The 8 Best Australian Lithium Stocks to Buy in 2024

The lithium sector on the Australian Stock Exchange (ASX) has had a rough time so far this year due to the declining lithium prices. However, this presents a buying opportunity for investors because the spread of electric vehicles, which use lithium-ion batteries, and other clean technologies will help the prices of the commodity to bounce back, helping lithium stocks recover. Lithium demand is expected to surge in the coming years, reaching as much as 40 times current levels by 2040 under an ambitious scenario to combat climate change, according to a report by the International Energy Agency.

Australia has a unique opportunity to benefit from this trend due to its abundant lithium reserves and established mining infrastructure, according to the consultancy McKinsey.

Lithium companies, including those listed on the ASX, range from established producers to early-stage explorers, all working at various stages of lithium production. Some companies mine hard-rock lithium, while others focus on brine deposits.

Investors are flocking to lithium stocks due to the potential for significant returns. Companies that can successfully capitalise on the projected rise in demand by bringing new projects online or by expanding existing ones are well-positioned for future success.

We have looked at eight Australian lithium stocks with slumping share prices that look like buys in 2024, based on progress with their projects and long-term potential. Read on to see our top picks.

Comparison of the top Australian lithium stocks

Here’s a summary of the most promising Australian lithium stocks to buy at the moment:

Ticker	Company	Performance YTD
ASX: PLS	Pilbara Minerals Ltd.	-21.86%
ASX: LTM	Arcadium Lithium CDI	-55.20%
ASX: MIN	Mineral Resources Ltd.	-22.46%
ASX: IGO	IGO Ltd.	-37.47%
ASX: RIO	Rio Tinto Ltd.	-12.87%
NYSE: ALB	Albemarle Corporation	-34.37%
ASX: WC8	Wildcat Resources Ltd.	-52.51%
ASX: SYA	Sayona Mining Ltd.	-51.43%

An in-depth look at these top Australian lithium stocks

You can help mitigate the built-in risk of investing in lithium stocks with enough research of each stock’s growth potential. All eight of these Australian lithium stocks that we selected have the chance to break out. Let’s take a detailed look at why we think this is so.

1. Pilbara Minerals: 8-year average annualised return of 18.85%

Pilbara is Australia’s largest independent lithium producer and the company’s Pilgangoora mine, located in Western Australia, is the largest hard-rock lithium mine in the world. The mine produces spodumene and tantalite concentrate. The first contains lithium while tantalite, because of its non-corrosive qualities and high melting point, is used in electronics, medical devices and jet engine components.

Unlike many lithium miners, Pilbara is profitable, albeit only since 2022, when the price of lithium shot up. Even as the price of the battery mineral has fallen 69.89% over the last year, the company had 2023 net income of AUD 2.39 billion.

In the first quarter, its revenue fell by 27% quarter over quarter to AUD 192 million, due to a 28% decline in realised price. The bull case for Pilbara is the potential of PIlgangoora. Production at the mine, from 2019 to 2023, had a compound annual growth rate of 37% and now the company is working on multiple expansion projects that it says could double production.

The mine has a current estimated mine life of 34 years. The downside, though, of the expansion, is it will require a new whole of ore flotation plant at the mine, requiring an estimated spend of $1.2 billion. The company is also working with Calix Ltd. on a trial electric calciner technology plant that would produce a lithium phosphate product that would be 18% lithium, up from the current yield of 5% to 6% that is contained in spodumene concentrate.

While sales of EVs have stagnated in the US, Pilbara has long-term deals with several high-ranking Chinese companies, including the nation’s Ganfeng Lithium, Great Wall Motor Company, Yibin Tianyi and General Lithium.

2. Arcadium Lithium: Average 5-year annualised return of -13.08%

The Perth-based company is the result of a US $10.6 billion merger between Allkem and Livent that was completed Jan. 4, creating one of the world’s largest lithium companies with a production capacity of 248,000 tonnes of lithium carbonate per year. It has operations and projects in Australia, Argentina, the UK, Canada, China, Japan and the US, ranging from hard-rock mining, pond-based brine extraction, direct lithium brine extraction and lithium chemicals manufacturing.

Arcadium is a vertically integrated lithium producer, as a miner and a processor of the product. With only one quarter since the merger completed, the miner is profitable, and says there will be $60 million to $80 million in cost savings resulting from the combination of the two companies that will begin to show later in the year. It has also trimmed its global workforce by 11%.

