U.S. lithium miners' shares charge up on likely Biden EV order

Standard Lithium

31/03/2022 19:30

By Ruhi Soni
    March 31 (Reuters) - Shares of U.S. lithium miners climbed
for a second straight session on Thursday, after a report that
President Joe Biden could invoke a law to encourage domestic
production of minerals needed to make electric-vehicle
batteries.
    Albemarle Corp  ALB.N , Livent Corp  LTHM.N  and Lithium
Americas  LAC.N  climbed between 3% and 7%, as the order is
expected to help miners access government funding for
feasibility studies on new projects that extract lithium, nickel
and other EV metals, or to make existing facilities more
productive.
    "By invoking the Defense Production Act, the Biden
administration would presumably be signaling somewhat of a carte
blanche endorsement for the domestic EV and battery materials
sector," said Christopher Kapsch, senior equity research analyst
at Loop Capital.    
    The order could be invoked as soon as this week, but it was
not immediately clear how much funding could be allocated,
according to the report.
    Kapsch believes the order would likely be a bigger benefit
for early-stage lithium miners that have U.S. operations -
including Piedmont Lithium Inc  PLL.O , ioneer  INR.AX , Lithium
Americas Corp  LAC.TO  and Standard Lithium  SLI.V  - as Biden's
order could speed up their production timelines or cut capital
costs.   
    Canada's Standard Lithium gained 11% while Australia's
ioneer Ltd closed 20% higher earlier in the day.
    "The order could lower the costs to build new capacity. It's
unclear if the funds could be used for upstream mining, but at
the very least, it would likely be used for building downstream
conversion capacity," said Seth Goldstein, equity strategist at
Morningstar.

 (Reporting by Ruhi Soni in Bengaluru; Editing by Devika
Syamnath and Sriraj Kalluvila)
 ((Ruhi.Soni@thomsonreuters.com; Twitter: https://twitter.com/ruhithere;))