Best Lithium Stocks of 2020 on the ASX

The best ASX lithium stocks based on year-to-date gains have been able to weather 2020’s tough conditions for lithium.

Click here to read the previous best ASX lithium stocks article.

The lithium market experienced another interesting year in 2020, with COVID-19 impacting economies around the world and prices continuing to decline through the year.

The Australian Securities Exchange (ASX) had a few battlers though, with five companies not only holding their ground, but experiencing increases in their share prices through the year.

Here, the Investing News Network takes a look at those companies and their year-to-date gains. The list below was generated using TradingView's stock screener on November 16, 2020, and includes companies that had market caps above AU$50 million at that time.


The five companies are listed on the ASX, but have assets across many continents: Australia, the Americas, Africa and Europe. Read on to find out more about each of them.

1. Vulcan Energy Resources (ASX:VUL)

Year-to-date gain: 1,183.87 percent; current share price: AU$1.99

Vulcan Energy Resources is aiming to become the world's first zero-carbon lithium producer for electric vehicle batteries. With a focus on Europe, the company aims to produce the world's first premium, battery-quality, zero-carbon lithium hydroxide by harnessing renewable geothermal energy to drive lithium production without using evaporation, mining or fossil fuels.

Vulcan Energy is developing its deep geothermal and lithium brine resource in the Upper Rhine Valley in Germany. Vulcan will use its unique zero-carbon lithium process to produce both renewable geothermal energy and lithium hydroxide from the same deep brine source.

Vulcan's total combined Upper Rhine Valley project resource is estimated at 16.19 million tonnes of lithium carbonate equivalent at a grade of 181 mg/L lithium in indicated and inferred resources. Ninety percent of that is in the inferred resource category, and the company says is the largest JORC lithium resource in Europe, with further growth potential.

2. Piedmont Lithium (ASX:PLL)

Year-to-date gain: 216.24 percent; current share price: AU$0.37

Piedmont Lithium's flagship project is located in North Carolina, host to the world-class Carolina Tin-Spodumene Belt. Major lithium-focused mining companies such as Livent (NYSE:LTHM) and Albemarle (NYSE:ALB) have longstanding operations in this region.

The company's 2019 scoping study for the project includes a mine and concentrator capable of producing 160,000 tonnes per year of spodumene concentrate and a steady state 22,700 tonne per year lithium hydroxide chemical plant.

In 2020, days after its long-awaited Battery Day, US electric vehicle maker Tesla (NASDAQ:TSLA) signed a binding five year agreement with Piedmont Lithium for the supply of spodumene concentrate from Piedmont's North Carolina deposit.

3. Liontown Resources (ASX:LTR)

Year-to-date gain: 204.60 percent; current share price: AU$0.26

Liontown Resources bills itself as a future Australian lithium producer, with two lithium projects in Western Australia, including its flagship Kathleen Valley project.

An updated prefeasibility study confirms the technical and financial viability of a standalone 2 million tonne per year mining and processing operation at Kathleen Valley, based on an updated ore reserve of 71 million tonnes at 1.4 percent lithium oxide and 130 parts per million tantalum pentoxide.

The ore reserve also underpins a 40 year mine life with average production of 350,000 tonnes per year at 6 percent lithium oxide spodumene concentrate and 430,000 tonnes per year of 30 percent tantalum pentoxide concentrate. The company is now moving onto a definitive feasibility study (DFS) for the project focused on spodumene concentrate production.

4. European Metals (ASX:EMH)

Year-to-date gain: 131.67 percent; current share price: AU$0.69

Dual-listed European Metals is advancing the Cinovec lithium-tin project in the Czech Republic.

According to the company, Cinovec is the largest hard-rock lithium deposit in Europe, the fourth largest non-brine deposit in the world and a globally significant tin resource.

Cinovec hosts a total indicated mineral resource of 372.4 million tonnes at 0.45 percent lithium oxide and 0.04 percent tin, and an inferred mineral resource of 323.5 million tonnes at 0.39 percent lithium oxide and 0.04 percent tin containing a combined 7.22 million tonnes lithium carbonate equivalent and 263,000 tonnes of tin. The company has recently started a measured resource drilling program.

