Four Australian Lithium Stocks to Expand Your Portfolio

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Jun. 2 2021, Published 1:47 p.m. ET

From an environmental perspective, lithium mining isn't the perfect alternative to oil, but it's an alternative nonetheless. The EV-friendly process still uses loads of water and disrupts the ecosystem where drilling occurs. Despite this, it's still much safer than fracking, and Australian lithium stocks are a target for many international investors (including Elon Musk, who committed to more than $1 billion in lithium battery minerals annually).

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Here are four of the most prominent lithium stocks from Australian companies on the Australian Stock Exchange (ASX).

Pilbara Minerals Limited (PLS) is an Australian lithium stock on ASX.

For investors outside of Australia, Pilbara Minerals also trades on the OTC under the ticker symbol "PILBF."

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The penny stock has grown tremendously over the last year and gained 454 percent in value. The stock landed on the OTC in 2016 and demonstrated marked volatility heading into 2020. However, the growth has been strong since then.

Pilbara owns the entirety of the Pilgangoora lithium-tantalum project in Western Australia. The company's involvement in tantalum is relevant given the material's electric capabilities for various capacitors and high-power resistors.

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Lithium Australia (LIT)

Lithium Australia also trades on the OTC under the ticker "LMMFF." The stock has displayed volatility over the course of its lifetime but expresses a 40 percent return on a trailing six-month basis and a much more impressive 600 percent over the last year.

The stock is extremely cheap on both the OTC and ASX, which adds a layer of risk for the average retail investor. 

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Currently, LMMFF shares are down 58 percent YTD, which could mean a solid entrance opportunity for long-term investors seeking to capitalize on increased lithium demand.

Mineral Resources (MIN)

Mineral Resources also trades on the OTC under the ticker "MALRF." The stock isn't a penny stock and currently trades at a market value of about $36 per share. This differentiates the company from other lithium mining operations in Australia that are trading for less than a penny (like Altura Mining, whose previous close is $0.0045).

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Mineral Resources stock has grown 32.63 percent YTD and 112 percent over the last 12 months. The growth with this stock has been more steady than its competitors, ultimately leading to a 474 percent return over the last five years.

However, there is still volatility in MALRF. The current near-peak value might make some investors pause. They might want to wait for a dip before buying in.

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Australian lithium mining company Wesfarmers (WES) finishes off the list

Wesfarmers also trades on the OTC under the ticker "WFAFY." The ascending trial for Wesfarmers stock is obvious over the last year. This is an indicator of potential growth into the future. The 55.44 percent 12-month returns are enough to invite some investors to buy in, despite the stock's long-term history of volatility.

Overall, the demand for lithium will likely fluctuate in the coming years. The industry isn't immune from ripple-out supply chain woes relating to the semiconductor shortage. Still, there are numerous trading opportunities available to investors hoping to get in on the Australian lithium wave.

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