ASX lithium shares have lost some of their appeal in recent times as the value of lithium commodities has declined.
The per-kilogram price for lithium was in the $80s in December before plunging into the mid-$20s in May. (It has been steadily rising since and is now in the low $40s.)
But these fluctuations are a blip on the radar in the greater story of lithium, according to well-respected Australian mining boss Bill Beament.
Image source: Getty Images
Beament buys ASX lithium miner in all-scrip deal
Beament is a legend in Australian mining, having spent 14 years growing gold miner Northern Star Resources Ltd (ASX: NST) from a penny stock to an ASX 200 mega share.
Now, Beament is interested in the global energy transition and is getting into the lithium space through his new company Develop Global Ltd (ASX: DVP).
He's been managing director of Develop Global since 2021 — the year in which he left Northern Star — and owns a 30% stake, according to the Australian Financial Review (AFR).
Develop Global offers mining services and owns copper, zinc, and gold projects.
The company has proposed an all-scrip deal to buy ASX lithium microcap share Essential Metals Ltd (ASX: ESS).
Essential Metals has agreed to the offer, which was announced via the ASX on 3 July.
Among the benefits being sold to Essential Metals shareholders is "becoming part of a rapidly growing energy transition metals producer led by Bill Beament and his experienced team".
Essential Metals owns the Pioneer Dome hard rock lithium project in the Pilbara in Western Australia.
Underground mining and mining services are specialty areas for Beament.
He was general manager of operations at hard rock underground mining services company Barminco for eight years before joining Northern Star in 2007.
The Essential Metals purchase has given Beament a deeper insider's view of the red-hot demand for lithium.
He says chemicals companies, battery makers, and car makers are cold-calling lithium miners — whether they're in production now or not — to secure future supplies.
Beament said:
I hadn't seen this, or heard about this, in my time.
It has not happened since the '60s and '70s, when the Japanese and the Koreans needed steel for their industries and we opened up the Pilbara iron ore district.
This is what's happening now, and I don't think people truly understand what's going on.
The coming lithium bull market is 'frightening'
Develop Global's business model of owning mining assets and offering mining services may sound familiar.
That's because it's the same as ASX 200 lithium share giant Mineral Resources Limited (ASX: MIN).
Mineral Resources is reportedly Develop Global's second-biggest shareholder, by the way.
Not only that, Mineral Resources is also the largest shareholder of Essential Metals with a 19.55% stake.
Mineral Resources has committed to voting in favour of Develop Global's takeover.
Beament is clearly excited about the future prospects for Pioneer Dome. The project is located in Western Australia's 'lithium corridor' south of Kalgoorlie.
Pioneer Dome has a mineral resource of 11.2Mt at 1.16% Li2O.
According to the takeover proposal for the ASX lithium share, a positive scoping study has been completed. A project feasibility study is now underway.
Beament says:
We're in a little bit of a bubble in WA, I see that.
The rest of the market is stuck in the cost-of-living recession, inflation, and so it should be.
But when the world normalises, the commitments that every government has made, every big business, every car company on net zero and transmission of energy holy hell … the structural bull market coming – in copper, zinc, lithium, cobalt, nickel to a degree, rare earths – is just frightening.
Tribeca Investment Partners portfolio manager Ben Cleary says Beament's activities are worth watching.
Cleary says:
Bill has underpromised and overdelivered for the past 20 years.
He has been a great CEO to back as an investor.
The top 5 ASX lithium shares in FY23
The ASX lithium shares with the highest share price growth in FY23 were as follows:
- Liontown Resources Ltd (ASX: LTR) shares up 168%
- Pilbara Minerals Ltd (ASX: PLS) shares up 113.5%
- Allkem Ltd (ASX: AKE) shares up 55%
- IGO Ltd (ASX: IGO) shares up 53%
- Mineral Resources shares up 48% in FY23.
Check out our article explaining why each company did so well here.
My colleague Tony Yoo discusses what's next for ASX lithium shares this year in a recent article.
