There are a number of reasons investors are getting interested in lithium stocks. Here is a (very) brief overview of some lithium basics and what’s been happening in the market lately.
Investors have become increasingly interested in lithium stocks for several years now, and there are a number of reasons why.
Whatever the reason, it’s important to get familiar with the lithium market before investing in lithium stocks. Here is a (very) brief overview of some of the basics.
The lithium rundown
Lithium is a used in , ceramics, grease, lubricants and heat-resistant glass. It’s also used in lithium-ion batteries, which power everything from cell phones to laptops to electric vehicles — demand for lithium from this sector is growing quickly.
Lithium is found all over the world, in both . There’s some contention as to which type of deposit is superior, but generally there are .
Editor’s note: As one of of our readers points out and expands upon in the comments below, lithium is also found in clay deposits.
The world’s largest hard-rock mine is the Greenbushes mine in Australia, and the bulk of the world’s lithium brine production comes from salars in Chile and Argentina. Most are in Chile, and the prolific “lithium triangle” spans Chile, Argentina and Bolivia. Australia was once again the in 2017, and it was followed by Chile and Argentina.
Battery grade vs. technical grade?
There’s more than one type of lithium product out there. is used in ceramics, glass and other industrial applications, while battery-grade lithium carbonate and lithium hydroxide (which are much more expensive) are used to make lithium-ion batteries; they can also be used for technical applications in a pinch.
Current state of the lithium market
Tesla has stoked a lot of excitement in the lithium space, and lithium stocks as a whole have benefited. The company’s Nevada-based gigafactory is what first began to drive lithium excitement, but now it’s not the only lithium-ion battery megafactory that Tesla has planned.
It’s also not the only firm with lithium-ion battery megafactory ambitions — as Benchmark Mineral Intelligence, “the megafactories in China are also rising.” The firm expects the Asian nation to account for more than 50 percent of the world’s battery capacity for at least the next decade.