In afternoon trade, the ASX mining stock is up 13.5% to 64.5 cents.

Why is this ASX mining stock surging?

Investors have been fighting to get hold of the battery materials and technology company's shares following the release of a big announcement.

According to the release, Talga has entered into an earn-in agreement with lithium giant Sociedad Quimica y Minera de Chile S.A. (NYSE: SQM). This agreement is for Talga's Aero Lithium Project in Sweden.

Under the binding agreement, Talga has granted SQM the right to sole fund exploration expenditure of up to US$19 million over the next seven years. This will give the Chilean lithium miner the rights to earn up to a 70% ownership interest in the Aero project. This is subject to Swedish foreign direct investment clearance.

In addition, Talga will also be paid a management fee for each stage of the potential earn-in arrangement, and a success fee if a decision to mine on Aero is made. Talga retains all rights and obligations in relation to graphite minerals within Aero.

The release also notes that SQM has completed extensive due diligence on Aero. This includes site visits, so it clearly likes the look of the project.

And this may not be the only project that the two parties work together on. Under the agreement, they may agree to collaborate on potential new lithium areas and projects in Sweden.

'Aero might be significant'

Talga's managing director, Mark Thompson, notes that the project could be significant for the European market. He commented:

We are delighted to partner with SQM on our Aero lithium project in Sweden, which provides an important chance to build a European lithium supply for the green transition and EU localisation objectives. As one of the few potentially large-scale lithium hard rock opportunities in Europe, Aero might be significant to the region's battery and electric vehicle industry.

This sentiment was echoed by the CEO of the SQM International Lithium division CEO, Mark Fones. He commented:

We are pleased to enter into this agreement, which represents our dedicated efforts to build a global and competitive lithium asset portfolio. Expanding into new and promising jurisdictions, such as Sweden, has been a strategic goal for us, and partnering with Talga, who has demonstrated expertise in the region, further enhances this achievement.

The post Guess which ASX mining stock is rocketing on deal with lithium giant SQM appeared first on The Motley Fool Australia.

In morning trade, the lithium miner's shares are up 12% to 23.5 cents.

What's going on with Core Lithium shares today?

Investors have been scrambling to buy the company's shares this morning despite there being no news out of it.

However, it is worth noting that Core Lithium isn't the only ASX lithium share that is recording a strong gain today. Here's a quick summary of some of the movers and shakers in the industry on Friday:

• Arcadium Lithium (ASX: LTM) shares are up 8%
• Lake Resources N.L. (ASX: LK) shares have also jumped 8%
• Liontown Resources Ltd (ASX: LTR) shares are up 4%
• Piedmont Lithium Inc (ASX: PLL) shares have surged 9%
• Pilbara Minerals Ltd (ASX: PLS) shares are up 4%
• Vulcan Energy Resources Ltd (ASX: VUL) shares are 6% higher

Why are ASX lithium shares rising?

Today's gains by Core Lithium's shares appears to have been driven by a strong night for lithium stocks on Wall Street overnight.

This saw Sociedad Quimica y Mineral de Chile SA (NYSE: SQM) shares jump 8% and Albemarle Corporation (NYSE: ALB) shares rise 4.5%.

The driver of these gains was news that the lithium carbonate price in China climbed to its highest level in almost three months.

According to Reuters, the July lithium carbonate contract jumped as much as 7.5% to 112,250 yuan (US$15,592.66) per metric tonne. This is its highest level since 11 December.

Investors appear to believe that this could be a sign that lithium prices have now bottomed and are on the road to recovery.

However, it is worth noting that SQM has just announced that it plans to push ahead with its lithium expansions despite the market being oversupplied. So, investors may want to keep an eye on lithium prices in the coming weeks and months to see if this is just a temporary recovery or something more sustainable.

The post Why are Core Lithium shares jumping 12% on Friday? appeared first on The Motley Fool Australia.

And what a start they have had!

But firstly, last week, Kali Metals successfully completed its initial public offering (IPO), raising $15 million through the issue of 60 million shares at an issue price of $0.25 per share. This equates to a market capitalisation of $36 million at listing.

The lithium explorer reportedly raised the funds in under half an hour following a heavily oversubscribed IPO that saw investments from the likes of Mineral Resources Ltd (ASX: MIN) founder and managing director Chris Ellison and the family offices for the Myer and Baillieu families.

They appear to see promise in its lithium projects that are primarily in the Pilbara and Eastern Yilgarn regions in Western Australia, but also the Lachlan Fold Belt in Northern-eastern Victoria and Southern New South Wales.

Lithium giant Sociedad Química y Minera de Chile (NYSE: SQM) certainly does. The Chilean miner has earn-in agreements for up to 70% of the company's DOM's Hill Project and Marble Bar Project.

How are Kali Metals shares performing?

Despite most ASX lithium shares falling on Monday, that hasn't stopped Kali Metals shares from shining on their share market debut today.

At the time of writing, the lithium explorer's shares are changing hands for 46.5 cents.

This is 86% higher than its IPO listing price of 25 cents per share and lifts its market capitalisation to approximately $67 million.