5. AVZ Minerals (ASX:AVZ)

Year-to-date gain: 90.70 percent; current share price: AU$0.08

AVZ Minerals is focused on developing the Manono project, a lithium-rich pegmatite deposit in the south of the Democratic Republic of Congo (DRC) in Central Africa.

A DFS published in 2020 shows a 20 year mine life producing 700,000 tonnes per year of high-grade spodumene concentrate lithium and 45,375 tonnes per annum of primary lithium sulphate. The capital expenditure is estimated at US$545.5 million, which includes a contingency of US$49.59 million.

Aside from its 60 percent interest in the Manono project and a 100 percent interest in the surrounding Manono extension project, the company holds interests in exploration projects prospective for lithium, tin, tantalum and associated minerals in the DRC.

What do you think were the top lithium stocks of 2020? Let us know in the comments below.

Don't forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Priscila Barrera, currently hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Piedmont Lithium is a client of the Investing News Network. This article is not paid-for content.

Featured

Lake Resources Managing Director Stephen Promnitz

Lake Resources (ASX:LKE,OTCQB:LLKKF) Managing Director Stephen Promnitz says Lake Resources has secured robust financing to scale up lithium production in preparation for the electric vehicle revolution.

Lake Resources has recently established a technology and funding partnership with Lilac Solutions, and the latter has announced $150 Million Series B to scale lithium supply for the electric vehicle era.

Lake Resources: Scaling Lithium Supply with $150 Million Series B Funding www.youtube.com

"Lilac Solutions are actually going to work with us and progressively earn into our flagship Kachi project, and then provide $50 million towards the development of that project. So come the end of October, we should have somewhere around $70 to $80 million in the bank, plus this $50 million commitment from Lilac going forward. And then if we have some additional $75 million options in June next year. Essentially, we can now see a pathway to the entire project being financed," Promnitz said.

Lake Resources and Lilac Solutions signed a partnership agreement wherein Lilac is able to achieve an equity stake in the Kachi project with project funding obligations while providing its leading technology to advance the project.

"There's a real deal here, and now value opportunity. But on top of that, we've de-risked it from the debt side and from the equity side. This project is going to happen, and not only that, we're going to be scaling it up to 50,000 tonnes per annum soon after we get into production. That will make us one of the top five producers in the lithium space."

Watch the full interview of Lake Resources Managing Director Stephen Promnitz above.

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Following an increased focus by electric vehicle makers on supply chain sustainability, Lake Resources NL (ASX:LKE,FWB:LK1,OTCQB:LLKKF) is advancing debt funding options for its flagship Kachi lithium project, and Managing Director Stephen Promnitz says the company is charging ahead to address the surge in battery market demand.

Lake Resources Managing Director: Definitive Feasibility Study for Kachi Lithium Project is Underway youtu.be

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LKE:AU

As lithium demand grows, priority will be given to the supply chain that offers the cleanest of clean vehicles and renewable energy storage.

As the world progresses toward a low-carbon future, the demand for battery metals is expected to rise exponentially. According to a GlobalData report, global demand for lithium is expected to reach 117,400 tonnes by 2024, or 625,000 tonnes of lithium carbonate equivalent (LCE).

This large rise in demand over 2020 is driven primarily by a surge in electric vehicles (EVs) powered by lithium-ion batteries. However, not all lithium is mined or refined the same. As the demand for lithium heightens, so does the demand for environmentally friendly extraction technology that meets both present and future needs.

Despite the economic setbacks brought about by the COVID-19 pandemic, 2020 marked what many experts believe will be the decade for lithium and other battery metals. With the EV market growing stronger by the day, the trend of declining lithium prices has all but disappeared, with prices soaring by 51.61 percent since the beginning of 2021. According to Benchmark Mineral Intelligence, the total demand for lithium across all applications is expected to increase to over 400,000 tonnes of LCE in 2021. However, a spike in demand raises a number of environmental concerns regarding the production and processing of critical battery metals, especially lithium and cobalt.

