Global X Lithium fund has outperformed benchmark indexes
Investment surges in mining and processing the metal
A charging plug recharges the Nissan Leaf electric vehicle. Photographer: Mark Elias/Bloomberg
Lithium demand is surging, boosting shares of the companies linked to mining and manufacturing the light metal used in electric-car batteries.
Global X Lithium & Battery Tech, an exchange-traded fund of the 27 biggest companies linked to the light metal, has increased 65 percent in the past 18 months, outperforming stock indexes of all the world’s most-developed economies, according to data compiled by Bloomberg.
“The acceleration in technology, including electric vehicles, could push new metals a lot higher,” said Eily Ong, an analyst at Bloomberg Intelligence who published a model on Wednesday probing the risk-weighted demand for metals including lithium.
Among those most heavily weighted in the Globe X fund are companies including Samsung SDI Co. and Panasonic Corp., which make the lithium-ion cells used in electric-car batteries, and automobile maker Tesla Inc.
Sales of electric cars rocketed to 2 million in 2016 after being virtually non-existent just five years ago. Mainstream carmakers from Renault-Nissan Motor Co. to Volkswagen AG are pushing ahead with emissions-free vehicles.
Manufacturing demand for lithium is feeding orders at mining companies including Sociedad Quimica y Mindera de Chile SA and Albemarle Corp., which also factor among the top 10 holdings at the Global X ETF.
New deposits are being tapped from Australia to Argentina as investors angle to make money from the transition away from fossil fuels and toward a low-emissions lithium-powered economy.
For the remainder of the story from Bloomberg Technology, By Jonathan Tirone, June 22, 2017, 12:00 AM EDT
