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Summary
- The surge in demand for electronic mobility solutions has fuelled the upward momentum for lithium prices.
- Lithium miners and battery manufacturers are the key constituents of the entire lithium ecosystem.
- Lithium stocks have produced stellar returns for investors in recent times.
The coronavirus pandemic has certainly pushed businesses to break the shackles and shift towards sustainable development. As a result, most of the carbon intensive industries are shifting towards greener technologies, and so does the global automotive industries. According to SMMT, the apex trade body for the motor industry in the UK, the demand for electric vehicles had continued to rise, despite the pandemic woes.
The global automotive industry is expanding its product lines with EV’s and Hybrid mobility solutions. These mobility solutions require Lithium powered batteries as a key component. Countries around the world are discouraging conventional gasoline and diesel vehicles in recent times. The surge in demand for electronic mobility solutions has fuelled the upward momentum for lithium prices. Lithium is set to fuel the EV revolution.
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Lithium, a key battery ingredient, is known for its lightweight and rechargeable properties and therefore is used in laptops and mobile phone batteries. Notably, leading tech titans such as Tesla and Apple have been expanding their EV plans.
Experts believe that the lithium stocks could deliver major gains in the approaching years as the worldwide EV market is expected to grow at a brisk pace. Notably, lithium miners and battery manufacturers are the key constituents of the entire lithium ecosystem.
In this article, we would put our lens through some lithium miners listed on the LSE and who have delivered strong returns for the investors in recent times.
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- Savannah Resources Plc (LON: SAV)
The resource company, Savannah Resources, produces lithium spodumene concentrates for international markets through its Mina do Barroso Lithium project located in Portugal. The project shall allow the company to take control of the entire value chain across Europe. The flagship lithium project in Portugal has been one of the major highlights for investors of the company.
Savannah CEO David Archer highlighted that the potential for lower capital and operating costs based on the company’s latest findings from their ongoing metallurgical test work programme at lithium project Mina do Barroso in Portugal.
The AIM-listed miner is set to become the leading producer of Spodumene (the most abundant lithium-bearing mineral) in Europe through its flagship project. The company looks forward to supplying lithium in the world’s largest lithium market, Europe, which is a global auto manufacturing hub.
In recent times, the raw material prices for lithium are on the rise as the demand from the battery and electric vehicle markets continues to grow. The company is expected to tap this opportunity and could become a global supplier of Lithium.
Shares of Savannah Resources have delivered a staggering return of 221 per cent in the past one year. SAV shares closed at GBX 4.75 on 10 March 2021.
- Kodal Minerals Plc (LON: KOD)
Lithium miner Kodal Minerals Plc primarily explores lithium and gold and is focused on West African region. The company is currently in pursuit of the Mining Licence for the Bougouni Lithium Project with the Government of Mali in order to advance the development of the Project.
The group owns the Bougouni lithium project located in Southern Mali. The Lithium miner is expected to receive up to US$2.5 million in funding by forming an agreement with Riverfort Global Capital Ltd.
The company shall deploy these funds to define resources at its projects in Mali and the Ivory Coast, along with exploration work. Recently, the miner also discovered high grade gold at the Dabakala concession through a surface sampling programme. According to the samples, the explorer found grades of up to 6.14 grams per tonne.
Shares of Kodal have delivered a staggering return of 144 per cent in the past one year. KOD shares closed at GBX 0.09 on 10 March 2021.
- Bacanora Lithium Plc (LON: BCN)
The lithium miner, Bacanora Lithium, recently commenced initial site activities at its flagship Sonora lithium project located in Mexico. Chinese miner Ganfeng Lithium injected $65 million into Bacanora and increased its stake in the Mexican project from 22.5 per cent to 50 per cent. Bacanora shall deploy these funds in developing the mine. Bacanora is expected to produce battery grade lithium estimated at 35,000 tonnes per year by 2023. Driven by increased demand for electric vehicles, the company expects lithium demand to surge by 800 per cent over the course of this decade.
The company had cash balances of US$39.2 million as of 31 December 2020. Bacanora Lithium seems to be fully equipped to develop the Sonora mine project.
Shares of Bacanora Lithium have delivered a staggering return of 77.62 per cent in the past one year. BCN shares closed at GBX 40 on 10 March 2021.
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