In the wake of Hyundai’s and Chevy’s large-scale Chevy Volt battery recall, the importance of environmental, social and governance (ESG) factors in lithium investing is at an all-time high. ESG investing involves investing in sustainability itself, and can generate positive returns while having a long-term impact on society or the environment.

Keeping up with the rise of the electric vehicle market

More than 2 million battery electric and plug-in hybrid electric cars were sold in 2019. According to recent insights by Wood Mackenzie, the global energy transition will tie together established markets with emerging power sources of the future, culminating in 300 million electric passenger vehicles by 2040, with EV or hybrid vehicles representing 38 percent of all vehicle sales. The rise of the EV market can be reflected by the explosive growth of companies like Tesla (NASDAQ:TSLA), which saw more than a 600 percent increase in its stock in 2020. With a market cap of more than US$800 billion, Tesla is now one of the most influential companies in the world.

With a newly Democratic US government and its recent flurry of climate orders, it has become clear that the future of transportation and energy production is electric. In fact, US President Joe Biden has announced plans to replace the government’s official vehicle fleet with EVs assembled in the US. Over the past year, original equipment manufacturers (OEMs) have invested billions of dollars into the development of new electrified models. As consumers continue to expand past the traditional internal combustion engine to more eco-friendly and forward-thinking technologies, major players in the automotive industry have taken notice, with Ford (NYSE:F) electrifying its iconic Mustang and General Motors (NYSE:GM) planning to release its first-ever electric Hummer. Further, General Motors now plans to produce only electric vehicles by 2035.

Energy storage is experiencing a similar transition. Many industry experts recall when Tesla upgraded South Australia’s energy grid within a mere 63 days, introducing a 100MV lithium-ion battery — the largest of its kind in the world — that is capable of coming to life as the state’s backup power source within less than a second. The renewable mega-battery stabilizes South Australia’s energy grid in the event of unexpected shutdowns of coal-powered plants or wind farms, while also cutting energy costs for South Australian residents. In December 2017, when a major coal generator slipped out of operation, Tesla’s lithium battery prevented a large-scale blackout. It was recently announced that a closed coal mine in the Hunter Valley north of Sydney — the heart of coal mining in Australia — will host the world’s largest lithium ion battery.

The environmental impact of clean energy

Like most batteries, lithium-ion cells rely on raw materials. As major governments around the world introduce a range of policies to promote the uptake of EVs, experts are keeping an eye on what has become a growing mineral crisis driven by environmental and, in the case of cobalt, human rights concerns. One of the primary environmental concerns regarding lithium extraction is the copious amounts of groundwater it requires. In fact, battery production means that manufacturing an EV is 50 times more water-intensive than traditional internal combustion engines. Lithium extraction can also have detrimental effects on the surrounding soil and air quality, often contaminating nearby streams used for livestock and crop irrigation.

By the year 2025, lithium demand is expected to increase to roughly 1.3 million tonnes of LCE — more than five times today’s level. The Volkswagen Group (ETR:VOW3) plans to launch more than 70 electrified models over the next decade, with a host of other automakers having similar goals. Companies like Lake Resources (ASX:LKE,OTCQB:LLKKF) have partnered with technology firms to develop breakthrough direct-lithium-extraction technologies that have demonstrated high purity lithium products and rapid processing times while reducing both costs and its own environmental footprint. The company is aiming to dramatically increase output, with an aspirational target of 100,000 tonnes per year LCE in 2030, to meet the growing lithium demand by relying on direct lithium extraction over its four wholly owned lithium brine projects within the Lithium Triangle — a swath of land responsible for more than 40 percent of the world’s lithium supply.

Similarly, companies like Standard Lithium (TSXV:SLL) are hoping to tap into US domestic lithium resources using their own patent-pending direct lithium extraction processes that leave a significantly smaller carbon footprint compared to conventional evaporation pond processes.

