Commodities: Lithium
Last week, IGO announced the sale of its Nova nickel operation in Western Australia to Global Lithium Resources (ASX: GL1) for just $7 million, comprising $3 million in cash, $2 million in GL1 shares and $2 million in deferred cash. The sale marks IGO’s latest exit from nickel, following the divestment of its Forrestania operations, as CEO Ivan Vella continues to reposition the company towards lithium and copper through exploration and partnerships rather than acquisitions.
We exited our LTR position in our Emerging Companies Portfolio in January; now, 40% lower, it’s back on our radar as a clearly leveraged play on the lithium price. Operationally, LTR is on track to meet FY26 guidance despite 3Q Spodumene production falling 8.5% quarter-on-quarter. With a significantly higher cost of production, this is a more leveraged stock to the underlying Li price – AISC guidance for FY26 was reaffirmed at A$1,060–A$1,295/t, with Q3 FY26 AISC rising to A$1,251/t due to higher royalties and softer production.
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The QRE ETF has corrected by 15% over the past few weeks from its June high, and we would say it’s now in an optimal accumulation phase for investors who don’t want to run the gauntlet of earnings misses, operational issues, etc. However, with the ETF holding ~15% in energy and utilities stocks, we still think picking individual stocks is a better way to go for the moves that we’re targeting.
Albemarle has pulled back sharply from recent highs, bringing the world’s largest lithium producer back into more interesting territory. We previously owned ALB in the International Equities Portfolio, selling at ~$163. While that proved a little early as the stock continued higher, the subsequent retreat to around ~$130 has again put it on our Hitlist.
While AI continues to dominate the headlines, lithium (Li) has quietly emerged as one of the market’s standout performers over the past year, with several lithium stocks outperforming even the biggest AI winners. We remain constructive on lithium’s long-term outlook as battery energy storage joins EVs as a major source of demand, supported by AI data centres, grid upgrades and rising investment in renewable energy.
Elevra Lithium was formerly known as Sayona Mining Limited, rebranding in August 2025. It’s a $2.2bn North American lithium producer dual-listed on the ASX and in the US (NASDAQ: ELVR), with projects in Québec, Canada, the United States, and Western Australia. Like a number of its peers, it was dropped from the ASX200 in March 2024 as the lithium price collapsed – a great example of the trials and tribulations of a cyclical miner.
Pure lithium business Pilbara delivered a solid quarter in April, confirming its operational performance was on track, covered here. What comes next is largely down to the underlying lithium price – not unusual in the cyclical commodities space. We covered the stock in detail on April Fools Day, calling it a buy around the $5 at the time here, but after advancing another 35% to last week’s high, we have to question if the pendulum of risk has swung more in favour of caution.
Mineral Resources has a few different strings to its bow, with its quarterly in April covered here showing no major concerns which has helped the market regain confidence in the miner as it actively addresses its large debt pile. If MIN gets lithium right, they are likely to deliver for investors, but if they get it wrong, the balance sheet leverage that made it dangerous in 2024 comes back into focus. The issue here clearly is that the price of lithium is outside of MIN’s control.
