Benzinga - by Chris Katje, Benzinga Staff Writer.
Lithium is a metal that has soared in popularity and demand in recent years thanks to its inclusion in electric vehicles.
A disclosure of a new lithium deposit that could be the biggest in the world could be good news for the electric vehicle sector and a company that has rights to the mining area.
What Happened: With electric vehicle sales expected to increase over time and gain market share over traditional automakers, investors may be looking for ways to invest in the growth.
There are multiple ways to invest in electric vehicle growth including stocks and ETFs and one area of focus could be lithium, given its placement in the supply chain.
With more lithium needed to produce more battery-powered electric vehicles, the sector may have gotten great news with the discovery that 20 to 40 million tons of lithium could be contained within a volcanic crater near the Nevada and Oregon border.
This total, reported by Chemistry World, would make the lithium deposit the largest in the world.
The area is not currently mined, with Native Americans contesting mine development according to the report.
Related Link: As Electric Vehicle Transition Charges Higher, This ETF Tracks Lithium
Why It’s Important: Lithium Americas Corp (NYSE: LAC) owns rights to the Thacker Pass mine in Nevada in the region. The company’s geologist Thomas Benson was part of the research team that reported on the new discovery.
Benson said Lithium Americas could begin mining in the region in 2026. The company will remove the clay with water and then separate out the lithium. Benson said the Tacker Pass region is “unique.”
A leading geologist said the discovery could be significant.
“It they can extract the lithium in a very low energy-intensive way, or in a process that does not consume much acid, then this can be economically very significant,” Geologist Anouk Borst said. “The U.S. would have its own supply of lithium and industries would be less scared about supply shortages.”
Tesla CEO Elon Musk highlighted the importance of lithium in a reply to a X, formerly known as Twitter, user who shared the article.
“Lithium ore is quite common throughout the world. The limiting factor is lithium refining,” Musk said. “Refining matters more than ore.”
Lithium Americas has several lithium facilities in the pre-production stages and could become a major player in lithium refining.
The company reported second-quarter financial results in August with earnings per share of 16 cents beating a Street consensus estimate of a loss of 10 cents per share.
Piper Sandler maintained an Overweight rating on the stock and lowered the price target from $33 to $29 after the results.
Investors have several ETFs to choose from that include lithium-related companies including the Global X Lithium & Battery Tech ETF (NYSE: LIT) and the Amplify Lithium & Battery Technology ETF (NYSE: BATT). Lithium Americas Corp is a holding in both ETFs.
LAC Price Action: Lithium Americas shares trade at $19.26, gaining 7% over the past five trading days. The stock has traded between $16.07 and $31.98 over the past 52 weeks.
Read Next: How To Invest In Lithium
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