3 of the best lithium stocks to buy

I’m searching for the best lithium stocks to buy as demand for electric vehicles rockets. Here are three top UK mining shares I’m considering loading up on today.

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Soaring electric vehicle (EV) sales over the next 10-15 years provides excellent opportunity for share investors. I’m looking to capitalise on the EV boom by finding the best lithium stocks that money can buy.

Lithium is a critical component in the batteries that make EVs run. So increasingly colossal amounts of the element will be needed in the years ahead to meet soaring production of low-carbon vehicles.

Studies suggest that there is huge financial incentive for carmakers to speed up their switch to EVs too, as environmental legislation is steadily tightened. According to thinktank Transport & Environment, operating margins on such vehicles “are expected to reach and surpass those of conventional cars” in the next three-to-five years.

Why I’d buy lithium stocks today

I think buying lithium stocks could be another good option for me as battery production steadily increases. I’d certainly rather buy one of these shares rather than an EV stock like Tesla or NIO. Competition among the autobuilders is intense and is set to increase.

Production levels at EV stocks like these are also tipped to come under pressure if, as some predict, massive lithium shortages occur towards the end of the decade. Conversely, lithium-producing stocks would benefit from a boost to lithium prices if material shortages emerge.

3 top lithium stocks to buy

There are plenty of top lithium stocks for me to choose from today. Here are three UK-listed mining stocks that I’m considering investing in:

#1: Zinnwald Lithium

Zinnwald Lithium is named after a gigantic lithium asset in East Germany where output is due to begin next year. Pleasingly, the project is located on the doorstep of some of the world’s largest automakers like Volkswagen, BMW, and Porsche. This gives it a huge advantage over many other lithium-producing stocks. Remember though that any mine development issues could cause profit forecasts to sink and potentially lead the company to embark on additional fundraising.

#2: Rio Tinto

FTSE 100 stock Rio Tinto is one of the world’s biggest mining businesses. Lithium forms a small part of its operations but Rio is boosting its exposure. This year, it paid $825m for the large undeveloped Rincon project in Argentina. A severe economic downturn in 2022 could smack demand for its industrial commodities, including copper and iron ore, very hard. But I believe Rio could be a great way for me to capitalise on soaring raw materials demand over the longer term.

#3: Atlantic Lithium

I like Africa-focussed Atlantic Lithium following a stream of positive project update. The company’s flagship asset is the Ewooya lithium project in Ghana which has been subject to significant resource upgrades in recent months. In recent days, Atlantic has said it will double the size of its drilling plan there with a view to producing a pre-feasibility study in the third quarter. I’m confident of further excellent newsflow here. Although I’m also aware that any adverse developments could cause its share price to reverse sharply.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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