10 Best Lithium Penny Stocks to Buy in 2022

If you buy a few lithium penny stocks right now, your investment could grow tenfold. Lithium penny stock companies can be an excellent way to build wealth if used appropriately. These investments have tremendous potential growth. Since the market caps of most of these companies are small, they have a lot of potential to grow.

Vehicles powered by electricity are gaining popularity. As a result, lithium stocks are expected to be profitable. There are now several electric vehicles available on the U.S. market from the most substantial Automobile manufacturers. Many brands are making the jump to all-electric cars. That means batteries are in greater demand.

Moreover, the majority of batteries require lithium. With the increase in battery demand, there will be an increase in lithium demand. Moreover, the all-electric craze does not appear to be ending anytime soon.

Researchers at Meticulous Research conducted a study about electric vehicles. The market will grow 33.6% annually from 2020 to 2027. A lithium penny stock portfolio might be a good fit for you if you like penny stocks.

In this article, you will find out the best lithium penny stocks that you can buy or invest in to make profitable trades by 2022 and beyond. But first, you must know about the lithium penny stocks and why to invest in these types of stocks. Read on to find more about it!

What are Lithium stocks?

Lithium prices have risen by 50% in recent years, and the Global X Lithium and Battery Tech ETF have increased by 30%. Lithium explorers, in general, have been experiencing a decline over the past month, but they have enjoyed strong returns over the past year. Today's article identifies four lithium penny stocks that may soon benefit from increased lithium prices.

Quantum Minerals is an explorer of Lithium in Manitoba based in Canada. Cat Lake, the Company's primary asset, contains historical reserves of 1.2 million tons of lithium oxide grading 1.5%. In November, stock prices increased 320% after the Company announced it had closed a US$1.6M private placement and completed sampling.

Over the last year, the stock of LAC has risen nearly 200%. On the other hand, accumulation may be considered on dips, considering the long-term potential.

Thacker Pass's asset base includes 60,000 tons annual production of lithium carbonate, as well as 46 years of mine life. Additionally, In the future, the asset will generate $520 million in EBITDA per year on average. Based on an 8% discount rate, the project's net present value is $2.6 billion after taxes.

A production capacity of 40k tons per year is among the Cauchari-Olaroz project. An estimated annual EBITDA of $308 million is possible with the project's 40-year life.

Lithium Americas' EBITDA could reach $800 million if these two projects operate. The amount could grow based on the price of lithium. Even though its market capitalization is $3.7 billion, the Company still appears attractive.

In terms of the Company's finances, it had $480 million in cash and equivalents on hand. Earlier this month, the Company disclosed a $225 million convertible note offering. These proceeds will be sufficient to fund project development shortly.

LAC stock is generally a good investment in the long run. The Company's stock is a value creator due to its favorable industry tailwinds and high-quality assets.

Why buy lithium penny stocks?

When a share trades at a penny, it may suggest that investors are not highly satisfied with the Company. Some substantial companies are penny stocks - and perhaps a few more whose business models are yet to be proven. Among the penny stocks in the lithium sector, one in Britain has recently attracted a great deal of interest. Read on to determine whether this is a stock you should consider investing in.

A penny stock named Bacanora Lithium (LSE: BCN) is at issue. Lithium's potential role as an energy source has caught the attention of many investors. In particular, electric vehicle manufacturers like Tesla are keen on getting their hands on it.

There has been a sharp growth in interest in alternative energy sources, and lithium is rising to the top. However, lithium reserves are limited, and the current mining capacity cannot meet projected demand for the foreseeable future.

Bacanora is a solution to this problem. There are several lithium projects in which it has interests, but its most significant project is Mexico. This could potentially be very profitable. The site needs to be prepared for commercial extraction for any mining project to succeed. Mining can only begin at scale then, and investors will calculate whether the Company will extract the metals from the ground as described in its preliminary surveys.

The Bacanora company itself might not be digging any holes in the future. Ganfeng Lithium, a Chinese mining company, is trying to take over the Company. Moreover, Ganfeng already owns a large percentage of Bacanora.

The Company then decided to bid on the remainder. A cash offer of 67.5p apiece for Bacanora shares was accompanied by a quarter share in Zinndwald, a stock on the London Stock Exchange. According to the current Zinnwald share price, that would be worth 5.4p.

In the current market, Bacanora trades very close to the cash offer price, so it seems that the market is discounting the Zinnwald component of the bid as being unimportant. However, regulatory hurdles remain to be overcome. Vanora announced last week that the timetable for the takeover had been extended. It is because the Mexican regulatory approval process was not completed.

