sigma Lithium Resources Corporation and changed its name to Sigma Lithium Corporation in July 2021. The company is headquartered in São Paulo, Brazil.
The Company, through its indirectly wholly-owned subsidiary Sigma Mineração S.A. (“SMSA”), is developing, with an environmental sustainably ESG-focused strategy, the largest hard rock lithium deposits to participate in the rapidly expanding global supply chain of electric vehicles (“EVs”).
The Company is in pre-construction and detailed engineering of an environmentally friendly, fully automated, dense media separator production plant. The Production Plant will be vertically integrated into the Company’s mining operations, utilizing the high-purity spodumene ore as feedstock with exceptional mineralogy from the Project.
Sigma plans to achieve net-zero targets by 2024, partly due to its strategic decision to pursue the generation of carbon credits through “in-setting” carbon credits (preserving and developing the agroforestry systems within its regional ecosystem).
The Project comprises four properties owned by SMSA. It is divided into the Northern Complex (the Grota do Cirilo, Genipapo and Santa Clara properties) and the Southern Complex (the São José property).
Investing in Lithium Companies 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 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 development projects. As a result, several investors worldwide are now planning a direct investment in lithium stocks and earning a hefty profit from this lucrative market.
Many lithium companies are listed on the Toronto Stock Exchange (TSX and TSX Venture), New York Stock Exchange, and the Australian Stock Exchange.
Is There Demand for Lithium?
In the last decade, we have seen an enormous boom in the stock prices of companies that excel in resource development. For example, lithium stocks were off to a good start during the first half of 2010. After that, the stocks kept rising until 2019, just before markets fell due to the covid-19 pandemic and an increased spodumene supply.
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 insufficient 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 spodumene mining, and many more have followed suit.
Why is Lithium so Valuable?
Lithium is a precious elemental metal (high electrical conductivity, thermal conductivity, and flexibility), making it a hot commodity. Moreover, lithium’s demand would naturally increase as it’s used to store much of our portable energy.
The batteries required for energy storage and electric vehicles must be rechargeable, lightweight, compact, and highly efficient – without compromising energy density. Lithium can store high energy density in a compact 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.
Is There Lithium Production in Canada?
There is currently some lithium in Canada in spodumene and brine reserves. However, lithium-containing brine is more capital-intensive to extract and can only be refined into lithium carbonate.
Whereas spodumene lithium mines get a much higher purity of the materials, which can be processed into either lithium hydroxide or carbonate. The largest lithium producers operate mainly in Australia, Chile and China.
Australia and Chile are the world’s largest producers in the global lithium market.
Is Lithium a Good Investment?
Lithium is an excellent investment due to the demand for lithium needed in EV batteries. Investing in lithium is a great way to gain exposure to the EV sales boom and the mining industry. Take a close look at a company’s projects and valuation to ensure you choose reasonably valued ones with room to grow.
The trend in Lithium Prices
Lithium futures prices have exploded over the past few years due to the demand for new technologies. The price has plateaued in our current market with bearish flags waving, but this won’t last forever.
We anticipate the future trend of lithium prices to increase as the demand will continue to grow for this finite resource. We think that demand will outpace supply, even with the world’s largest suppliers producing lithium – there will be too much global demand.
That is, unless another mineral or fuel cell can replace the lithium-ion EV battery, which will eventually happen with innovations.
How to Invest in Lithium
If you are looking for how to invest in lithium, it’s pretty simple. To buy lithium stocks, you will need to open a trading account with a major broker in Canada. Once you have your account, you can easily pick a batch of lithium producers listed on the TSX or TSXV.
Investing in lithium stocks in Canada is likely a good play, as the supply for this mineral can’t keep up with current demand. In economic terms, the value of this mineral will rise as there is a limited supply of lithium on the globe, and secondary industries will need to be created to service the primary supply (such as battery recycling firms).
Are There Lithium ETFs?
There are many lithium stocks to buy, but we have listed the leading companies above. Another straightforward way to accomplish this is by investing in a Lithium ETF. Lithium ETFs are a group of the top lithium stocks on the stock market at any time.
Similarly, since EV batteries are closely linked, you could also invest in a battery tech ETF to track the battery producers. Finally, there are many options on the stock market for investing in lithium stocks and ETFs.
What are the Best Lithium Stocks Canada Has?
The best lithium stocks of 2022 are companies which have properties, contracts and news in the pipeline. We say this because this sector will be a beast regardless, not investment advice.
If we had to choose one lithium stock, it would be one with the largest reserves, like Lithium Americas Corp, which also has a considerable market cap and excess cash.
Following this article, you should see the promise for Canadian lithium stocks, at least in the short term. We hope you enjoyed our guide for investors interested in this space with significant gains this year. 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.
The Bottom Line
Stock analysts believe lithium stocks will become more profitable as we advance into a world powered by clean energy. We need to invest more in the sector to meet the battery production targets. 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 the lithium industry. Lithium development companies with environmental-friendly technologies will be hugely profitable in the future.