By - Ankur Jaiswal
- September 2022’s Resources and Energy Quarterly report has revealed some insightful trends related to the demand for lithium and electric vehicles (EVs) worldwide.
- Lithium demand worldwide showed a strong increase in the June quarter of 2022, in turn deriving from growing demand for EV batteries, most of which use lithium as a key component.
- Notwithstanding the weak global economic growth registered in the June quarter of 2022, EV sales and production continued to rapidly grow.
With economies switching towards greener energy sources, the demand for battery metals like lithium is on the rise. September 2022’s Resources and Energy Quarterly report gives some interesting updates regarding lithium hydroxide spot prices (delivered to China). The prices peaked to an average of US$74,688 a tonne in April 2022. However, the prices did cool down a bit to reach an average of US$70,300 in August 2022. In contrast, the average price in January 2021 was only US$7,984.
One of the reasons for the meteoric rise in lithium prices is the growing popularity of electric vehicles (EVs) around the globe. Since lithium is a key element in the manufacturing of most EV batteries, the growth of the EV sector highly correlates with the price of lithium.
The year till June 2022 saw a 36% growth in EV sales worldwide, relative to the same period in 2021, as mentioned in the report.
With this backdrop, we at Kalkine Media® discuss some ASX-listed lithium stocks.
Global Lithium Resources Ltd (ASX: GL1)
A diversified explorer, Global Lithium primarily focuses on its fully owned Marble Bar Lithium project and the Manna Lithium project, where it holds an 80% interest.
As per Global Lithium, the total Inferred mineral resource stood at 18.4 Mt @ 1.06% lithium oxide (Li2O) for both projects.
The company has entered an MOU with one of the major Korean EV battery cell manufacturers, SK On Co., Ltd, to explore future business opportunities, including potential development of downstream lithium assets.
A few of the potential opportunities opened up by the MOU are as follows:
Source: © 2022 Kalkine Media®; data source: company’s update, 29 September 2022
Core Lithium Ltd (ASX:CXO)
The company is associated with what it believes will be Australia's newest and most advanced lithium project on the ASX, the Finniss Project in the Northern Territory.
Per the company update dated 10 October 2022, Finniss has been awarded major project status by the Australian Federal Government.
The company recently announced the official opening of the Finniss Lithium mine, targeting the export of direct shipping ore lithium by the end of the year 2022.
As per the company, it has already secured the sale of the Finniss Lithium project's production for the first four years, with nearly 80% to be sold to offtake partners. Ganfeng Lithium and Sichuan Yahua, who provided support during the development phase, are among the offtake partners buying Finnis Lithium's production.
Boadicea Resources Ltd (ASX:BOA)
Per its 2022 annual report, Australia-based exploration company Boadicea Resources Ltd has broadened its exploration portfolio to include major EV elements, namely lithium, cobalt, nickel, and copper, and gold.
As reported in the recently updated Exploration Activities Update Report, the company is making significant strides in three Western Australian projects:
For the Bald Hill East Lithium Project, the company’s auger sampling program conducted in the July 2022 quarter has identified three anomalous lithium zones. On 20 September 2022, the company concluded a 2,008 m reverse circulation drill program across 16 holes to evaluate the potential source of these zones.
Note: Companies with low market capitalisation may attract speculation and thus make themselves a risky investment choice. Hence, detailed research is required, as retail investors may easily get trapped in such instruments.