The rise of electric vehicles has had a profound impact on a number of industries. The switch from internal combustion to EVs means that demand for oil and gas will decline over time, as will demand for some of the parts of internal combustion vehicles that are no longer needed with EVs, such as the engine, drivetrain, and emissions systems.
In addition to reducing demand in certain areas, the burgeoning electric vehicle industry is seeing demand for previously niche products — such as lithium — soar to previously unseen levels. The gradual decline of internal combustion, and the commensurate rise of electric-powered vehicles, is producing demand for lithium and other materials that is enriching the companies that mine those raw materials.
Let’s take a look at three lithium mining stocks that are positioned well for future lithium demand, but also pay regular dividends to shareholders.
Lithium Mining Globally
Lithium is a natural resource that is found in only a few places in the world. The mineral is a critical component of battery production, and given that battery demand is soaring globally due to the rise of EVs, lithium has come into sharp focus in recent years.
Lithium can be mined in three ways, but only two are currently commercially viable. First, lithium can be mined from brine deposits in groundwater. This method is mostly limited to South America, as it is not prevalent in other parts of the world. Second, lithium can be mined from hard rock, which is formed when magma from lava flows cool and harden. This method is more common. Third, lithium is present in clays in certain parts of the world, but this method has not been found to be commercially viable yet.
The mining process of lithium is important because that means only certain areas of the world even have access to lithium, let alone the ability to mine it in large quantities. That helps explain why mining production is quite concentrated, as are global reserves. Commodities like oil or gold tend to have large supply in a variety of places around the world, with many…