Tomorrow Investor

Investors Gambling on Lithium Win Big, Lose Bigger

With lithium still in high demand, it’s not surprising that investors are scrambling to win big by buying stock in both established and emergent lithium mining companies, especially in Australia.

However, the volatile nature of the sector means that while some have hit the jackpot, many have lost bigtime.

Who’s Winning, Who’s Losing

One of the biggest winners in the current lithium gold rush is Liontown Resources Ltd. The company is now in the lead in the Australia gauge, its stock value having risen to around 105%. Indeed, as Liontown’s reputation has been in its ascendant, it has easily fended off possible takeovers by yet another lithium giant, Albemarle Corporation.

But the biggest winner, so far, is Azure Minerals Ltd. The company’s value has skyrocketed by over 1,100% this year and, just last month, it spurned a possible takeover by Chile’s SQM.

On the other hand, Lake Resources NL, which has an initiative to mine at a site in Argentina, is one of the biggest losers. The company’s share value fell after it started running into delays over the six years since it took on the site. The company has also gone over its operational budget due to those delays. 

Volatile Market, Fickle Players

The Australian lithium market is considered one of the most volatile in the world as its key players find their fortunes drastically altered whenever companies announce discoveries, takeovers, or even contract issues.

For the most part, many possible investors just pounce on companies that announce recent discoveries without bothering to know crucial details like the size of the deposit found, how easy or hard it will be to get it out of the ground, or even the quality of the lithium produced from the site. In many cases, this tends to spell trouble in the long run.

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