Investors appear excited about what might lie beneath the company's tenements, but time (and drilling) will tell if there's something significant under there.

Commenting on the IPO, Kali Metals managing director, Graeme Sloan, said:

It is a great time to become an ASX-listed lithium exploration company with activity in the sector high and the long-term fundamentals for the commodity strong.

With the emergence of lithium as one of the most important critical minerals that will enable the global energy transition, this is an ideal time to provide investors with an opportunity to invest in a company with world-class projects in Tier 1 locations. We are excited about the potential that our project portfolio offers shareholders and the role Kali can play in the future growth of the lithium industry.

The post Kali Metals shares rocket 86% following latest lithium IPO appeared first on The Motley Fool Australia.

This follows the company's successful completion of its initial public offering (IPO).

What is Kali Metals?

Kali Metals will shortly be the latest ASX lithium share to trade on the local bourse.

It is still at the explorer stage of the cycle and has rights to explore for lithium across multiple projects in Australia. These are primarily in the Pilbara and Eastern Yilgarn regions in Western Australia, but also the Lachlan Fold Belt in Northern-eastern Victoria and Southern New South Wales.

The company has close ties with lithium giant Sociedad Química y Minera de Chile (NYSE: SQM). In fact, the Chilean miner has earn-in agreements for up to 70% of the DOM's Hill Project and Marble Bar Project.

The IPO

Kali Metals successfully raised $15 million from its initial public offering through the issue of 60 million shares at an issue price of $0.25 per share. This will give it a market capitalisation of $36 million at listing and an enterprise value of $21.1 million.

Kali Metals shares are scheduled to commence trade on Monday at noon. And given the weakness in the lithium industry at the moment due to falling battery material prices, it will be interesting to see how the market responds to another listing.

Though, the early signs are good. According to the AFR, the IPO was opened and closed in less than 20 minutes and was massively oversubscribed.

Mineral Resources Ltd (ASX: MIN) founder and managing director, Chris Ellison, is understood to have taken a big stake in the company as part of the offering. Other notable names reportedly include the family offices for the Myer and Baillieu families.

The post Rich listers are buying into the IPO of ASX lithium explorer Kali Metals appeared first on The Motley Fool Australia.

It's been a protracted plummet for lithium prices since they peaked in late 2022.

This week, the lithium carbonate spot price dropped to its lowest level since August 2021 at US$13,843 per tonne. That's a more than 80% fall in 2023 alone.

But over the past two days, Chinese lithium giants Tianqi Lithium Corp UP and Ganfeng Lithium Group Co Ltd have made strong gains.

Tianqi shares are up 6.1%. The stock has lost 31% of its value in the year to date. Ganfeng shares rose 6.1% over the two days, and are down by more than 40% in 2023.

US lithium stocks also moved higher over the two days.

NYSE-listed lithium stocks Albemarle Corporation gained 10.7%, Livent Corp went up 11.1% and Sociedad Quimica y Minr de Chile SA rose 6.1%.

Today, ASX lithium shares are also rising, with all the well-known names up by more than 2%.

Here are some examples:

• Core Lithium Ltd (ASX: CXO) shares are up 3.9%
• Allkem Ltd (ASX: AKE) shares are up 3.3%
• Mineral Resources Ltd (ASX: MIN) shares are up 3.1%
• Pilbara Minerals Ltd (ASX: PLS) shares are up 4.1%
• Sayona Mining Ltd (ASX: SYA) shares are up 7.4%
• Liontown Resources Ltd (ASX: LTR) shares are up 2.8%
• IGO Ltd (ASX: IGO) shares are up 2.1%.

The price pain is almost over, says analyst

Lithium prices are weak due to slowing growth in global sales of electric vehicles (EVs). This is leading to lower demand for lithium in China, the world's biggest EV manufacturer.

At the same time, the global lithium mining industry has been ramping up, and as a result, global stockpiles of the white metal have also increased.

But China Futures Co analyst Zhang Weixin said the downward trend in lithium prices is "already nearing an end".

Weixin reckons they are likely to bottom out between US$11,240 and US$12,650 per tonne (courtesy Australian Financial Review (AFR)).

Traxys advisor Wei Xiong agrees but says an extended period of weakness is still likely.

He says he'll be watching to see "whether high-cost mines will exit" if lithium prices get too low to make operations viable.

By the way, investors can find out how much it costs each miner to produce a tonne of lithium in their company reports.

At the recent Liontown Resources annual general meeting, chair Richard Goyder reminded shareholders that the estimated decade-average cost of production at Kathleen Valley was US$475 per tonne.

Thus, they'll still get "a healthy margin" despite the lithium spodumene concentrate price dropping to US$1,590 per tonne.

Goldman Sachs says lithium prices won't bottom till 2025

Top broker Goldman Sachs reckons lithium prices will finally reach a trough in 2025.

The broker recently downgraded its lithium price forecasts again.

It had been tipping US$15,000 p/t for lithium carbonate but is now forecasting US$11,000 p/t.

It was also forecasting US$16,500 p/t for lithium hydroxide but has reduced that to US$12,000 p/t.

The question is whether ASX lithium share investors should care about any of this short-term noise on lithium prices.

