How to Invest in Battery Metals (Updated 2023)

How to invest in lithium?

Lithium is the lightest metal and the least-dense element that's solid at room temperature. It has skyrocketed in popularity in recent years due to its role in lithium-ion batteries, which are used in electronic devices like cell phones, laptops and, of course, EVs.

Despite being difficult to follow in terms of pricing, interest in the lithium market has been steadily picking up. Experts in the space have highlighted the automotive sector as a major driving force for demand as the EV movement continues to propel the silver-white commodity forward.

Automakers are expected to continue to look for ways to lock down long-term supply of lithium and other important materials used in EV batteries, while investment in the sector continues to be key to ensure global output can keep up with expected demand in the near future.

China is a rising force in lithium production, and outside the major producers, smaller exploration companies are also stepping up to meet rising demand. Dominant names in the lithium space outside the Asian country include powerhouses Sociedad Química y Minera (NYSE:SQM), better known as SQM, and Albemarle (NYSE:ALB).

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How to invest in cobalt?

Cobalt, which is mostly mined as a copper and nickel by-product, is also popular due to its role in lithium-ion batteries. In addition to batteries, this hard, silver-gray metal is used in alloys for jet engines and turbines, along with magnetic steels.

While cobalt prices are no longer at the all-time high they reached in March 2018, experts agree that demand remains strong. In fact, cobalt prices rallied to their highest point since 2018 in 2021, and that strength continued into 2022 as prices climbed in the first half of the year. Although prices have since cooled, issues related to the security of the metal’s supply chain and a lack of investment in cobalt production continue to be key concerns in the space in 2023 and beyond.

The biggest contributor to cobalt supply is the Democratic Republic of Congo (DRC), which holds nearly half of all global cobalt reserves. In 2022, the DRC produced 130,000 metric tons (MT) of cobalt, with Russia following in a very distant second with 8,900 MT; Australia and Canada took the third and fourth spots, respectively.

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How to invest in graphite?

A native element mineral that’s both a form of coal and the most stable form of carbon, graphite is known to be a dry lubricant. As the only non-metal element that’s a good conductor of electricity, it can be used in lithium-ion batteries, as well as in nuclear reactors and the refractory and steel industries.

Much like other battery raw materials, graphite pricing can be finicky since it’s not traded on an exchange. In general, prices have come under pressure in early 2023 due to excess supply, and producers outside China have had to make production cuts to deal with this environment.

In the long term, graphite demand is expected to become more dominated by the battery sector, although it’s worth noting that not all types of graphite can be used in this industry.

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How to invest in vanadium?

Vanadium is predominantly mined as a by-product of other metals and is found in deposits of siltstone, uraniferous sandstone, phosphate rock and titaniferous magnetite. It can also be found in bauxite, coal and crude oil.

The vast majority of this silvery-gray transition metal is used as a steel additive, as vanadium-steel alloys are very tough. That said, the metal is increasingly being used in vanadium redox flow batteries, which are contributing to the reusable energy movement.

While the large size of vanadium redox batteries makes them a better fit for industrial use, they come with the perk of not degrading for at least 20 years. Click here, here and here to read our three part series on vanadium mining and the potential for vanadium redox flow batteries in energy storage.

In 2022, China took the top spot as the world’s biggest vanadium producer at 70,000 MT, with Russia and South Africa coming in second and third at production rates of 17,000 MT and 9,100 MT, respectively.

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How to invest in manganese?

A brittle, hard, gray-white metal, manganese has a similar appearance to iron and can be used in the production of various items, including dry cell batteries, aluminum cans and even fungicides and pesticides.

Overall, the US Geological Survey states that around 85 to 90 percent of global manganese output is used for the production of steel and cast iron.

Manganese also contributes to certain lithium-ion battery chemistries, such as lithium-nickel-manganese-cobalt (NCM) and lithium-manganese oxide batteries. Hopes are high that demand for the commodity will rise in line with others that contribute to new energy sources.

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