How to Invest in a Big Chinese Lithium Company

Ever since Elon Musk decided to coat the planet with gigafactories, people have been looking to lithium as a possible “picks and shovels” play on related themes like electric cars or home solar units that use large home batteries. Back in August of 2015, we warned our readers about the dangers of lithium junior mining stocks and at the same time pointed out how just 3 mining companies produce 90% of the world’s lithium. At the same time, we created a motif which contained those 3 stocks and here is how it has performed since then:

So these 3 lithium companies returned just over +100% in the past 21 months while the NASDAQ returned just under +21%. We didn’t invest in these stocks because back then, lithium revenues made up just a small proportion of total revenues (kicks rocks…). Here’s how that has changed since then:

  • ALB net income attributed to lithium increased from +5.5% to +27%
  • FMC net income attributed to lithium increased from +2.8% to +10.7%

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