- The demand for lithium has increased significantly in the past few years due to record-breaking sales in the electric vehicle (EV) sector.
- Leading economies of the world are investing much in the lithium sector which is set to transform the transportation sector.
- ASX-listed lithium miners - Galaxy Resources and Orocobre have announced decent quarterly results on the back of surging lithium demand.
The demand for lithium is increasing at a rapid pace on the back of record-breaking sales in the electric vehicle (EV) sector. The lag in the market equilibrium amid robust demand and tight supplies has pushed the prices of the white metal to close to 3-year high levels at CNY89,000 per tonne.
A rapid surge in demand for lithium is underpinned by the increasing need for green vehicles , transforming the transportation sector. The European government is offering decent subsidies to encourage the purchase of EVs. The world’s one of the leading growing economies, China has invested more than US$60 billion to support the go-green wave and to enhance the industry.
Australia is one of the leading lithium suppliers of the world and Australian lithium miners are the backbone of this ongoing revolution. In the backdrop of this, let’s have a look at two ASX-listed lithium stocks and their performance in the June quarter.
Galaxy Resources Limited
Galaxy Resources Limited (ASX:GXY) is a leading global lithium company that holds several hard rock mines and brine assets in Australia, Argentina, and Canada.
In the significant release, the lithium player announced a quarter-on-quarter rise in production from the Mt. Cattlin lithium project in the June quarter. The company has achieved a record quarterly production of 63,321dmt of lithium concentrate during the quarter from the project.
Unit cash operating cost has seen a significant drop of 17% at US$328/dmt for the quarter relative to the previous quarter. Adding to that, the miner has shipped 48,499dmt of lithium concentrate during the quarter from Mt Cattlin along with two additional shipments of 331,500wmt in July.
Source: © Xura | Megapixl.com
In its Sal de Vida project, located in Argentina, the miner is advancing towards the stage I production wellfield drilling. The company is targeting to achieve an initial annual production rate of 10,700 tonnes that will increase up to 32,000 tonnes per year with the first production anticipated in 2022.
Canada's James Bay project has started basic engineering to achieve construction-ready status by the end of the year. GXY has also submitted an updated Environmental Social Impact Assessment (ESIA) to the authorities who are incorporating engineering work.
The shares of GXY traded at AU$4.5 as of 29 July 2021. In last one year, the company has given a return of 320.6% to its shareholders.
Orocobre (ASX:ORE) is one of the largest and lowest-cost lithium producers in the world. The shares of ORE reached to all-time high level followed by the quarterly result announcement by the company.
Source: © Lecocqsebastien | Megapixl.com
The ASX-200 listed lithium and boron player has recorded a 22% q-o-q increase in sales revenue from its Olaroz lithium project located in Argentina despite a fall in sales volume.
ORE’s sales volume from the Olaroz project dropped to 2,549 tonnes relative to 3032 tonnes in March ending quarter. The miner has produced 3,300 tonnes of lithium during the quarter nearly 31% up relative to the previous corresponding period and 2% up on a q-o-q basis.
The company has also made significant progress towards the development of the second phase Olaroz project, expected to complete in 1H CY22.
The production from the project is expected to increase over two years to build the full capacity of 25,000ktpa by 2H CY24.
The shares of ORE traded at AU$7.980 as of 29 July 2021. The company has given a return of 159.1% to its shareholders.