After all, this commodity will play a key role in the world's decarbonisation for decades.

The post Is the lithium price pain 'already nearing an end'? appeared first on The Motley Fool Australia.

In morning trade, the lithium industry is a sea of red with heavy declines being recorded across the board.

Here's a summary of how ASX 200 lithium shares are currently performing:

• The Allkem Ltd (ASX: AKE) share price is down 4% to $8.28.
• The Core Lithium Ltd (ASX: CXO) share price is down 10% to 23 cents.
• The IGO Ltd (ASX: IGO) share price is down 3.5% to $7.76.
• The Liontown Resources Ltd (ASX: LTR) share price is down 7% to $1.26.
• The Mineral Resources Ltd (ASX: MIN) share price is down 4% to $57.47.
• The Pilbara Minerals Ltd (ASX: PLS) share price is down 5.5% to $3.34.
• The Sayona Mining Ltd (ASX: SYA) share price is down 7% to 5.2 cents.

Why are ASX 200 lithium shares being sold off?

Today's weakness appears to have been driven by heavy selling in the industry on Wall Street overnight amid falling lithium prices.

Sociedad Química y Minera de Chile SA (NYSE: SQM) was one of the hardest-hit lithium stocks, dropping 8% during last night's session. Fellow giants Albemarle Corporation (NYSE: ALB) and Livent Corp (NYSE: LTHM) weren't far behind with declines of 5% and 5.5%, respectively.

Lithium prices continue to fall

According to a note out of Goldman Sachs, spot lithium prices have continued to fall since last week.

Its latest data has the following spot prices (per tonne):

• Lithium carbonate: US$16,112
• Lithium hydroxide – China: US$13,695
• Spodumene 6%: US$1,460

This means that prices have fallen 5.6%, 6.7%, and 7.6%, respectively, in the space of a week.

They are also now some distance away from their averages during the first quarter of calendar year 2023. At that point, spot prices per tonne were fetching the following per tonne:

• Lithium carbonate: US$63,232
• Lithium hydroxide – China: US$59,190
• Spodumene 6%: US$4,368

Unfortunately, Goldman sees more pain ahead and is forecasting prices to continue to soften in 2024 and 2025.

The post Why are ASX 200 lithium shares crashing today? appeared first on The Motley Fool Australia.

Azure shares are currently trading for $4.03, up 0.25%.

The ASX lithium share has enjoyed a 65% turbocharge since Azure announced a $3.52 per share takeover offer from Sociedad Química y Minera de Chile S.A. (NYSE: SQM) in late October.

Let's see what Ellison had to say.

Azure share price green despite Ellison's comments

As reported in The Australian, Mineral Resources Ltd (ASX: MIN) boss Chris Ellison described the Azure takeover deal as 'dead in the water' yesterday while talking to journalists after the company's annual general meeting.

The ASX 200 mining giant chief said:

From where I'm sitting it looks like it's dead in the water.

If you have a look on the share register, you'll find it's probably about half a dozen different organisations that actually own most of Azure. And I'm not sure if any of those are willing sellers. A couple of them are, maybe. But there's probably three or four in there that are buyers.

Can the Azure takeover still proceed?

There are two parts to the proposed takeover deal from SQM.

The first is a proposed scheme of arrangement whereby SQM acquires 100% of Azure shares and takes over ownership of the company entirely. This deal requires at least 75% of shareholders to agree.

That's very tough to achieve when several individual parties hold large chunks of Azure shares.

In the event that the scheme offer fails to go through, SQM has offered to acquire as many shares as it can from willing shareholders under an off-market takeover deal at $3.50 per share instead.

SQM already owns about 20% of Azure, and if it can get 50.1% acceptance, it would achieve majority ownership. Once again, that may be hard to achieve given the state of the current share register.

The Azure board unanimously recommends the scheme of arrangement, and one major shareholder, Delphi Group, has already committed to supporting the deal unless a superior offer comes along.

Ellison and Rinehart mount strategic buy-ups of Azure shares

A condition of the scheme of arrangement is that no other shareholder acquires a stake higher than 19%.

On the day after Azure revealed the deal, we learned that Gina Rinehart of Hancock Prospecting had quickly amassed an 18.3% stake.

Rinehart had been buying Azure shares since June, but on the day Azure announced the SQM offer, she swooped in and purchased just under $190 million worth of Azure shares. This made her an official 'substantial holder', defined as any individual or company with a 5% or greater stake.

She bought another $21 million parcel of Azure shares the next day to take her total stake to 18.3%.

Ellison did some Azure share swooping of his own.

Mineral Resources had also been buying Azure shares since early October. But he bought a lot more after news of the SQM deal broke. By last Friday, MinRes had amassed a 13.56% stake in Azure.

Rinehart and Ellison have both been buying large stakes in junior lithium explorers of late.

Rinehart bought a 19.9% stake in Liontown Resources Ltd (ASX: LTR) before its proposed takeover by Albemarle Corporation (NYSE: ALB) collapsed.

Meanwhile, Ellison has become the biggest shareholder of Delta Lithium Ltd (ASX: DLI) and recently bought nearly a fifth of Wildcat Resources Ltd (ASX: WC8).

