Commodity spotlight – Lithium

The surge in lithium prices from 2021 to 2022 saw lithium stocks generate spectacular gains, often regardless of risk, project quality or profit-potential. This period was utopia for many generalist investors, because finding a new, well-marketed lithium stock was generally more important than finding one with the potential to become a mine. However, those frenzied days are over, and in 2023 we are observing some lithium stocks thrive while others stagnate or steadily decline.

As discussed in an earlier issue of Market Insights, the Lassonde Curve is the value cycle for Resources & Energy companies when they progress from Exploration through Development to Production. To successfully progress from Exploration to Production, companies require a project that can get into production within a reasonable timeframe and at a (moderately) low up-front capital cost. For our inaugural issue of the Commodity Spotlight Series, we discuss the three main types of lithium projects: spodumene, brine and lithium-clays. The intention of this document is not to provide a comprehensive review of all styles of lithium deposit. Rather, we review the three main deposit styles and highlight the key features that make some projects better than others.

Alkemy Capital Investments plc (LON:ALK, FRA: JV2) is focussed on developing projects in the energy transition metals sector. Alkemy’s wholly-owned subsidiary Tees Valley Lithium (TVL) is developing a state of the art lithium hydroxide plant at Teesside, UK. TVL is Europe’s largest independent and sustainable lithium hydroxide producer.

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