Ten best lithium penny stocks to buy in 2022

Three companies used to account for almost 85% of the lithium market in the past - Albemarle, Sociedad Quimica y Minera de Chile (SQM), and FMC. This has changed drastically as more companies entered the lithium market due to increased demand.

Tianqi Lithium and Ganfeng Lithium have become significant players in the lithium market due to China's intent to dominate the market and electrify their governments. McKinsey says that China is only a few country with significant lithium reserves. The country competes with Japan and South Korea for manufacturing electric vehicle batteries.

In addition, FMC has shifted its focus to agriculture products by spinning out and remaining its lithium businesses LIvent Corporation in 2018.

Like other introductory materials and metals producers, lithium investments are not for the faint of heart. No guarantee increasing demand for a given material automatically translates into an increase in sales or profits. A supply shortage can lead to price declines of primary materials, so the material manufacturer's gross sales will be affected if supply exceeds demand.

New lithium projects can be costly, and as with all mining operations, getting them up and running requires significant effort.

Lithium stocks, however, have enjoyed excellent returns over the past five years, and prices have risen. Below are ten of the most profitable lithium stocks.

1. Ganfeng Lithium

Ganfeng Lithium (price $15.2) offers the broadest exposure to the lithium supply chain and enlisted in Shenzen and Hong Kong. Among the four lithium deposits it mines, one is known as Nngdu Ganfent in China, while the other three are Mount Marion, Pilbara, and Altura in Australia.

Ganfeng Lithium price chart

However, it has now diversified into brine and even clay operations in Argentina, Mexico, and Ireland by investing in or partnering with other companies. Additionally, Ganfeng has several lithium carbonates and lithium hydroxide production facilities in China.

A significant selling point of its business is that it produces batteries and recycles and recovers them, thus exposing the entire supply chain. The Company already works closely with battery makers such as BYD and electric car makers like Tesla.

2. Tianqi lithium

The second most crucial Chinese Company is Tianqi Lithium, with a market capitalization of $145.51 billion. Investing in and buying up lithium projects has driven the Company's rapid expansion. Resources are present in Australia, Chile< and China. Additionally, it owns a 51% stake in Australia's Greennushes lithium mine, the largest lithium mine globally.

Tianqi lithium price chart

Additionally, it plans to construct the Kwinana lithium hydroxide plant sourced from Greenbushes. The Company invested over $4 billion in SQM back in 2018, when it took a substantial stake in the Chilean firm.

3. Albemarle

With a market capitalization of $2 billion, Albemarle has long been a leading provider of lithium.

Albemarle price chart

In addition to manufacturing lithium carbonate and lithium hydroxide, the U.S. company operates brine and hard rock mines in Chile, Australia, and the U.S. The Company has an extensive network of processing facilities.

Battery-grade lithium is widely present in European, Australian, Chinese, Chilean, and U.S. plants. While the Company has the main objective on the electric car market, it makes over 100 products that use lithium across various industries.

In addition to lithium, Albemarle also produces catalysts and bromines, which many industries use, including pharmaceuticals and chemical companies. By diversifying, the Company can offset any weak spot in one market, and its income prevails across each division.

Lithium is Albemarle's fastest-growing and highest-margin segment, making it the core of its 'aggressive growth strategy.

4. Sociedad Quimica y Minera de Chile

It has access to vast reserves of caliche and brine in the Atacama Desert, Chile, which allows it to produce a range of commodities. Sociedad Quimica y Minera de Chile is listed in the US but headquartered in Chile. Iodine and nitrate are found in SQM's caliche, while lithium and potassium are present in its brines.

Sociedad Quimica y Minera de Chile price chart

The Company produces lithium brines, and potassium brines with some of the highest concentrations of lithium and potassium found anywhere, as well as boron and sulfate.

As electric vehicles take off, SQM is expecting a spike in demand for lithium, one of the minor parts of its business. As part of the expansion, it will make lithium carbonate and hydroxide in 2021 and increase its production to 120,000 tons. In 2017, Kidman Resources expanded into Australia's challenging rock market under a joint venture.

5. Pilbara Minerals

Its Pilgangoora project, which could contain lithium and tantalum, is operated and owned by Pilbara Minerals (market cap $5.46 billion). Pilgangoora is a hard-rock project that could produce one million pounds of tantalum and 1.2 million tonnes of spodumene per year.

Pilbara Minerals price chart

In addition to its processing, plants also produce tantalite concentrates: the first produces tantalite and spodumene concentrate, and the second produces spodumene only focuses.

As of 2021, Altura lithium was under the Company, and it currently has strategic partnerships with several industry-leading companies, including Jiangxi Ganfeng Lithium, General Lithium, and Great Wall Motor Company.

6. Livent Corporation (LTHM)

Recently, LTHM shares have been experiencing positive momentum. During the last six months, the Company's shares have trended higher by 27%. This trend looks set to continue.

