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Summary
- The demand for Lithium is continuously increasing, with electric vehicles in demand.
- More than 50% of the Lithium produced is used in rechargeable batteries compared to 14% almost a decade ago.
Lithium is a key component in rechargeable batteries, and with the rising demand for electric vehicles, lithium stocks are expected to gain momentum, especially when industries are moving towards green technologies, electric vehicles are in focus. Earlier this year, a Deloitte report highlighted that the lithium demand could double or triple by 2030. As the EV market is growing exponentially, the next two decades can be decisive as most countries are setting their net zero carbon goals, and car manufacturers are looking for cost effective transition.
A US Geological Survey report stated that batteries account for about 70% of lithium consumption worldwide, followed by ceramics and glass. Most of the world’s lithium is produced by only select countries. More than 50% is contributed by Chile alone. However, the demand for lithium has increased significantly in last decade. More than 50% of the lithium produced is used in rechargeable batteries compared to just 14% in 2010. The automotive industry has picked up demand with the gradually reopening of the economy, and the electric vehicles segment is expected to boom, so is the lithium demand.
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We will focus on three Lithium stocks listed on the London Stock Exchange:
European Metals Holdings Ltd (LON:EMH)
European Metals Holdings Ltd is a mining and mineral development company focused on the Cinovec Lithium/Tin Project in the Czech Republic. The company is listed on the Australian as well as UK stock exchange.
Earlier in June, the company has announced its engagement with Minviro, which will provide an ISO-compliant life cycle assessment (LCA) for the entire Cinovec lithium/tin project. LCA is a widely accepted method used to quantify climate change and other environmental impacts for industrial processes.
Through this engagement, the company is looking for a transition towards climate neutrality and building a more sustainable society. As per the quarterly report ending March 2021, the company has successfully completed 12 programmes of a total of 19.
On 28 June, the shares of European Metal closed at GBX 83.00. The stock has delivered more than 407% return in the last one year.
Kodal Minerals PLC (LON: KOD)
An FTSE AIM All-share company is a development and exploration company with a focus on its Bougouni Lithium Project in Southern Mali. Earlier in June, the company has got acceptance of the feasibility study application for the Mining Licence application for its Bougouni Project.
Kodal will pay £135,000 as the fee to continue to advance the application process. The direction Nationale de la Geologie et des Mines ("DNGM") will then draft the Mining Licence and send to the Ministry of Mines, Energy and Water. Finally, the letter will be sent to the office of the Prime Minister for formal signing.
On 28 June, the shares of Kodal Minerals closed at GBX 0.41. The stock has delivered more than 742% return in the last one year.
Zinnwald Lithium PLC (LON:ZNWD)
Germany-focused lithium project company Zinnwald Lithium aims to supply value-added lithium products to Europe’s rapidly growing electric vehicle and energy storage market. In June, the company has entered into a binding agreement to acquire the 50% of Deutsche Lithium, which is developing the advanced Zinnwald Lithium Project in Germany.
This acquisition will give Zinnwald Lithium PLC the full ownership and operational control of the project, bringing Zinnwald a step closer to becoming a key supplier of batteries in Europe.
As per the audited results for the year ended 31 December 2020, the company is well-funded for 2021, with a €4.8 million cash position as of February 2021.
As of 28 June, the shares of Zinnwald closed at GBX 19.75. The stock has delivered more than 232% return in the last one year.