Takeaway

Investors looking to gain exposure in the battery metals sector can still find significant innovation. As the demand for lithium continues to grow, priority will be given to the supply chain that offers the cleanest of clean vehicles and renewable energy storage, while maintaining high quality products. Environmentally friendly extraction technology may bridge the gap between supply and demand by accelerating access to and production from new deposits.

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LKE:AU

Gold isn't all that glitters in the land down under — silver in Australia is a major industry, and the country is home to both large and small players.

When it comes to precious metals, Australia has long punched above its weight — the nation was born riding the wave of a gold rush.

Gold isn't all that glitters through — Australia is also a major global producer of silver. It's among the 10 top producers, and was ranked seventh in 2020, with 1,300 tonnes coming from the many operational mines in the country. By comparison, the world's top producer, Mexico, produced 6,300 tonnes that same year.

Other key players in the silver market are Peru, China and Russia, which produce more silver than Australia, and the US, Argentina and Bolivia, which produce less.


Australia is sitting on quite a lot of the precious metal, with the world's second largest reserves, behind only Peru.

According to Geoscience Australia, one of the country's first mines was a silver-lead mine near Adelaide. Since then, the entire continent has been combed over with a fine-toothed comb, with deposits identified in every state and territory and active mines in every jurisdiction but one (Victoria).

Overall, Australia is well explored when it comes to silver, and since the mid-1800s it's had a constant stream of silver production. Aside from that, the country boasts metals-processing facilities in South Australia that separate the precious metal from its commonly mined counterpart metals, lead and zinc.

Silver companies in Australia

Those looking at the Australian silver market have options. There are plenty of big players with interests in Australian silver, and many smaller players for investors to consider researching too.

Most silver comes from mines dedicated to other metals — Glencore's (LSE:GLEN,OTC Pink:GLCNF) Mount Isa in Queensland produces mainly copper, zinc and lead, but silver is separated by the company's integrated processing streams. Glencore also operates the McArthur mine in the Northern Territory, which is primarily zinc, but between its copper and zinc assets, Glencore produced 7,404,000 ounces of silver in Australia in 2020 — over 200 tonnes.

Elsewhere, BHP (ASX:BHP,NYSE:BHP,LSE:BLT) produces a lot of silver as well at the Olympic Dam operation in South Australia. Perhaps best known for the production of uranium and copper, it also yields significant silver resources to the tune of 984,000 ounces in 2020 (or almost 28 tonnes).

According to Geoscience Australia data from 2016, over 20 mines in Australia produced silver in that year, while there are dozens of other resources identified in each state.

A primary producer of silver is the Cannington mine in Queensland, where South32 (ASX:S32,OTC Pink:SHTLF), a company that was spun off from BHP in 2015, mines silver and lead. Cannington is a big one, producing 11,792,000 ounces in 2020, or 334 tonnes of silver.

Tasmania boasts the Rosebery mine, which has seen 85 years of continuous operations and is currently owned by MMG (ASX:MMG,HKEX:1208). Rosebery, like all the others here, is polymetallic, and besides silver also produces copper, zinc, lead and gold. MMG also has the Dugald River mine in Queensland which also produced silver.

Getting into smaller companies, there are those like New Century Resources (ASX:NCZ) which restarted the Century mine in the Northern Territory for zinc and silver.

The future of silver in Australia

So, you get the picture — there's a lot of silver to be mined in Australia by way of mining everything else.

It's worth noting that because silver operates both as a precious and an industrial metal, and is mined most often alongside base metals, it can be pulled in many directions. However, it traditionally follows (and lags behind) its precious metal sibling, gold, making it a valuable investment commodity to keep an eye on.

Looking forward, the future of the commodity in the land down under — especially given Australia's significant reserves and operator diversity — is as bright as you'd like it, and depends on what investors are most interested in, given the by-product nature of the metal.

Don't forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

Australia took a stand against Facebook and Google earlier this year, and the move could have long-term implications for tech investors.