Investors may have to be patient, though, to see significant margin improvements. There are costs associated with the merger and in the first quarter, while revenue was AUD 261.2 million, up 3% year over year, net income fell 82.6% over the same period, to $14.6 million. Also, Arcadium Lithium said it’s planning to spend $1.6 billion to fund expansions through 2026. By the end of 2026, it says it expects to increase total capacity to more than four times the production level of 2023.

One of those capacity enhancements, its Fénix lithium carbonate mine’s 10,000 metric ton expansion in Argentina, is already at full production. Its Olaroz expansion 25,000 metric ton expansion project in Argentina is already producing lithium carbonate, though not yet at full capacity. Two other expansion projects, in Bessemer City in North Carolina in the US, and in Zhejiang, China, are expected to begin producing lithium hydroxide this year. All told, the company said it plans to increase its combined lithium hydroxide and lithium carbonate sales volume by 40% this year.

3. Mineral Resources: Average 10-year annualised return of 19.31%

The Perth-based mining company produces iron ore and hard-rock lithium at its Wodgina and Mount Marion mines in Western Australia. The diversity of the company’s products has helped it keep its head above water even with falling lithium prices.

Mineral Resources is one of the more established Australian lithium companies as it was founded 32 years ago. It’s the largest Australian-owned producer of spodumene concentrate. Since being listed on the ASX in 2006, it has a 33% CAGR in total shareholder returns. It isn’t a pure-play lithium company and therein lies its strength. It’s a top five producer of iron ore in Australia and a top-five global producer of lithium. It also makes money from mining services for other companies.

In the first half of 2024, it saw revenue rise 7% year over year, to AUD 2.514 billion. Its earnings before interest, taxes and depreciation (EBITDA) of $675 million was split between lithium ($271.4 million), iron ore ($266.2 million) and mining services ($253.7 million). It’s also drilling four natural gas wells in the Perth Basin. First-half EBITDA was down 27% year over year, mainly due to lower lithium prices, higher financing costs and additional expenses from a number of expansion projects.

In 2022, Mineral Resources partnered with Albemarle (NYSE: ALB) to begin operations at the Wodgina mine in the Pilbara region of Western Australia to help meet an increased demand for lithium. Mineral Resources is already producing spodumene concentrate at Wodgina and hopes to produce lithium hydroxide by 2027. The company also has a partnership with Chinese company Gangfeng Lithium on its Mount Marion lithium mine in the Kalgoorlie in Western Australia and owns 100% of the Bald Hill lithium mine in the Goldfields region.

4. IGO Limited: Average 10-year annualised return of 2.4%

The Perth-based mining company has several battery metals projects, all in Western Australia, including a joint lithium venture with Chinese mining company Tianqui Lithium in the Greenbushes lithium mine, nickel, copper and cobalt mining and processing at the Nova Operation in Fraser Range, and the Forrestania nickel operation in Kondinin and the Cosmos nickel operation near Leinster.

IGO just suffered through a rough third quarter, with revenue and EBITDA down, but it remains cash positive and it delivers an above-average dividend yield. Its significant presence in other metals besides lithium give it diversification that allows it to be patient for lithium prices to bounce back.

IGO Limited said third-quarter revenue was AUD 160.8 million, down 10% from the previous quarter. It also reported an EBITDA loss of AUD 15 million, a drop of 110% from the first quarter, but an improvement over the AUD20.5 million it lost in the third quarter of 2023. IGO is also seeing increased production of spodumene from the Greenbushes mine, and the company has just under $1 billion in cash.

In the meantime, the IGO’s interim dividend of AUD 0.11 draws a yield of roughly 9.86%. To some, a yield that high may be seen as a flashing danger sign, but the its consistency in paying dividends (it has paid a twice-yearly dividend for 13 consecutive years) allay those concerns. The company remains optimistic with expansion plans set for the Greenbushes and increased production at its Kwinana refinery. It also continues to have strong cash generation from its Nova and Forrestania operations.

5. Rio Tinto: Average 10-year annualised return of 1.21%

The London and Melbourne-based miner produces lithium, iron ore, aluminium, copper, diamonds, and other essential metals and minerals. Rio Tinto is the world’s second-largest minerals and metals mining company behind BHP Group.

