Lithium has surged into prominence in recent years due to its critical role in powering modern technology. From smartphones and laptops to e-bikes and electric vehicles, the shift toward battery-powered devices has driven a significant increase in global lithium demand. As environmental concerns and regulatory pressures push industries toward cleaner, more sustainable solutions, lithium remains at the heart of this transition. For many investors, this positions lithium as a compelling opportunity with strong long-term return potential.
The demand for lithium is rising rapidly, but its extraction process is complex, and large deposits are mostly concentrated in South America, Asia, and Australia. As a result, the demand is expected to outpace supply, leading to a quick rise in its price.
If you are an investor looking to gain access to lithium as an investment vehicle, there are many different ways to consider it.
The most popular way to invest in 2022 was via ETFs which allowed investors to invest in the entire production chain. From exploration and mining to processing and production.
In 2023, it’s predicted that the most profitable way to invest in lithium will be via initial public offerings in innovative companies such as intergroup mining.
Ways to Invest
If you’re interested in investing in lithium, as discussed above there are a few different ways. You can invest in lithium stocks, lithium ETFs, or lithium futures.
1. Investing in Lithium Stocks
A traditional way to invest in any industry is stocks and shares, lithium is no different. Via the stock market, you can invest in the world’s largest lithium miners, producers and processing companies, such as Albemarle, Livent, and SQM.
As with any investment, it’s very important to do your research and understand the risks involved. Because of production issues, and demand cost fluctuations, the lithium market is volatile. Before finalising a decision on an investment, due diligence and expert advice are absolutely key.
It’s also noteworthy to consider that although large established companies will offer some level of stability, your profits will be levied with their size.
2. Investing in Lithium ETFs
As mentioned in the introduction to this article, a popular way to invest in lithium is to buy shares in a lithium ETF. ETF is an acronym for Exchange-traded fund and is essentially the same as a mutual fund (a fund containing lots of different assets managed by the fund manager) the only difference is that an ETF can be traded on a major exchange.
There are quite a few ETFs that are available, such as the Global X Lithium & Battery Tech ETF (LIT) and the VanEck Vectors Lithium ETF (LIT).
The reason investors turn to ETFs is that they provide benefits that individual stocks do not. Boasting increased diversification, Security and Stability all of which can effectively lower risk.
3. Investing in Lithium Futures
Another investment vehicle for lithium is futures. Futures are contracts that give you the right to buy or sell a certain amount of a commodity at a specified price on a future date. Lithium futures in the United Kingdom are traded on the London Metal Exchange (LME).
Investing in futures carries a lot of risk and before acting on a recommendation to invest in them, its of particular importance that investors fully research and understand the risk.
We asked Nicola Buscall of Market Leader New Capital Link for her take on Lithium futures
“Lithium futures are a unique trading opportunity but in our advice, these carry an unparalleled level of risk, estimating how the price will increase over a predetermined period is a very risky proposition. So many factors contribute to demand and cost, that even the most strategic analysis predicting prices in the future carries an element of, for lack of a better word “gambling”
4. Investing in IPOs
In our opinion, the best balance between profit and security is unrivalled by investing in IPO’S. An IPO is an acronym for Initial Public Offering and refers to when a company makes the change from Private to Public.
The benefit of IPOs is that investors can see all the materials that relate to a company’s profitability, debts & assets. From this information, an investor can ascertain whether or not they feel that a company will have public interest.
We have extensively researched companies with growth potential and our top recommendation for investing in lithium, is mining giant Intergroup Mining which is set to launch its IPO this year.
How demand is increasing for Lithium
Back in 2021 McKinsey & Company conducted a study of the current lithium demand and then compared it to the projected demand for lithium in the year 2030. The graph below is a visual representation of how much demand will grow in the next 7 years.
Lithium presents a compelling investment opportunity, particularly as global demand continues to rise due to its role in electric vehicle batteries and energy storage. However, as with any investment, it’s crucial to understand the risks and conduct thorough research before committing your capital. Fortunately, there are various ways to gain exposure to lithium—allowing you to tailor your investment strategy to your goals and risk profile.
Tips for Investing in Lithium
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Take a Long-Term View
The lithium market is poised for long-term growth, so consider a strategy that allows you to capitalise on future demand rather than chasing short-term gains. -
Diversify Your Portfolio
Avoid concentrating your investment in a single lithium stock, bond, or IPO. Instead, spread your exposure across different asset classes, companies, and stages of the lithium production lifecycle—from exploration to processing. -
Stay Informed
Lithium prices and supply chains can be volatile. Staying current with industry news, technological developments, and geopolitical shifts is key to making informed decisions.
Your Partner in Alternative Investments
At New Capital Link, we specialise in connecting high-net-worth individuals with high-quality alternative investment opportunities. We’ve built a trusted network of clients and providers by recognising the need for a more tailored, professional approach—far beyond the outdated “one size fits all” model.
Our priority is understanding your unique financial goals and risk appetite, allowing us to match you with investment options that align with your long-term strategy.
