The lithium mining renaissance represents a worldwide agreement that a transition to carbon-free energy generation is not only necessary, but also has to be expedited as soon as possible.
Among the fascinating aspects of the sector is the fact that lithium cannot be exchanged in the same way that gold, silver, and copper can.
It is possible for investors who want to obtain exposure to the lithium mining industry to do so by purchasing lithium mining equities.
Lithium is a chemical element (Li) that exists in the form of a soft, silvery metal. Indeed, it is so delicate that it may be readily sliced with a kitchen knife. Lithium is the world's lightest metal and solid element. Nature's lightest metal also happens to be one of the most chemically reactive, making it a critical component of cutting-edge technology.
Lithium is found in rock deposits around the world for mining purposes, and in brine deposits in portions of South America, notably Chile, Bolivia, and Argentina. It is from these brine resources that the bulk of commercially viable lithium is now derived - a subject we shall discuss later below.
What is the purpose of lithium?
Lithium and its compounds have a plethora of uses and applications, including but not limited to heat-resistant glass and ceramics, lithium grease lubricants, and as a treatment for mental health issues such as bipolar disorder, where they are used to stabilize mood swings associated with the disorder (remember the Nirvana song?).
However, its usage in lightweight, rechargeable Li-ion batteries for today's and tomorrow's cars has increased demand for the element and will continue to do so.
Li-ion batteries became the industry standard for a variety of reasons, but mostly because they pack a lot of power into a tiny package. Not only that, but they also have quick recharge times and a high recharge cycle count before they expire. And, of course, this technology is always improving.
A lithium stock is the stock of a company that is engaged in the business of mining lithium or manufacturing lithium-based products.
Lithium has grown in popularity as the electric vehicle (EV) market has exploded. Even Elon Musk lauded Tesla's reliance on lithium.
This highly coveted material is critical in the manufacture of the batteries that power these electric automobiles.
Lithium is one of the trendiest commodities available, especially with increased worldwide "green" activities and the switch to ecologically friendly autos.
As a result, including lithium stocks in an investor's portfolio early on has the potential to generate huge investors. Likewise, for carbon capture technologies.
Lithium Penny Stocks is a list of lithium penny stocks that are now trading on the OTCBB. Lithium is a kind of metal that is utilized in the manufacture of electric vehicle batteries. EV stocks are some of the hottest stocks right now, and as a result, many lithium and battery penny stocks are soaring.
The majority of EVs are powered by rechargeable lithium-ion batteries; the lithium-ion battery is the most expensive component of an EV, accounting for between 30% and 40% of the total cost. Lithium — a soft, silvery metal – is light, rechargeable, and has a high energy storage capacity, making it an excellent battery material. While lithium-ion batteries are also utilized in computers and mobile phones, the majority of lithium is projected to be used in electric vehicle batteries in the future.
Chile – lithium's Saudi Arabia – is home to more than half of the world's deposits. Australia is also a significant producer. After extracting and processing lithium, producers export products such as lithium carbonate or hydroxide to EV battery manufacturers such as CATL.
While lithium is not in short supply, it is costly to extract from hard rock minerals (spodumene) or salt brine. Supply has been curtailed for years due to a lack of investment in new projects and issues obtaining licenses. Because lithium mines take a long time to achieve capacity, supplies may be limited for some time.
Ironically, environmental resistance is slowing the development of new lithium operations, despite the mineral's critical role in combating climate change. While fresh supply is coming from Australia and Brazil, projects in China and Serbia have been delayed or halted due to local objections.
Prices of lithium carbonate more than quadrupled in 2021 and are expected to increase another 80% in 2022. (Lithium carbonate is used as a price reference for lithium.) Benchmark Mineral Intelligence, a research organization specializing in lithium, anticipates a lithium shortage in 2022. Lithium demand, according to Rio Tinto, is expected to expand at a 25-35 percent annual rate over the next decade. Additionally, IHS Markit, another research firm, anticipates the market would more than double in size between 2021 and 2025.
The lithium sector, on the other hand, is intrinsically cyclical and vulnerable to boom-bust cycles.
While the electric vehicle trend is the primary driver of lithium demand, the lithium stock chain is not limited to the car sector.
United Airlines' recent decision to purchase 100 completely electric 19-seat short-distance aircraft demonstrates this.
Demand for lithium carbonate and lithium hydroxide is projected to increase, as various industry sources have verified.
Demand for lithium is growing
Lithium mining and lithium stocks have received a lot of attention lately, and with cause. The long-forecast surge in lithium demand seems to have arrived, as our appetite for portable electronics and cleaner, lithium-ion powered cars continues to increase.
