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Lithium as an investment becomes a popular alternative investment, making for a viable play on the growing demand for energy efficient technologies. Lithium batteries, much more efficient than traditional nickel-metal hydride ones, are in high demand from the automobile and electronics industries. The element's limited supply is another important aspect making the metal a potentially profitable investment. The estimations of the global market size for lithium-ion batteries range from $26 billion in 2023 (Navigant Research) to optimistic $33 billion in 2019 (Transparency Market Research).
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Metal
Lithium metal is extremely soft, highly reactive, and flammable element. It is most frequently found in deposits such as spodumene and pegmatite minerals, with larger resources in the U.S., Canada, Australia, China, Zimbabwe, and Russia. Lithium possesses a unique chemical profile making it the lightest metal in the periodic table and the least dense solid element. Its atomic number is 3 (right behind helium at 2 and hydrogen at 1), and its density is just 0.53 kg/L. This alkali metal is probably best-known for its wide use in lithium batteries common in all sorts of electronics devices. Other industrial applications include manufacturing heat-resistant glass and ceramics, high-performance alloys used in aircraft, and lubricating greases. Lithium deuteride is used in staged thermonuclear weapons as a fusion fuel. Compounds of lithium are also used as mood stabilizing drugs in psychiatry. The breakdown of the global end-use lithium markets is estimated as follows: ceramics and glass, 31%; batteries, 23%; lubricating greases, 9%; air treatment, 6%; primary aluminum production, 6%; continuous casting, 4%; rubber and thermoplastics, 4%; pharmaceuticals, 2%; and other uses, 15%.
Investment vehicles
Currently, there are a number of options available in the marketplace to invest in the metal. While buying physical stock of lithium is hardly possible, investors can buy shares of companies engaged in lithium mining and producing. Also, investors can purchase a dedicated lithium ETF offering exposure to a group of commodity producers.
Lithium Index
The performance of the global lithium industry is covered by Solactive Global Lithium Index. The index is composed of companies that are primarily engaged in some aspect of the lithium industry such as lithium mining, exploration, and lithium-ion battery production.
Mining companies
There are many companies relying on lithium for a substantial portion of their revenues. Examples include: