Standard Lithium Ltd (SLI)

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These Are EV "Pick and Shovel" Plays--SLI

There's a lot of interplay between the EV battery segment and clean energy, and it's not hard to see why; there's a lot of technology in common there. In fact, the two stocks I'm about to recommend would work just as nicely for a clean energy portfolio.

A great deal of that technology is dependent on lithium, a strategic mineral that's going to be in increasingly higher demand because of its battery applications. