The ASX is home to quite a few lithium mining stocks. Why wouldn’t it be? Australia is the top lithium producer in the world with over 50,000 metric tonnes per annum. With the clean energy revolution on its way, batteries and hence, lithium are in the thick of it. Thus, there has been a lot of investor interest going towards lithium mining stocks in the recent past. Lithium mining companies play a key role in the future as the requirement for batteries has never been higher – supported by high growth industries such as electric vehicles.
Lithium stocks have performed magnificently during 2020, given the tailwinds for the commodity. The best lithium mining stocks in our opinion have an average return of 122% year-to-date.
Given how important lithium is to the future of everything electronic and electrical as we move away from traditional sources of energy such as coal, investors have been asking us what our top picks are for lithium mining stocks to add to their portfolios.
Orocobre is a Brisbane headquartered lithium mining company that has returned 41.13% return this year-to-date. In addition to lithium, the firm also has potash and boron as part of its portfolio.The firm has a market capitalisation of $1.29 billion and currently trades at $3.74 per share. The firm reported a 24% drop in production during the latest quarter at its Olaroz mine, located in Argentina. This is mainly due to Covid19 restriction that hindered operations. However, both rise in lithium prices and the resumption of activity is expected going forward. Orocobre have managed to reduce costs by 22% during the year, and have two growth projects in their pipeline.
Galaxy Resources has assets located in Australia, Canada, and Argentina. Their Sal de Vida lithium brine project in Argentina is currently in development and is expected to be a low-cost facility. During the year, Galaxy Resources has returned 116% to shareholders and it currently trades at $2.0 a share, demanding a market capitalisation of $850 million – another top lithium mining stock on the ASX.
Trading at 69 cents, with a market capitalisation of $1.52 billion, Pilbara has been another lithium stock to watch during the year. The year-to-date return is 146%. It focuses on lithium and tantalum properties of the Pilgangoora Lithium-Tantalum Project located in the Pilbara region. Recently, Pilbara announced they have entered an agreement with lenders to acquire Altura mining (ASX: AJM) lithium operation for a reported sum of $175 million. With a 100% owned project that has a long mine life of 40 + years, Pilbara is a lithium mining company to keep an eye on.
Piedmont Lithium is a dual listed company – on the ASX and NASDAQ in the USA. Their biggest project is based in North Carolina, USA. It comes with a 25 year mine life and an NPV of US$ 1.1 billion. Piedmont is already under a sales agreement with Tesla for the supply of lithium from 2022 onwards. With the huge American EV market at their doorstep, Piedmont is one of the best lithium mining stocks there is. They have a market capitalisation of $526 million and currently trade at a price of $0.375 a share. During the year, PLL has returned 220% to investors.
Mineral Resources is the biggest firm in this list of the top lithium stocks. They have a market capitalisation of $5.84 billion and currently trade at $31.65 a share. MIN has returned 91.82% year-to-date and it also has a dividend yield of 3.16%. Mineral Resources operates in the iron ore and hard rock lithium sectors and generates 65% of its revenues from Singapore. While Australia and China make up the rest. The latest quarter update reported an increase in mining services volumes by 24% compared to the previous corresponding period. The guidance forecast for FY2021 volumes have been increased from 20% – 25%. The performances of MIN have thus been stellar and is a hot stock in the lithium mining industry.
Lithium is a red hot sector going forward. Tailwinds for lithium mining stocks are coming in from several industries as the demand for batteries will go up further. At Shares in Value, we manage 3 portfolios that cover ASX 200 listed firms and small cap stocks from sectors that are poised to grow in the future.