Lithium production by Livent is one of the most cost-efficient pure-play vertically integrated companies. Manufacturers of electric vehicles and batteries worldwide use lithium-ion batteries manufactured by the Company.

Livent Corporation (LTHM) price chart

According to the Company, its current year revenue is likely to reach $400 million (mid-range), and its adjusted EBITDA will rise to $67 million.

There is no doubt that Livent's current lithium carbonate production capacity is considerably larger than its previous capacity. The Company plans to increase capacity to 40,000 metric tons by the end of 2023.

Also, expansion in Argentina will likely increase capacity beyond 2023 to 60,000 metric tons. Over the next upcoming years, it is clear that revenue and EBITDA will grow. In the long term, this should make LTHM stock attractive.

In September, a financial review showed that Livent had 195.3 million dollars in cash and equivalents.

The cash buffer will support near-term expansion plans. A cash flow of $55 million can be produced from operating activities during 2021. The Company will continue to support organic and inorganic growth as cash flows accelerate. The Company's big expansion plans are the catalyst for sustained upside, with LTHM stock being among the top lithium stocks to consider for 2022 and beyond.

7. Romero Power (RMO)

A particular purpose acquisition company (SPAC) brings Romero to investors, a relatively new addition to the lithium penny stock market. Conservative investors should take note of this since it's not necessarily a bad thing. Retail investors can invest in SPACs to take advantage of frothy initial public offerings (IPOs), but SPACs also offer the opportunity to invest in risky firms in their beginnings. That is the case with Romero.

Romero Power (RMO) price chart

Battery Group makes electric truck batteries, but the Company has yet to profit due to its relative youth. A company like Romero operates early, so it's not uncommon, but it adds a layer of uncertainty that investors should consider.

RMO's prospectus and management's projections are the only information we have at the moment regarding its stock. In 2020, the group expected revenue to rise to $5 million, while in 2025, it will be $1.4 billion. In the absence of more information, investors must trust management's predictions.

It may seem that five years is a long time, especially since government support is crucial to the near-term growth of the E.V. market. Romero has potential, however, for those who are willing to endure the ups and downs. It's not the wrong place to start your search for battery stocks - since it may double in the next two to three years.

8. Standard Lithium (SLI)

Using a new processing technology, Standard Lithium will extract lithium from brine. It should reduce the time it takes to remove lithium from brine and the environmental impact known as LiSTR. SLI in southern Arkansas is conducting a flagship project called the Lanxess Project to test its thesis. Short-seller reports recently targeted SLI, which doesn't generate any revenue and doesn't generate any revenue.

Standard Lithium (SLI) price chart

9. Lithium Americas Corporation (LAC)

A Canadian company called Lithium Americas Corporation (LAC) has developed lithium mines in Jujuy, Argentina, and Thacker Pass, Nevada. Los Angeles Coal continues to grow the Argentina mine, which has the world's largest lithium reserve in the U.S. Millennial Lithium Corp, a lithium mine developer in Argentina, was acquired by LAC in November 2021 for $400 million in a bid to increase market share.

Lithium Americas Corporation (LAC) price chart

A 12.5% stake in LAC belongs to the Chinese lithium miner Ganfeng Lithium. Due to the development stage of new projects, LAC does not generate any revenue. It is a highly speculative lithium play, similar to Piedmont Limited.

10. Piedmont Lithium Inc. (NASDAQ: PLL)

Piedmont Lithium Inc. (NASDAQ: PLL) engages in research and development. North American Lithium had completed its acquisition by the end of August as part of a plan to build a lithium production hub in Quebec.

Piedmont Lithium Inc. (NASDAQ: PLL) accounted for $16 million in stakes in the third quarter of 2021, compared to $38 million in the preceding quarter.

Piedmont Lithium Inc. (NASDAQ: PLL) price chart

Final thoughts

A wild ride awaits investors in mining companies that produce chemicals and base materials. According to the market price of the material being mined and sold, stock prices can be volatile and subject to sharp increases and declines. Even though lithium producers can look forward to global battery demand, there will be plenty of volatility along the way.

For a better chance of lessening fluctuation in value, you may want to invest in a lithium ETF, such as Global X Lithium & Battery Tech ETF (NYSEMKT: LIT), or a basket of lithium stocks, such as those listed above. Since lithium production fluctuates, you should only invest in small amounts in this area of mining and chemicals.

Your portfolio could likely benefit from lithium penny stocks. Electric vehicles are gaining in popularity due to government mandates and environmental awareness. Consequently, lithium and batteries are in demand as well. You can invest in 2022 unpredictability by checking out these top 10 lithium penny stocks.