The demand for lithium has increased dramatically in recent years as lithium-ion batteries have become the de facto standard in a broad variety of products across many spheres of life - you are almost certainly reading this on a phone or laptop powered by a Li-ion battery. They are found in a wide plethora of products, including pacemakers, hearing aids, watches, laptop computers, and cellphones, as well as in houses and cars.
This surge in demand for lithium to power our life is predicted to accelerate exponentially in the future years, as we become more connected and as cars increasingly run on Li-ion batteries.
The dangers associated with investing in penny lithium stocks
The following are some of the primary dangers associated with investing in particular lithium stocks:
Individual stocks with a high degree of volatility
Regulations by the government
Inadequate liquidity
Inadequate openness on the actual availability of physical lithium
Businesses that are unproven
While there are various hazards, investors may still profit from lithium stocks via share appreciation.
What You Need to Know About Investing in Lithium Penny Stocks
The sector as a whole has both potential for development and obstacles. Although it is not one of the riskier markets, there is much speculation, which may deter more anxious investors.
Adding lithium penny stocks to the mix exacerbates the industry's speculative character.
For a reason, penny stocks are called penny stocks. They lack a number of characteristics that investors often invest in a company, and hence have a higher risk/reward ratio.
Breaking into the lithium industry, in particular, may be challenging for small-holder enterprises.
The top five lithium producers control two-thirds of refined production in volume terms and more than 80% in value terms.
This market hegemony (at least for the time being) has made it tough for smaller firms to break in, however lithium penny stocks may be just tiny enough to make the cut.
Best Penny Lithium Stocks to Buy
1. Piedmont Lithium Inc (ASX:PLL)
Piedmont Lithium is focused on developing its 100%-owned Piedmont Lithium Project in North Carolina, United States of America.
The lithium miner recently completed a scoping study, which revealed that Carolina Lithium will be one among the largest and lowest-cost producers of lithium hydroxide in the world.
The company's stock soared in September on the announcement of a sales deal with Tesla. Additionally, Piedmont made a strategic investment in Sayona Mining.
Piedmont shares returned 744 percent in one year, climbing from AU$0.090 to AU$0.74 (as of 30 July 2021).
2. Noram Lithium (OTC: NRVTF)
Noram has rebranded, as explained on the company's website. The fact that it is rebranding demonstrates the company's expansion.
It states on its website that the remainder of the website will be available shortly. Additionally, it describes how the new site represents the company's expansion. Noram evolved from a small exploratory company to a large North American company. It will also undergo a Preliminary Economic Assessment (PEA) in the near future.
Its market capitalization is little over $40 million, and it has seen tremendous growth since the start of 2020.
Noram is a Canadian company. It exports lithium to Europe, Asia, and North America on a worldwide basis.
It is fast expanding and has already established a worldwide business. All of these factors indicate that it is one of the top lithium penny stocks to buy for speculative purposes.
3. Global Battery Metals (OTC: REZZF)
Global Battery Metals Ltd. engages in the acquisition, exploration, and development of mineral properties in Canada.
The company owns a 55% interest in the Lara porphyry copper molybdenum property in Peru, which consists of three mineral concessions covering an area of 1,800 hectares; and an option to acquire up to a 90% interest in the North West Leinster Lithium Property in Ireland, which consists of fifteen prospecting licenses covering a total area of 477.39 square kilometers.
Additionally, it holds 100% of the Lithium King property, which consists of about 7,900 acres of placer claims situated in western Utah on the west side of the Great Salt Lake Basin.
4. United States Antimony
Antimony is not produced in the United States. As a result, it is not one of the top lithium penny stocks. However, antimony is a significant component in the manufacture of batteries. Additionally, it is employed in flame retardant materials, glass and ceramics, as well as munitions and transportation.
Between 2011 and 2015, United States Antimony saw a significant bull run, followed by a correction. It ranged from around fifty-five cents to approximately $4.50. It recovered and has recently begun to rise in price again. It has been erupting with ever-increasing spikes.
It surpassed the $2 milestone in February 2021.
The company does business in Mexico and across the world. USAC is vertically integrated, which means it can transport raw materials from the mine to the processing plant and then sell them. All inside the same company.
Its modest market capitalization of roughly $10 million, combined with its large bull surges, make it a stock worth watching.
5. Controlled Thermal Resources (Unlisted: CTR)
Controlled Thermal Resources is a renewable energy company that provides lithium resources.
This lithium penny stock is a publicly traded company that is not listed on a stock market. To purchase this one, you must go via an intermediary. Additionally, you may utilize a stock trading tool that enables you to purchase unlisted firms.
