It has been a great day for some ASX lithium shares on Monday.
Although the resources sector as a whole is having an off-day, a good number of lithium miners and developers are roaring higher.
Here's a summary of how some of ASX lithium shares are performing today:
- The Core Lithium Ltd (ASX: CXO) share price is up 2.5% to 98 cents.
- The Liontown Resources Ltd (ASX: LTR) share price is up 1% to $2.75.
- The Mineral Resources Ltd (ASX: MIN) share price is up 2% to $80.33.
- The Pilbara Minerals Ltd (ASX: PLS) share price is up 4.5% to $4.21.
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Why are some ASX lithium shares charging higher?
While there has been no news out of these ASX lithium shares today, as we covered here on Friday briefly, there has been some major news in the industry in the last few days.
That news is that the Chilean government plans to create a state-owned lithium company that owns controlling stakes in local lithium producers.
This sent the shares of lithium giants Albemarle Corporation (ASX: ALB) and Sociedad Quimica y Minera de Chile (ASX: SQM) crashing down to earth on Friday on Wall Street.
Bloomberg notes that the government will respect existing arrangements with the two companies, but then move to a state-controlled model once contracts expire in 2030 and 2043, respectively. Alternatively, the two mining giants could opt to give up a majority stake in their operations before then.
So why are some shares rising?
It is worth noting that not all ASX lithium shares are rising today. For example, Allkem Ltd (ASX: AKE) is flat, Lake Resources N.L. (ASX: LKE) is down 4.5%, and Argosy Minerals Limited (ASX: AGY) is down 3.5%.
The difference between these shares and the ones rising above is the location of some of their operations.
The ASX lithium shares that are rising have operations in low-risk jurisdictions, whereas the three listed above all have operations in Argentina.
This appears to indicate that some investors are concerned that Argentina might see what Chile is doing and try to replicate it. In light of this, it may have led some investors to switch out of these shares and into largely Australian-based lithium shares.