Ellison amassed a total 17.44% stake in Delta back in August. He is now the non-executive chair of the board, with MinRes lithium division CEO Joshua Thurlow also now a director.

Rinehart also owns a chunk of Delta. Mineral Resources is currently underwriting a $70 million capital raising for Delta, with Ellison and Rinehart both set to take up their full entitlements.

As we reported yesterday, one of the key current goals of Mineral Resources is to maximise the potential of its lithium portfolio.

The post Azure share price lifts amid Mineral Resources boss declaring SQM takeover is 'dead in the water' appeared first on The Motley Fool Australia.

Already surging from high-grade lithium intersections found at its West Pilbara lithium project (Andover) in June, Azure shares have rallied since October amid a takeover offer from Sociedad Química y Minera de Chile S.A. (NYSE: SQM) — one of the world's largest lithium miners.

The meteoric rise in Azure Minerals shares has generated a monstrous 1,106% return in the last year, as shown by the chart below.

However, speculation is arising over the potential derailment of SQM's bid, causing some to wonder whether this ASX lithium share could be walking a similar path to Liontown Resources Ltd (ASX: LTR).

Deep pockets buying Azure Minerals shares

Wasting no time, Australian mining magnate Gina Rinehart accumulated a stake in Azure Minerals the day after SQM entered into a binding transaction implementation deed.

Purchased through Hancock Prospecting, Rinehart grabbed ahold of an ~18% stake in Azure on 27 October. The sudden sizeable investment emulated that of the billionaire acquiring roughly 18% in Liontown Resources while being courted by lithium giant Albermarle Corporation (NYSE: ALB) last month.

Then, Mineral Resources Ltd (ASX: MIN) founder and managing director Chris Ellison joined the party last week. Adding another lithium-dipped feather to his cap, so to speak, Ellisons' MinRes gobbled up 12.3% of Azure Minerals shares on 1 November.

In addition, the highly successful Mark Creasy holds nearly a 13% stake in Azure through his Yandal Investments.

When all tallied up, the three billionaires and SQM hold 62.2% of Azure Minerals shares.

What could unfold?

Usually, a takeover — and the sometimes ensuing bidding war — is a boon for the target's share price. That is arguably the case for Azure, with its shares swapping hands at $3.89, a 10.5% premium to the Chilean miner's offer of $3.52 per share.

That being said, it failed to pan out positively for Liontown shareholders due to the 'growing complexities' associated with large stakes held by potentially unaligned parties. The Liontown Resources share price has plummeted 42% following the withdrawal of its takeover bid, as shown below.

For Azure, it may mean the deal evolves into a joint venture between SQM, MinRes, and Hancock Prospecting. Highlighting this option, Commodity Discovery Fund analyst Samson Li recently said:

A joint venture could work well with Mineral Resources' experience in Australia's lithium space and Gina Rinehart's capital.

Alternatively, others speculate it could mean any deal involving SQM is dropped entirely — similar to what occurred between Albermarle and Liontown.

Under the existing agreement, SQM can withdraw from its offer if another party accumulates a stake of 19% or more.

The post Could Azure Minerals shares be walking down Liontown Lane? appeared first on The Motley Fool Australia.

Last week, Rinehart's purchase of a blocking stake in Liontown Resources Ltd (ASX: LTR) scuppered its takeover by Albemarle Corp (NYSE: ALB).

Australia's richest person may now be hoping to do the same with Azure Minerals Ltd (ASX: AZS), which accepted a takeover offer from Sociedad Quimica y Minr de Chile SA (NYSE: SQM) this week.

According to an initial substantial holder notice, Rinehart and Hancock Prospecting have been able to build up a position totalling 81,562,214 Azure Minerals shares. This equates to an 18.3% stake.

The notice reveals that Rinehart has been buying shares for some time, but upped her purchases on Thursday with a $188.9 million transaction. This was then followed by a $21.25 million purchase on Friday.

What's going on?

As with its Liontown purchases, Hancock Prospecting hasn't revealed what its intentions are and is just highlighting the risks involved with project development and its track record. A media release states:

Hancock Prospecting Pty Ltd (Hancock) is pleased to announce that it has acquired a strategic stake of 18% of the ordinary shares (Strategic Stake) in Azure Minerals Limited (Azure). Azure owns 60% of the Andover lithium project in West Australia (Andover). Andover is in its exploration phase, with encouraging results from initial drilling but more work is required to estimate a mineral resource and evaluate its potential. Consistent with early stage projects that are pre-resource, while Andover shows good prospects, it has a long path and significant risks to navigate before its ultimate potential is known. Hancock is an established West Australian company with the capacity to support and expedite development.

Hancock's investment focus is long term. Hancock has a history of successful domestic and international partnerships across resources and agriculture – including at Roy Hill (partnering with POSCO, Marubeni and China Steel), Hope Downs (partnering with Rio Tinto), S. Kidman & Co (partnering with Shanghai CRED) and multiple earlier stage exploration projects with a range of other partners. In each case, those businesses have benefited from the collective skills and expertise of the partners.