It was a ban that sent Australians wild and had the whole world watching.

Back in February, Facebook (NASDAQ:FB) stopped users in Australia from posting news in a week-long blackout, reacting to proposed legislation that would have forced the social media behemoth to pay publishers for content.

What prompted Facebook to "friend" Australia again, and what are the potential long-term implications of the squabble? Read on to learn what tech-focused investors in Australia should know about the situation.


Australia squares off against Facebook

On February 25 of this year, Australia's federal government passed the News Media and Digital Platforms Mandatory Bargaining Code. It was developed after extensive analysis by the Australian Competition and Consumer Commission, and is aimed at ensuring that news media businesses are fairly remunerated for their content.

It stipulates that digital platforms such as Facebook and Google (both named in the documentation) must pay news outlets whose content they feature — for example, if content is shared on Facebook or shows up in Google search results. The idea is that this will help to sustain journalism in Australia.

Unsurprisingly, Facebook and Google didn't react well to the code, which was first introduced in 2020.

Google didn't make any moves after it passed, but Facebook quickly made it impossible for Australian users to share news content, and pages for both local and international news organisations went blank — a major concern given the COVID-19 and wildfire concerns that were circulating at the time.

Australian Prime Minister Scott Morrison was scathing about Facebook's decision — which he ironically shared in a Facebook post — declaring the tech giant's actions "as arrogant as they were disappointing." He added, "These actions will only confirm the concerns that an increasing number of countries are expressing about the behaviour of BigTech companies who think they are bigger than governments and that the rules should not apply to them."

Despite strong feelings from both Australia and Facebook, the dispute was resolved fairly quickly, with the country agreeing to make four amendments to the legislation and Facebook restoring Australian's access to news.

Implications for Big Tech and news organisations

Both Australia and Facebook have claimed victory in the dispute, with a Facebook representative saying the company will be able to decide if news appears on the platform — meaning it won't automatically have to negotiate with any news businesses. Changes were also made to the arbitration process.

Tech experts have pointed out that larger news companies may ultimately benefit from the changes, but smaller ones could be pushed to the side. Major publishers that have struck agreements with tech giants, such as News Corp, Nine Entertainment (ASX:NEC,OTC Pink:NNMTF), Seven West Media (ASX:SWM) and Guardian Australia, may be able to increase their market share while smaller independent players lose out.

A business that is in full support of the laws is Microsoft (NASDAQ:MSFT). During the conflict, President Brad Smith came out loudly in favour of Australia's law, and advised that his company is willing to step up with search engine Bing should Google and/or Facebook pull out of the Australian market.

"In Australia, Prime Minister Scott Morrison has pushed forward with legislation two years in the making to redress the competitive imbalance between the tech sector and an independent press. The ideas are straightforward. Dominant tech properties like Facebook and Google will need to invest in transparency, including by explaining how they display news content," he said in a blog post.

"The United States should not object to a creative Australian proposal that strengthens democracy by requiring tech companies to support a free press. It should copy it instead."

Global reach and tech investor impact

Six months down the road from Australia's landmark legislation, it's tough to say what the long-term impact may be.

That said, market watchers do believe the country is part of a new precedent of forcing Big Tech into paying for journalism — something giants Facebook and Google are not used to.

Countries looking to pursue similar legislation include Canada, where Facebook agreed in May to pay 14 publishers to link to their articles on its COVID-19 and climate science pages, as well as other unspecified use cases. Canada is pursuing other avenues too. Meanwhile, in France, Google said it will pay publishers for news content after the country took up new EU copyright laws that make digital platforms liable for infringements.

For investors, the takeaway is perhaps that while companies like Facebook and Google may seem too big too fail, they too can fall subject to new regulations that can change how they do business. As nations around the world look to take back control from these mega companies, it's important to be aware of possible effects on their bottom lines.

Don't forget to follow @INN_Australia for real-time updates!

Securities Disclosure: I, Ronelle Richards, hold no direct investment interest in any company mentioned in this article.

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