Lithium prices drove electric vehicle prices higher in 2022 sending demand up for the top lithium stocks to buy lithium stocks.
Prices began trending downward at the end of 2022 as EV sales expectations weren’t as high as expected. Expiring subsidies in China were a contributing factor in that slide as well. But the market for lithium soon proved very hard to pin down.
Strong EV sales in China, Europe, and the U.S. changed market sentiment which pivoted in late April.
Suddenly the market concluded that the selloff was overdone and lithium carbonate prices doubled through late May. That’s where they stand now making the top lithium stocks to buy even more attractive.
| LTHM | Livent | $26.10 |
| LAC | Lithium Americas | $21.11 |
| PILBF | Pilbara Minerals | $3.13 |
Livent (LTHM)
Livent (NYSE:LTHM) shares have the potential to skyrocket over the next year for multiple reasons. Like all of the top lithium stocks to buy, Livent benefits from continued growth in EVs and difficult-to-predict surges in lithium prices.
But it also stands to benefit from the advantages of scale following its business combination with Allkem. That business combination could double the business on an EBITDA basis. Livent had given guidance for between $530-$600 million EBITDA when it released Q1 earnings results.
Following the business combination announcement the EBITDA figure is now $1.2 billion. What was positive about the company’s pre-combination earnings release was upward revisions to growth expectations.
The business combination creates a company with assets in Argentina and Canada. In the world of lithium mining that’s considered geographically adjacent and should strengthen the new firm’s supply chain overall.
In theory, the combination will lead to $125 million in overall savings for the company while the increased footprint makes the company a more prominent player.
Lithium Americas (LAC)
Construction began on Lithium Americas’ (NYSE:LAC) Thacker Pass lithium mine in March. That site is the largest lithium deposit in the United States and the second largest in the world based on proven reserves.
Commissioning of the site came after a long battle to block development. The age-old balance of environmental concerns versus business potential played out in Lithium Americas’ favor this time.
The company now has a major opportunity at hand with activities expected to begin in the second half of 2023.
Lithium Americas also includes operations in Argentina at two sites. One, Cauchari-Olaroz, is targeting initial lithium production in this month. The other, Pastos Grandes Basin, is targeting a construction decision by Q4.
The company intends to separate U.S. operations and Argentine operations in the future. Thacker Pass has clear potential to become a major strategic production site given its reserves and location in the U.S.
Pilbara Minerals (PILBF)
Pilbara Minerals (OTCMKTS:PILBF), like Lithium Americas, is another lithium stock to consider for its massive reserves.
The company holds rights over the Pilgangoora Project which is the largest independent hard-rock lithium operation in the world. The Western Australia site offers long-life operations at a low cost.
Pilbara Minerals’ most recent presentation shows a strong company. Its cash balance increased by 21% to $2.68 billion even as lithium prices fell. It maintains a strong relationship with South Korea, a major importer of lithium for EVs.
Pilbara is working under a joint venture with Posco to build a chemical facility in the country. Posco is one of South Korea’s largest industrial firms.
Beyond that, Pilbara Minerals is working to expand production. It is increasing spodumene production at one site by 100,000 tonnes per annum.
That project commences in September. It is also increasing production at another site to 1 million tonnes per annum. The first ore should be mined by March 2025.
Pilbara Minerals is not content to allow the opportunity at its operations to go to waste. The company is pivoting to mine and process as quickly as it can. That should matter due to its overall presence and geographic location.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.