Is Azure Minerals' takeover on the rocks?

What this means for the SQM takeover offer, time will tell. But it is worth noting that SQM's $3.52 per share offer is conditional on "no shareholder, other than SQM, acquiring greater than a 19% interest in Azure."

Rinehart isn't far from surpassing this threshold and could easily get there on Monday.

Though, SQM does have a backup, its $3.50 per share off-market takeover, which will need 50.1% acceptance. While this would give it majority ownership, it would need to oust Rinehart if it wanted to make the takeover compulsory.

The post Gina Rinehart takes 18% stake in Azure Minerals appeared first on The Motley Fool Australia.

In morning trade, the lithium explorer's shares are up 44% to $3.52.

Why is the Azure Minerals share price rocketing?

Investors have been scrambling to buy the company's shares today after it announced that it has entered into a binding transaction implementation deed (TID) with Sociedad Química y Minera de Chile S.A. (NYSE: SQM).

Under the TID, it is proposed that SQM will acquire 100% of the shares in Azure Minerals by way of a scheme of arrangement for a cash amount of $3.52 per share.

In addition, there is a simultaneous conditional off-market takeover offer for a cash amount of $3.50 per share should the scheme not be successful.

The scheme consideration is a 44.3% premium to its last close price and values Azure Minerals at $1.63 billion.

It is also a 52.4% premium to SQM's previous proposal of $2.31 per share, which was rejected in August.

Unanimously recommended

The Azure board unanimously recommends the transaction in the absence of a superior proposal and subject to the independent expert's report.

One of Azure's major shareholders, Delphi Group, intends to support the transaction, subject to no superior proposal emerging.

Azure's Managing Director, Tony Rovira, said:

Having carefully considered the merits of the Transaction, the Azure Board has unanimously concluded that the Transaction is in the best interests of Azure shareholders.

Whilst we firmly believe that Andover has the potential to be a major lithium project, there is significant time, cost and risk associated with developing a project of this scale, particularly in the context of an uncertain broader economic outlook. As such, the Board believes that the Transaction provides Azure shareholders with a compelling opportunity to de-risk their investment and realise certain value at an attractive premium to historical trading levels.

Will a better offer be made?

With the Azure Minerals share price trading in line with the takeover offer, it seems that some investors believe a superior proposal could materialise.

However, it is worth remembering that SQM already has a ~20% shareholding in Azure Minerals. This makes it very difficult for anyone else to acquire the company. You only need to look at the collapsed takeover of Liontown Resources Ltd (ASX: LTR) to see why.

The scheme is not subject to any financing or due diligence conditions. However, it will need FIRB approval.

The Azure Minerals share price was trading at 28 cents 12 months ago. Quite a turnaround!

The post Azure Minerals share price jumps 44% on $1.6b SQM takeover deal appeared first on The Motley Fool Australia.

However, this could be a good thing given that the lithium industry is a sea of red this morning.

What's going on with Azure Minerals shares?

Azure Minerals shares were placed in a trading halt this morning at the company's request.

According to the release, the lithium explorer has asked for its shares to be paused from trade until Wednesday 25 October pending the release of an announcement.

That announcement looks set to be big news, with the company revealing that it will be "regarding a potential change of control transaction."

No other information has been provided but this usually means that the company has received a takeover approach.

Who wants to acquire Azure Minerals?

There are two immediately obvious candidates that could be the potential suitor of Azure Minerals.

The first is its joint venture partner at the Andover Project, the Creasy Group. At present, Azure Minerals owns 60% of the project, with Creasy Group owning the balance. Could it be interested in taking full ownership of the project?

However, getting a deal over the line wazould be tricky for the Creasy Group. That's because Azure Minerals has a major shareholder that could do what Gina Rinehart did at Liontown Resources Ltd (ASX: LTR) and effectively block any deal from happening.

That brings us to the second candidate: lithium giant Sociedad Quimica y Minr de Chile SA (NYSE: SQM).

It currently owns a 20% stake in Azure Minerals and previously made an offer to acquire the company back in July. Could it be back with an improved offer?

In August, the company revealed:

[Azure Minerals] confirms that it has previously received expressions of interest from Sociedad Química y Minera de Chile S.A. (SQM) regarding a possible change of control transaction involving Azure, the most recent of which was received by Azure on 12 July 2023 and had an indicative offer price of $2.31 cash per Azure share.

With Azure Minerals shares currently trading at $2.44, an offer somewhere close to the $3.00 mark could be on the table based on the usual premiums.

We'll find out later this week.

The post Azure Minerals shares halted: Is this lithium share about to be taken over? appeared first on The Motley Fool Australia.

In afternoon trade, the lithium miner's shares are down 5% to $10.56.

This latest decline means that its shares are down approximately 36% over the last three months.

Why is the Allkem share price falling today?

Investors have been selling Allkem and other ASX lithium shares today following another poor night of trade for their peers on Wall Street.

Albemarle Corporation (NYSE: ALB), Livent Corp (NYSE: LTHM), and Sociedad Quimica y Minr de Chile SA (NYSE: SQM) all fell ~5% or more and hit 52-week lows during the session.

