The first lithium boom peaked in 2016, declined through 2017 and then made another high in 2018 before declining through to 2020. This boom was largely driven by hype around electric vehicles. The market was and is unperturbed that existing lithium resources are huge, USGS estimates reserves and resources are around 55Mt, enough for hundreds of years’ consumption.

A second lithium boom is underway now, commencing around mid-2020. This time it appears to be driven by talk of construction of huge batteries to store intermittent power produced by wind and solar. In 2017 I reviewed 57 companies primarily focused on lithium. I thought it would be interesting to review those same companies three years later.

Of the 57 six no longer exist, having been taken over or removed from the ASX list.  Of the remaining 51 companies only 18 are still involved in lithium. The other 33 have mainly shifted focus to gold as would be expected.

The most successful lithium stock during the period is Liontown Resources Ltd (ASX: LTR). The stock was 1.5¢ in 2017, it is now 27.5¢, a spectacular gain for shareholders. Of the non-lithium plays De Grey Mining Ltd (ASSX: DEG) has shown the most spectacular return: 5.1¢ in 2017, 102¢ now.

The 51 companies had a combined marketcap of $3.6B in 2017, now $8.6B. As would be expected a lot of shares were issued during the period; from 48m in 2017 to 69m now. So, overall a successful few years, helped in the main by a strong gold sector.

02 December 2020 Commodities Tags: , , ,