One of the best-performing group of shares on the the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) this year has undoubtedly been the lithium producers. Thanks to an insatiable demand for lithium-ion batteries for use in smart phones and electric cars, a number of lithium producers have doubled in market capitalisation since the turn of the year.

For example the share price of Galaxy Resources Limited (ASX: GXY) is up 321% this year, General Mining Corp Ltd (ASX: GMM) is up 201%, and Altura Mining Ltd (ASX: AJM) is up 194%.

But the company I’m going to focus on today is Orocobre Limited (ASX: ORE). In comparison to its peers it is the laggard of the group with just a 118% gain this year, but it would be my pick of the companies in this rapidly growing industry.

Today the company released its quarterly update. During the quarter 2,971 tonnes of lithium carbonate was produced, which was a 27% increase over the previous quarter and in line with its previous forecast. The company believes the third quarter is going to be even more productive and has forecast production to be between 3,300 and 3,600 tonnes.

This increase in production has been put down to improvements in operating practice, plant optimisation, and process control. Because of these improvements it means the circuit now has a capacity of approximately 40 tonnes per day of purified product.

Within the update management has provided a very positive outlook. It explained that the lithium market continued to tighten during the June 2016 quarter, with robust demand being met by constrained supply.

Thanks to this strong demand and supply side constraints, management expects an average of over US$10,000 per tonne for lithium carbonate to be sustained for some time to come. This is double recent historical levels and gives you an indication as to why the shares have been hot property this year.

It believes this demand will be sustained due to increasing government subsidisation for electric vehicle production and/or purchases, continued production of electric buses in China, the planned release of 25 new electric car models, and strong demand from smart phone, tablet, and laptop manufacturers.

This is clearly a company on the rise and the best option for investors looking for exposure to lithium carbonate in my opinion. But as it is a high risk investment, I feel it would be unsuitable for investors with a low to medium tolerance for risk. For investors that do still wish to invest, I would recommend limiting it to just a small portion of your portfolio.

If Orocobre and its fellow lithium producers are too high risk for your liking, then I would highly recommend taking a look at these three new breed blue chip shares. Each pays a solid fully franked dividend and could provide share price gains in the months ahead in my opinion.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.