This has been driven partly by a bearish broker note out of Bank of America, which warned that the lithium market would be oversupplied in 2024 and 2025.

The market appears to believe that this will mean that lithium prices continue to fall and then remain at low levels for the coming years.

Though, regular readers shouldn't find this surprising. I've been warning that lithium prices could crash since the start of the year.

At that point, the lithium spodumene 6% spot price was US$5,990 per tonne and the lithium carbonate spot price was US$66,750 per tonne. At the end of last week, spot prices were US$2,230 and US$20,652 per tonne, respectively.

Is this a buying opportunity?

Goldman Sachs continues to believe that the Allkem share price is great value even though it expects lithium prices to keep falling.

Its analysts have a buy rating and a $15.20 price target, which implies a potential upside of approximately 44% for investors. The broker said:

Allkem has one of the best production outlooks in our lithium coverage, with broad-based growth optionality. This drives our forecast for the company's equity LCE production growth of ~4x over five years to FY28E, supporting earnings rebounding to near current record levels despite the declining lithium price environment.

The post Allkem share price sinks a further 5%: Is this a buying opportunity? appeared first on The Motley Fool Australia.

That's because the lithium explorer has requested a trading halt until Wednesday at the latest.

Why is the Azure Minerals share price halted?

Azure Minerals has requested a trading halt this morning so that it can launch an underwritten $120 million two-tranche institutional placement.

According to the release, tranche 1 of the placement is set to raise approximately $100 million and tranche 2 of the placement, which includes shares subject to shareholder approval, is set to raise approximately $20 million.

Strong support has been received from Azure's major shareholders, Sociedad Quimica y Minera de Chile (NYSE: SQM) and Creasy Group, who have each committed to participate pro-rata in the placement.

SQM currently has a 19.98% shareholding but intends to top-up to 19.99% post-completion of an accompanying share purchase plan (SPP) seeking to raise an additional $10 million.

The release reveals that both the placement and the SPP will raise the funds at $2.40 per new share. This represents a 12.4% discount to where the Azure Minerals share price last traded.

Why is this lithium explorer raising funds?

Azure Minerals advised that the capital raising marks a critical step in the exploration and development of the Andover Lithium Project. It also follows the announcement of multiple broad, high-grade intersections which have confirmed Andover's potential to be a globally significant hard-rock lithium discovery.

Azure's Managing Director, Tony Rovira, said:

Azure is delighted to announce the underwritten institutional Placement, which provides a strong capital base to accelerate exploration and resource drilling at Andover as we advance towards announcing a maiden lithium Mineral Resources targeted in Q1 2024. Additionally, the Placement provides sufficient funding to progress various studies at Andover, including a Scoping Study which is expected be finalised in 2024.

The Placement provides a strong endorsement for Andover as one of the best lithium exploration projects globally, with abundant outcropping mineralised pegmatites and substantial widths of highgrade mineralisation intersected from limited drilling to date. The Company remains incredibly optimistic about the potential scale of Andover and looks forward to realising the full potential of this exciting discovery.

The post Why is the Azure Minerals share price on ice today? appeared first on The Motley Fool Australia.

Lithium explorers that finished in the red included:

• Pilbara Minerals Ltd (ASX: PLS) down 1.59%
• Allkem Ltd (ASX: AKE) down 3.64%
• Core Lithium Ltd (ASX: CXO) down 0.95%
• Mineral Resources Ltd (ASX: MIN) down 3.57%

In contrast, the S&P/ASX 200 Index (ASX: XJO) climbed 0.27% today.

Why did lithium shares have a tough run?

ASX 200 lithium shares appeared to fall after their counterparts in the United States dropped overnight.

Livent Corp (NYSE: LTHM) shares fell 2.12% on the New York Stock Exchange, while the share price of Sociedad Quimica y Minera de Chile (NYSE: SQM) slipped 4%. Albermarle Corporation (NYSE: ALB) shares tumbled 4.13%.

News emerged that Chinese mining company Tibet Summit Resources plans to invest $1.7 billion developing two lithium projects in Argentina.

The two projects in the Salta province could produce 50,000 to 100,000 tonnes of lithium, Reuters reported.

Commenting on the news, Argentina's economy minister Sergio Massa said:

We want a mining industry that takes advantage of our resources and generates added value and employment.

Allkem and Livent are among lithium shares on the market also developing lithium projects in Argentina.

Meanwhile, global research group Wood Mackenzie has released an opinion piece predicting lithium prices to slide over the next decade.

Commenting on this outlook, Wood Mackenzie principal lithium analyst Allan Pederson said:

Going forward, we expect prices to enter a period of controlled decline, settling back to around US$20,000 per tonne by the end of the decade.

The lithium carbonate (99.5% battery grade) price is currently up 0.17% to US$42,344.82 on the Shanghai Metals Market.

Share price snapshot

Pilbara shares have soared nearly 89% in the last year, while Core Lithium shares have slipped 6%.

Allkem shares gained 23%, while Mineral Resources shares are 16% higher.

