Top UK Lithium Stocks

China has the world's fastest-growing EV fleet, and the market will need much Lithium. But trade disputes and "de-risking" have seen supply from other sources become increasingly appealing.

A Lithium Powerhouse?

A few days ago, the green power industry got a boost that could support the UK's electric car industry when British Lithium entered a with French miner Imerys to extract Lithium in Cornwall. It would be the first lithium mine and expects to extract as much as 20K tonnes of ore. That would be enough to supply 500K cars per year if it were to proceed. The frustration for investors is that British Lithium is not publicly traded.

The investment in British Lithium - three other UK startups are looking to exploit Lithium on the Isles - is a sign of how the markets are shifting in this key element to make batteries for electric vehicles. The disruption in the energy supply following the war in Ukraine has left many countries looking to "de-risk" exposure to geopolitics that could cause supply problems. As if to underscore that point, as part of its ongoing trade dispute with the West, China recently moved to the export of two rare earth metals crucial for batteries: solar panels and computer chips.

Interesting UK-listed Lithium Firms

Lithium is relatively new to gaining interest among miners, so there is still a chance to get in on the bottom as mining companies jump into the space. Take, for example, Rio Tinto, one of the largest mining companies in the world, which has been buying up lithium mines in Europe and South America over the last two years. Of particular interest is the under-development project in Serbia, which could have the capacity to produce up to 2.3M tonnes of Lithium by 2040, making it one of the largest producers in the world. Rio Tinto's experience and logistics would make it relatively most likely to be successful.

On the other end of the spectrum is Atlantic Lithium, which has holdings of high-quality mining projects in the Ivory Coast and Ghana. The company targets producing 1.4-1.8M tonnes/year over the next decade. It hasn't started selling yet but is backed by US-based Piedmont Lithium, which dropped $102M into the project to speed up production. The partnership also gives Atlantic access to US markets, a significantly larger EV market than the UK. Potential higher returns could offset the higher risk of being a pure-play lithium firm if the project moves into the production phase.

Atlantic Long-term Play Lies in Wedge Pattern

Atlantic Lithium trades 62% below its record high of 67.50 but appears to print a wedge pattern, pending completion. A descending wedge is characterised by three troughs and two peaks, with one trough left exposing the low of 20 and the lower wedge trendline. The completion of the wedge might put a low in, opening the door to the peaks of 37 and 52, which in turn expose the record high in the long term. The short-term play is a potential rejection at 20, with a medium-term extension probability to around 15.

Source: SpreadX / Atlantic Lithium

Key Takeaways

The UK is looking to exploit its lithium resources to support its electric car industry. British Lithium has entered a $3.0B deal with French miner Imerys to extract lithium in Cornwall, the first lithium mine in the UK. This move comes as countries seek to "de-risk" their exposure to geopolitics and secure their lithium supply. Other UK-listed lithium firms include Rio Tinto, which has been acquiring lithium mines in Europe and South America, with a project in Serbia that could become one of the largest producers globally. Backed by Piedmont Lithium, Atlantic Lithium aims to produce 1.4-1.8M tonnes/year in the Ivory Coast and Ghana, gaining access to the larger US EV market.