The lithium sector has faced a number of challenges in 2024 as the price of the commodity slipped by nearly 25% year-on-year amid a prolonged price rout, despite demand for lithium-ion batteries, which power electric cars and store renewable energy power, growing exponentially.
Challenges do persist for the critical battery metal, which is vital to the global electric vehicle (EV) revolution, as it faces an uncertain future given potential policy reversals under Donald Trump's return to the US presidency.
Trump is expected to roll back EV purchase incentives, which could slow US demand for lithium, potentially reducing the country’s battery market growth by up to 20%. This contrasts with the rapid expansion under Joe Biden’s Inflation Reduction Act, which injected billions into EV adoption and battery manufacturing.
Yet Morgan Stanley (NYSE:MS) recently told clients in a note that lithium prices have “likely found a near-term floor,” while Morningstar is also bullish on the long-term prospects of the future-facing commodity.
“The best time to invest in any commodity is when that commodity is in a down cycle,” said Morningstar analyst Jon Mills.
"It appears investors have lost hope as lithium producer’s share prices have taken significant hits this year after the commodity hit multiyear lows from oversupply. If you have been waiting in anticipation, now is the time to pay attention."
Many producers have cut supply in response to low prices, yet, end-market demand continues to grow. Morningstar predicts that as demand growth overtakes supply, the market will return to balance in 2025 from a current supply deficit. “This should lead to higher prices, which are the strongest catalyst for lithium stocks.”
This bodes well for a number of ASX-listed lithium companies, with opportunities potentially emerging in refining and processing critical minerals if the US retracts green energy investments.
Livium
Livium Ltd (ASX:LIT, OTC:LMMFF), previously Lithium Australia, is aiming to lead and enable the global transition to sustainable lithium production.
The company operates Australia’s market-leading battery recycler, produces critical battery material lithium ferro phosphate (LFP) and has developed a patented lithium extraction technology. It is now developing an Australian-based demonstration plant capable of continuous production of lithium ferro phosphate (LFP) and the emerging lithium manganese ferro phosphate (LMFP).
With binding offtake expected from this development, the demonstration plant serves as a critical stepping stone toward the establishment of a full-scale production facility with an expected capacity of 25,000 tonnes per annum of LFP or LMFP.
Livium’s revenue-generating recycling business and technologies are well-placed to capitalise on growing global lithium-ion battery demand and provide diversification benefits to global supply chains.
Kali Metals
Kali Metals Ltd (ASX:KM1) has a portfolio of assets representing one of the largest and most prospective exploration packages across Australia’s world-leading hard-rock lithium fields.
The company’s 3,960 square kilometre exploration tenure is near existing, emerging and unexplored lithium and critical minerals regions in Western Australia, including the Pilbara and Eastern Yilgarn as well as the Southern Lachlan Fold Belt in NSW and Victoria.
The company also has a number of prospective gold and tin projects within its existing tenure, and recently revealed a large, coherent gold-in-soil anomaly during exploration at its Marble Bar Lithium-Gold Project in WA.
Lightning Minerals
Lightning Minerals Ltd (ASX:L1M) is focused on the exploration of critical minerals and lithium at its tenements across Western Australia, Canada and Brazil.
The company has planned 3,500 metres of diamond drilling at various drill targets across its projects in the prolific Lithium Valley region of Minas Gerais, Brazil. Drilling is scheduled to begin in the current quarter, commencing at the Esperança project where lithium-bearing pegmatites have recently been discovered with spodumene grading up to 4.04% lithium oxide.
L1M is a strong believer in the lithium thematic and the potential that Brazil presents to be a significant contributor to the lithium supply chain, which is supported by recent acquisition activity in the region including Pilbara Resources’ $560 million acquisition of Latin Resources Ltd (ASX:LRS, OTC:LRSRF).
European Lithium
European Lithium Ltd (ASX:ASX:EUR, OTCQB:EULIF) is focusing on its Wolfsberg Lithium Project in Austria, aiming to be the first local lithium supplier into an integrated European battery supply chain. Wolfsberg is a hard rock lithium deposit with historical exploration, a JORC resource and exploration upside, which is close to road and rail infrastructure, and well located to service European consumers.
Additionally, EUR recently acquired the Leinster Lithium Project in Ireland, demonstrating its commitment to continue expanding in the European lithium sector. It also highlights the company’s ability to identify, secure and build in highly prospective lithium provinces.
This development is strategic for the EU to establish the sustainable supply chains of the critical minerals essential for the transition to a low-carbon emission economy.
Anson Resources
Anson Resources Ltd (ASX:ASN, OTCQB:ANSNF) has a portfolio of minerals projects in key demand-driven commodities. Its core asset is the Paradox Lithium Project in Utah, USA, which the company is focused on developing into a significant lithium-producing operation
Anson plans to provide high-quality lithium carbonate for the rapidly growing EV battery market using commercially proven direct lithium extraction (DLE) technology. A DFS has confirmed strong project economics, outlined a low-cost, long-life project with material upside to expand lithium production and bromine production.
Meanwhile, the company is planning to drill 24 exploration holes, for around 1,000 metres of drilling at its Yellow Cat Uranium and Vanadium Project in southeastern Utah, aiming to create a JORC resource.