The post Why did ASX 200 lithium shares slide today? appeared first on The Motley Fool Australia.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market is expected to edge lower this morning following a poor finish to last week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 11 points lower on Monday. In the United States, the Dow Jones was down 0.3%, the S&P 500 dropped 0.15%, and NASDAQ fell 0.25%.

Oil prices fall

It looks set to be a subdued start to the week for ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) after oil prices fell on Friday. According to Bloomberg, the WTI crude oil price was down 0.4% to US$71.55 a barrel and the Brent crude oil price dropped 0.4% to US$75.58 a barrel. Concerns about the US debt ceiling weighed on prices.

ASX 200 lithium shares on watch

There will be plenty of eyes on ASX 200 lithium shares such as Core Lithium Ltd (ASX: CXO) and Pilbara Minerals Ltd (ASX: PLS) on Monday. That's because lithium giant Sociedad Quimica y Minera de Chile (NYSE: SQM) released its first-quarter update on Friday and revealed softer profits. This was due to high stockpiles across the battery supply chain hitting demand.

Gold price charges higher

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a strong start to the week after the gold price charged higher on Friday night. According to CNBC, the spot gold price rose 1% to $1,979.9 per ounce. Renewed banking sector concerns boosted demand for the safe haven asset.

Silver Lake makes new offer

Fellow gold shares St Barbara Ltd (ASX: SBM) and Silver Lake Resources Ltd (ASX: SLR) will also be on watch after the latter improved its takeover offer for the former's Leonora assets. Silver Lake has increased its offer to $722 million. This comprises 327.1 million shares (valued at $352 million) and a cash component of $370 million cash (previously $326 million). The suitor notes that this proposal represents a significant premium to the revised Genesis transaction.

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

Pilbara shares rose 3.28% to close at $4.09. For perspective, the S&P/ASX 200 Index (ASX: XJO) edged just 0.07% higher.

So what boosted the Pilbara Minerals share price today?

What's going on?

Pilbara was not the only ASX lithium share to rise today. Core Lithium Ltd (ASX: CXO) shares gained 3.05%, while Allkem Ltd (ASX: AKE) shares jumped 1.82%.

The S&P/ASX 200 Materials Index (ASX: XMJ) finished the day up 1.1%.

On the New York Stock Exchange, lithium shares Sociedad Quimica y Minera de Chile (NYSE: SQM) rose 0.81% while Livent Corp (NYSE: LTHM) jumped 0.57%. The Albermarle Corporation (NYSE: ALB) share price slipped 0.32% but is up 0.26% in after-hours trade.

Lithium sentiment appeared to be strong on the ASX today. It may have been fuelled by the federal government releasing Australia's "first Electric Vehicle (EV) Strategy" today. Lithium is a key component used in electric vehicle (EV) batteries.

Under the strategy, the government announced efficiency standards on car pollution will be introduced for new cars with the aim of pushing electric vehicle uptake.

Climate Change and Energy minister Chris Bowen said:

This strategy provides the coordination and leadership to drive down costs and improve infrastructure so that we get more affordable and accessible electric vehicles on the market.

The minister also announced $70 million in funding for new EV charging stations in Australia. The funding will be available to businesses, local government, councils, and state and territory-owned corporations.

Currently, Australia's EV sales are "four times lower than the global average".

Also today, the price of lithium fell lower. Lithium carbonate (99.5% battery grade) on the Shanghai Metals market has fallen 3.23% to US$26,189.06.

Conversely, Pilbara shares have risen 8% over the past two days. On Tuesday, UBS upgraded the company's shares to a "buy" with a $4.60 price target. UBS is optimistic lithium prices can rise in the long term, despite a short-term drop in demand.

Share price snapshot

Pilbara Minerals shares have lifted more than 40% in the last year. In the past month alone, the Pilbara share price has gained 11%.

Pilbara Minerals has a market capitalisation of about $12.3 billion based on the latest share price.

The post Why did Pilbara Minerals shares charge higher today? appeared first on The Motley Fool Australia.

Lithium shares in the green include:

• Core Lithium Ltd (ASX: CXO), up 2.3%
• Pilbara Minerals Ltd (ASX: PLS), up 2.22%
• Allkem Ltd (ASX: AKE), up 2.08%
• Lake Resources N.L. (ASX: LKE), up 2.22%

For perspective, the S&P/ASX 200 Index (ASX: XJO) is rising 1.27% today.

Let's take a look at why ASX lithium shares are leaping higher today.

What's going on?

ASX lithium shares appear to be following in the footsteps of their United States peers overnight.

The share price of New York Stock Exchange lithium giant Albemarle Corporation (NYSE: ALB) jumped 2.64% in the US overnight, while Livent Corp (NYSE: LTHM) shares rose 4.22%. Sociedad Quimica y Minera de Chile (NYSE: SQM) shares climbed 1.06%.

This was despite the lithium price sliding again. The Lithium Carbonate Index (battery grade) fell 3.04% to US$31,924.16 on the Shanghai Metals Market, while the Lithium Hydroxide Index (battery grade) fell 3.1% to US$43,538.22.

Lithium hydroxide has also fallen 3.01% on the London Metal Exchange to US$58,100.

