Why lithium stocks should be on your radar


Lithium stocks have emerged as a particularly bright spot on the ASX this year.

Hot demand has caused the traded price of lithium in China to more than double.

Investors are asking if these levels are sustainable, or whether we are seeing another flash-in-the-pan like the runs on uranium in 2007 and rare earths in 2011.

electric vehicle lithium ion battery batteries

Lithium ion batteries are found in electric vehicles and have storage applications; both are large markets now exploding from a standing start.

Now they are past their infancy, it is credible that both those uses can accelerate for many years ahead.

At Canaccord Genuity we have been following the sector closely for many years. And while the demand growth is fast, a supply response is hard to bring on quickly to meet it.

Which companies are exposed? There are a host of juniors, both explorers and developers.

Larger companies with larger resources that are approaching production include Mineral Resources and Neometals, which are set to benefit as shareholders of the Mt Marion mine; and Pilbara Minerals and its neighbours, Altura and Dakota, which are each working towards production in 2018 in Western Australia's remote north.

The following are some bigger lithium stocks in our coverage universe that are in production now.


Orocobre is commissioning 17,500 tonnes a year in the Olaroz project in Argentina.

The construction has had its challenges but it is coming into the market with terrific timing to meet this sweet spot of dramatic demand growth.

The mining company aims to be at capacity in the September quarter this year.

General Mining and Galaxy Resources

General Mining and Galaxy Resources announced the commencement of production from the Mt Cattlin mining and processing operations.

Bringing Mt Cattlin back on again after a three-year shutdown was a comparatively simple process.

The $100 million in capital invested by previous owners required only $15 million of fresh capital.

General Mining and Galaxy are targeting nameplate production rates of 15,000 tonnes a year of lithium carbonate equivalent by the end of 2016, with potential for an expansion of production rates.


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