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How to invest and deal in Lithium?

06/03/2023

Lithium is a chemical element mostly mined from brines through a process of evaporation. The commodity has gained in popularity over the last years as a key component of EV batteries. It is also widely used in consumer electronics such as laptops and cell phones.

How to invest and deal in Lithium?

Unlike as for other commodities such as oil, gas, gold, and silver, there are no widely tradeable forward contracts for lithium. Therefore, investors may gain exposure by investing into the two largest companies affiliated with lithium mining. Alternatively, investors might seek an exposure to VC and PE funds that focus on REE.

  • Albemarle: USD 33.9bn market cap, USD 5bn revenue from their lithium business in 2022 (+267% YoY). Besides lithium, the company produces chemicals for the automotive sector, construction and consumer electronics among others.
  • Sociedad Química y Minera de Chile (SQM): USD 29.6bn market cap, USD 0.94bn revenue from their lithium business in 2022 (+144% YoY). Besides the mining business, SQM engages in speciality fertilizers for the agricultural industry.

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