Saxo Markets Australia market analyst Jessica Amir, quoted by The Australian yesterday, is positive on lithium long term but noted the sector is a "highly volatile space". She said:

Investors are thinking the reporting season in August might be ugly compared to what it has been.

However, we are bullish long term on lithium.

Share price snapshot

The Core Lithium share price has fallen 31% in the last year, while Pilbara shares have gained 20%.

Allkem shares have slid 15%, while Lake Resources shares have descended nearly 77% in the last 12 months.

The post Why are ASX lithium shares leaping ahead today? appeared first on The Motley Fool Australia.

Core Lithium shares have descended nearly 26% since market close on 2 December and are currently fetching $1.02. For perspective, the S&P/ASX 200 (ASX: XJO) has shed 4% in the last month.

So what has been going on with the Core Lithium lately?

What's impacted Core Lithium in December?

Core Lithium is not the only ASX lithium share that has fallen in the last month. Pilbara Minerals Ltd (ASX: PLS) shares have slid 26% in a month, while Sayona Mining Ltd (ASX: SYA) shares have lost 19%.

Core Lithium shares plunged nearly 30% between market close on 2 December and 28 December before finishing the year on a high.

A bearish note out of Goldman Sachs may have weighed on the company's shares in early December. The broker put a sell rating on Core Lithium with a $1 price target. The commodity team at Goldman predicted lithium prices would start to fall in the second half of 2023. Analysts said:

Our commodity team now expect lithium prices through 1H23 to reflect the near-term tightness and lagging spodumene contract price pass-through before declining over 2H23.

Electric vehicle demand concerns, the performance of US lithium shares, and the lithium price also weighed on ASX lithium shares in December.

The lithium carbonate price descended 15.6% from CNY 562,500 on 1 December to CNY 474,500 on 30 December.

On the US market, Livent Corp (NYSE: LTHM) shares have shed 24% in the last month, while Sociedad Quimica y Minera de Chile (NYSE: SQM) shares have lost 16%.

In positive news for Core Lithium in December, the team at Macquarie lifted its outlook on the Core Lithium share price to outperform with a $1.30 price target on the share price. This implies a 28% upside based on the current share price.

Macquarie is optimistic about the company's ability to generate bumper free cash flow in the 2024 and 2025 financial years.

Core Lithium loaded the first shipment of 1.4% lithium oxide direct shipping ore from the Finniss mine on December 30. The ship containing 15,000 dmt of lithium oxide is bound for China from Darwin. Core Lithium shares soared nearly 6% on this day.

Commenting on this news, CEO Gareth Manderson said:

Core has made good progress during 2022 to transition from a mine developer to lithium producer. In 2023 we will continue this transition and the work required to build a quality operating business."

Core Lithium share price snapshot

The Core Lithium share price has soared 73% in the past 52 weeks.

Core Lithium has a market capitalisation of nearly $1.9 billion based on the current share price.

The post Why has the Core Lithium share price fallen 26% in a month? appeared first on The Motley Fool Australia.

Lithium shares trading lower this afternoon include:

• Piedmont Lithium Inc (ASX: PLL), down 2.87%
• Core Lithium Ltd (ASX: CXO), down 0.76%
• Sayona Mining Ltd (ASX: SYA), down 1.09%
• Pilbara Minerals Ltd (ASX: PLS), down 0.33%
• Liontown Resources Ltd (ASX: LTR), down 2.96%
• Lake Resources N.L. (ASX: LKE), down 2.5%
• Allkem Ltd (ASX: AKE), down 1.14%

For perspective, the S&P/ASX 200 (ASX: XJO) is 0.08% in the red.

What's happening?

ASX lithium shares are broadly underperforming the materials index today. The S&P/ASX 200 Materials Index (ASX: XMJ) is down 0.19% at the time of writing.

On US markets, multiple lithium giants fell overnight. The Livent Corp (NYSE: LTHM) share price tumbled 6.18%, while Sociedad Quimica y Minera de Chile (NYSE: SQM) shares fell 4.72%. The Albemarle Corporation (NYSE: ALB) share price also shed 6.7%.

Speculation on lithium demand from China could be impacting sentiment in the lithium sector.

News emerged that Tesla Inc (NASDAQ: TSLA) could cut electric vehicle (EV) output from its Shanghai plant by more than 20% in December, Bloomberg reported.

But late on Monday in the US, a Tesla spokesperson described the report as "false news", Reuters reported.

Last week, the South China Morning Post reported EV battery production will exceed domestic electric car makers' demand threefold by 2025. EV battery makers are set to lift capacity by six times between this year and 2025, according to the report.

ASX lithium shares that have signed lithium supply agreements with Tesla include Liontown Resources and Piedmont Lithium (the latter of which is not in the ASX 200 but is a constituent of the All Ords).

Core Lithium negotiated with Tesla on an offtake agreement earlier this year. However, the date for concluding the term sheet passed in late October without any final agreement. Core Lithium CEO Gareth Manderson said at the time:

I want to thank Tesla for the time taken to negotiate with Core and look forward to maintaining an open and ongoing dialogue.

The post Why are ASX 200 lithium shares taking a lashing today? appeared first on The Motley Fool Australia.