(Bloomberg) — Investors who bought Australian lithium stocks at the start of the year could have doubled their money or lost more than half of it — reflecting the extreme volatility of companies mining one of the world’s hottest commodities.
Lithium mining is dominated by small and mid-sized firms in Australia, the world’s No.1 producer of the critical electric vehicle battery ingredient. Previously unknown companies have soared in value after striking large deposits of lithium-bearing spodumene, mainly in Western Australia, while others have sputtered on uncertainty.
The sector’s shares offer some of the most volatile returns on the benchmark S&P/ASX 200 Index, according to data compiled by Bloomberg. Liontown Resources Ltd. has surged 105% to lead the Australian gauge in 2023 after spurning three takeover bids in five months from the world’s top lithium producer Albemarle Corp.
Meanwhile, peer Lake Resources NL has plummeted more than 70% after flagging a six-year delay and cost blowouts at a project in Argentina. The nation’s benchmark is up 1.2%.
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