Why the Lithium Australia (ASX:LIT) share price is up 8% today

This lithium share is rising today…

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The Lithium Australia NL (ASX: LIT) share price is on course to end the week on a positive note.

At the time of writing, the lithium extraction technology company’s shares are up 8% to 13.5 cents.

Why is the Lithium Australia share price climbing today?

The Lithium Australia share price is rising today after the release of an apparently price sensitive announcement.

It is worth noting that the ASX has only recently pulled the company up on an announcement for suspected “ramping”.

The ASX commented that ramping involves the release of “an announcement that has no substance but seeks to ride on the back of strong market sentiment in a particular sector.”

What was today’s announcement?

According to the release, in case you hadn’t noticed, lithium prices are rising strongly. It highlights that Pilbara Minerals Ltd (ASX: PLS) commanded US$2,500 per tonne for its lithium concentrate via its Battery Material Exchange digital auction this week.

In addition, the company notes that the popularity of cobalt-free batteries continues to grow and its subsidiary VSPC is still progressing its plans to establish a strategic position in the market for cobalt- and nickel-free lithium-ion batteries (LIBs).

Management claims that cobalt and nickel-free LIBs are safer, longer-lasting, and require less raw materials. As a result, with lithium prices sky-rocketing, demand for their use in electric vehicles and stationary energy storage is rising.

Lithium Australia’s Managing Director, Adrian Griffin, commented: “To develop renewable energy security, Australia requires a domestic battery supply chain. Pragmatic political policies and government support are a step in the right direction and the Modern Manufacturing Initiative – Collaboration Stream grants will hopefully provide some of that support.”

“The shortage of nickel- and cobalt-free cathode materials outside China is of great concern; however, the possibility of producing such material here in Australia has garnered enthusiastic support – from local miners right through to international battery producers. This country needs to act now, building on its resource base and developing the value-add that can position Australia as a leader in the new energy revolution,” he added.

The Lithium Australia share price has more than doubled in value this year.

Should you invest $1,000 in Lithium Australia right now?

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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