I included this one on the list since General Motors just joined with the company. This might imply years of consistent business. Reliable business and increased cashflow almost always result in an increase in stock price.
The following describes the nature of the collaboration:
GM invested several million dollars in the company's "Hell's Kitchen" initiative in California. It is the first company to invest in Hell's Kitchen and so has first dibs on lithium production. The lithium is supplied sustainably and domestically.
Additionally, there is the possibility of a multi-year relationship with General Motors. This might be quite beneficial for CTR's stock price.
The leadership team has been responsible for designing and managing renewable energy projects in the Salton Sea. And it has been doing so for at least a quarter-century. This establishes a strong basis and a track record of success with GM.
6. Aqua Metals
Batteries are recycled by Aqua Metals. This contains both lithium-ion and lead-acid batteries. Its website boasts about the purity of the lead produced by its processing technology. Aqua's objective is to boost world lead production while maintaining a low carbon footprint.
Aqua has an excellent leadership staff. They all have an extraordinary backstory. Each of the leaders has shown leadership and success in their respective industries.
Aqua Metals hit about $20 in March 2017. Since then, it has had a decline, falling below $0.40 in early 2020. It has just begun to regain its footing, and even saw a great bull run up to $6 in February 2021.
The stock has corrected, and this might be an excellent moment to purchase. The stock seems to be reviving its positive momentum. There are several catalysts entering the market at the moment. All of these triggers have the potential to transform this lithium penny stock into an outstanding one to hold and profit from.
7. AVZ Minerals Ltd (ASX:AVZ)
AVZ Minerals Ltd is a Namibian company engaged in mineral exploration and mining. It has a 60% share in central Africa's biggest lithium-rich property, the Manono Project. Additionally, the miner owns 100% of the Manono Extensive Project and 60% of the Katanga Regional Project.
The company delayed the document's publication last month as it conducted further internal evaluations of the research. The company had intended to publish an optimized feasibility assessment for its Manono Lithium and Tin Project by the end of July.
Meanwhile, the company concluded the June quarter with a cash balance of slightly under AU$2.5 million.
AVZ Minerals shares returned 220 percent during the last year, increasing from AU$0.060 to AU$0.18.
8. Westwater Resources, Inc. (NYSE: WWR)
Westwater Resources, Inc. is a company of diverse energy materials. It mainly conducts exploration for resources of lithium, graphite, uranium, and vanadium.
The company's primary project is the Coosa graphite property in east-central Alabama, which covers roughly 41,965 acres.
It also has a stake in lithium projects, including the Columbus Basin project, which encompasses about 14,200 acres in western Nevada and consists of two blocks of unpatented placer claims; and the Sal Rica project, which covers approximately 13,260 acres in northern Utah.
Additionally, the company is involved in a number of uranium projects, including 188,700 acres in western New Mexico and Texas.
9. Ultralife Corporation (NASDAQ: ULBI)
Together with its subsidiaries, Ultralife Corporation develops, produces, installs, and maintains power, communication, and electronics systems around the world. The company provides products and services to the government, military, and commercial sectors.
Battery & Energy Products and Communications Systems are the company's two segments.
The Battery & Energy Products segment provides lithium 9-volt cylindrical, thin lithium manganese dioxide, rechargeable, and other non-rechargeable batteries; lithium ion cells, multi-kilowatt module lithium ion battery systems, and uninterruptible power supplies; and rugged military and commercial battery charging systems and accessories, such as smart chargers, multi-bay charging systems, and various cables.
It distributes its products under the Ultralife, Lithium Power, McDowell Research, AMTI, ABLE, ACCUTRONICS, ACCUPRO, ENTELLION, SWE DRILL-DATA, and SWE SEASAFE brands to original equipment manufacturers, industrial and defense supply distributors, and directly to the United States and international defense departments.
Additionally, the company distributes its 9-volt battery to the general consumer market through national and regional retail chains, as well as online merchants.
Summary
While there is plenty to celebrate in the lithium industry, some stocks on the market are potentially unstable. Long-term investors would be wise to cut through the din as the switch to renewable energy approaches a tipping point. A lithium penny stock enables investors to get in on the ground floor of what may be the largest mining payoff in this generation's history.
FAQs
Is Physical Lithium Better than Paper Lithium?
While some investors may prefer to keep real lithium, paper lithium has consistently outperformed actual lithium in terms of price appreciation over the last few decades.
Are Lithium Stocks a Good Investment?
Lithium stocks have generally been profitable investments in previous decades. Always consider the risk associated with any investment prior to making a purchase.
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