Most of Rio Tinto’s operations are in Australia and North America, but it also has mines in 35 countries across six continents. It mines everything from copper to scandium oxide, used to make steel stronger, to lithium, ilmenite, rutile and zircon, aluminium, gold, diamonds, and iron ore. The company has been in business since 1873.

Its lithium mining is still in the project stage, but it appears it will soon get the OK from the Serbian government to develop the Jadar Project, the largest lithium mine in Europe, two years after Serbia called off the project after protests from environmentalists. It is also developing a lithium brine project in the Salta Province of Argentina.

Rio Tinto is increasing its focus on lithium and copper, two key minerals for EVs and their batteries. The company is the world’s largest producer of iron ore, but that mineral has seen its prices drop. As a consequence, Rio Tinto saw half-year earnings decline from $8.63 billion a year ago to $5.7 billion this year. It also cut its interim dividend to $1.77 a share, from $2.67 in 2023. Still, the yield is around 6.54%, well above average.

6. Albemarle Corporation: Average 10-year annualised return of 3.17%

The US miner is Australia’s largest lithium producer and manufacturer with its lithium hydroxide processing plant located at Kemerton in Western Australia. It doesn’t trade on the ASX, but is available to Australian investors on the New York Stock Exchange. The company also has joint venture partnerships in the country, including a 50-50 stake with Mineral Resources in a Wodgina mine, and a 49% stake in a hard rock lithium mine in the Greenbushes with Taison Lithium.

However, Albemarle’s tight focus on lithium makes it more vulnerable to the lagging price of the mineral, which is well below where it peaked in November of 2022. In the first quarter, the company had revenue of $1.36 billion, down 47% year over year. It also had net income of $2.4 million, down 99.8% from the same period a year ago. Those are significant declines, but it’s important to realise it’s a huge company with ample resources and when lithium prices rebound, Albermarle is in great shape to take advantage.

In the meantime, investors can afford to be patient thanks to a quarterly dividend of $0.40, which equates to a yield of around 1.69%. The company has raised its dividend by 123% over the past 30 years.

Albemarle continues to be bullish on lithium, which is why it attempted to buy Liontown Resources for $6.6 billion, though the deal fell through after Gina Rinehart’s Hancock Prospecting bought up enough shares to block the bid.

In the short term it will be beneficial, though, that Albermarle has said it seeks to tighten spending this year by $1.6 billion to $1.8 billion, shelving plans for a fourth lithium hydroxide train at its Kemberton plant.

7. Wildcat Resources Limited: Average 10-year annualised return of 5.08%

Wildcat, a small-cap West Perth-based mineral exploration company has several promising projects, including its Tabba Tabba lithium-tantalum project near Port Hedland in Western Australia, its Bolt Cutter lithium and gold project in the Pilbara region and its Mount Adrah gold project in New South Wales.

This past spring, the company said that at its Tabba Tabba project it had discovered an additional pegmatite deposit (course rock from which lithium can be derived), which was underneath another promising pegmatite discovery, meaning there’s a strong potential for lithium mining at the Tabba Tabba project.

While Wildcat Resources has no revenue yet, the enthusiasm about its Tabba Tabba discovery has lifted the stock more than 200% over its 52-week low, set on June 30, 2023. At the very least, its discoveries will attract larger companies interested in joint ventures, and also opens it up as a potential buyout candidate. In the short term, it said it had AUD 90 million in cash as of the end of March, enough to be patient regarding joint venture or buyout deals.

Still, with no lithium being mined yet, there’s a great deal of speculation related to the stock and it’s not for risk-averse investors.

8. Sayona Mining: Average 10-year annualised return of 30.35%

The Brisbane-based company has gold and lithium projects in the Pilbara region of Western Australia, including a joint project venture there with Morella Lithium (ASX: 1MC) on the Mallina lithium project.

It also has lithium assets in Quebec, including North American Lithium, along with the Authier lithium project and its emerging Tansim lithium project, supported by a partnership with American lithium developer Piedmont Lithium Inc. (ASX:PLL). Sayona also holds a 60% stake in the Moblan lithium project in northern Quebec.

Sayona isn’t profitable. However, it is growing revenue and with plenty of exploration projects in the works, has reason to be optimistic. In June of 2023 it released a report saying its standalone lithium carbonate plant at North American Lithium could be worth as much as $3.2 billion, with the value of a fully integrated mining operation exceeding $5 billion. The company has also seen encouraging lithium deposits at its wholly owned E45/2364 site, just south of Wildcat Resources’ Tabba Tabba mine.

