The S&P/ASX 200 Materials Index (ASX: XMJ) has fallen 3.6% in a month, but this ASX lithium share is surging ahead.
The Lithium Energy Ltd (ASX: LEL) share price has soared 44% from market close on 22 April to its intraday high of $1.43 on Tuesday. At the time of writing, it had settled at $1.36, up more than 7% on the day.
Let's take a look at what has been helping this ASX lithium share.
Lithium demand
ASX lithium shares, including Lithium Energy, are rising amid ongoing lithium supply concerns.
Other ASX lithium shares to rise today include Mineral Resources Limited (ASX: MIN), up 2.62%, and Pilbara Minerals Ltd (ASX: PLS), up 4.09%. Meanwhile, the Allkem Ltd (ASX: AKE) share price is 3.85% higher while Liontown Resources Limited (ASX: LTR) is ahead 3.47%.
The surge coincides with a release of a new International Energy Agency Global EV report. It warns while electric car sales are breaking records, mineral supply constraints are looming. The report highlights lithium prices in May 2022 are seven times higher than at the start of 2021.
The report said:
Unprecedented battery demand and a lack of structural investment in new supply capacity are key factors.
The rapid increase in EV sales during the pandemic has tested the resilience of battery supply chains, and Russia's war in Ukraine has further exacerbated the challenge.
Lithium Energy is exploring the Solaroz Lithium Project in Argentina and the Burke Graphite Project in Queensland.
On 9 May, the company advised it is finalising high priority drill targets at the Solaroz project. The company said it aims to define a maiden JORC Mineral Resource of lithium from a 12,000 hectare concession area. The company is conducting passive seismic surveys to find out the depth of the underlying basement rock.
Commenting on the exploration activities, executive chairman William Johnson said:
The commencement of exploration activities on Lithium Energy Solaroz concessions is a very exciting phase in the growth of the company.
In a presentation to a conference in Sydney on 3 May, Lithium Energy highlighted the Solaroz project can be found in the 'prolific' lithium triangle. This is said to be home to the "world's largest reserves of lithium".
Share price snapshot
The Lithium Energy share price has skyrocketed 180% in the last 12 months while it has soared 47% year to date.
In the past week alone, it has surged more than 18%.
For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has climbed 1.44% in the past year.
Lithium Energy has a market capitalisation of about $62 million based on today's share price.