In the first quarter, Sayona had revenue of AUD 58 million, an increase of 152% from the prior quarter, thanks to a 142% growth in concentrate tonnes sold, as well as a 6% average rise in realised selling price for the quarter.

What are ASX lithium stocks?

Lithium stocks are companies that trade on the ASX that are involved in either lithium mining, refining or exploring, or a combination of all three. Lithium is a critical mineral for electric vehicle batteries and other clean energy technologies.

Lithium miners extract lithium from the earth through mining operations. Lithium refiners process raw lithium ore or brine into lithium compounds like lithium carbonate or lithium hydroxide, which are used in battery production. Lithium explorers are companies that are searching for new lithium deposits and haven’t reached the mining or refining stage.

Pros and cons of investing in Australian lithium stocks

Australia has some of the richest lithium deposits in the world, so many mining companies interested in the mineral have a presence in Australia.

The value of the nation’s lithium exports hit a record AUD 19.5 billion last year. The country’s tradition of mining means that the companies based here have an advantage of a solid infrastructure, along with governmental support.

The volatility of lithium prices, however, mean that lithium mining stocks are also likely to fluctuate wildly, making it difficult to understand what a stock’s true price should be. This makes investing in lithium stocks especially tricky in the short term. The price of lithium shot up in 2021 and 2022, but has slumped the past two years.

There’s currently a supply glut with so much new production coming online and that adversely affects lithium stocks. In time, that glut will likely change to a shortage as EV production grows, but that could take years.

ASX lithium stock FAQs

Should I buy lithium stocks in Australia?

Yes, but proceed with caution. The potential of lithium shares in Australia makes it a great long-term investment, but not all lithium stocks will succeed. It makes sense to invest in more advanced companies that have the financial wherewithal to see their projects to fruition and are vertically integrated. Predicting future share price movements takes skill and experience. For those investors who feel comfortable taking a risk, lithium mining stocks that are still at the exploration stage might offer the most upside, but in the long term.

Who are the biggest lithium companies in Australia?

Rio Tinto, with a market capitalization of AUD 168.42 billion, is the biggest lithium mining company that trades on the ASX. After that, it’s a long drop down to Albemarle, with a market cap of AUD 17 billion and Pilbara, with AUD 10.73 billion in market cap.

Why are lithium stocks so popular in Australia?

Part of the reason for their popularity is the expected need for lithium as EV production ramps up globally. On top of that, considering the large deposits of lithium in Australia, the companies with lithium mines in the country have a home-field advantage in terms of regulations. There’s also a point of national pride in investing in an industry that is so crucial to Australia.

Methodology: Choosing the 8 best Australian lithium stocks

There are plenty of Australian lithium stocks that trade publicly on the ASX or elsewhere. However, these eight stocks have a strong history of growth or have made remarkable strides in recent years thanks to the discovery of promising lithium reserves. They also have catalysts that make them good long-term investments.

Learn more about our methodology here

We consider a wide range of factors before choosing the best Australian lithium stocks. We take into account the following:

Stock Performance. One of the key factors we look at is the performance of the stock. Specifically, we want to know if the stock has a history of outperformance, consistently beating its benchmarks over the long term. We generally look back at least 10 years and favour a long-term view.
Revenue growth. We examine how consistent the company has been in generating year-over-year revenue growth. Ideally, we are looking for stocks that are improving the pace of annual revenue growth each quarter.
Production volume and potential: How much lithium does the company currently produce? What is the grade of the lithium deposit (i.e.: how much lithium can be extracted per ton of ore)? How much lithium does the company have in proven and probable reserves? This indicates the potential for future production.
Strength and stability: Mining and particularly lithium mining, is a volatile business. We gave higher marks to companies with strong cash reserves and larger companies that are better situated to handle short-term market swings.
Competitive Advantages. A key to a company’s enduring success is its competitive advantages. We look at whether or not the stock has advantages over its competitors, whether its scale, or mining assets give it advantages that are hard to overcome, including diversification of its revenue sources, such as additional mineral deposits, including copper and gold.
Growth Catalysts. In addition to any competitive advantages, it’s important to look for other growth catalysts that could spur the stock higher. We looked for companies with mines that are seen as having above-average potential.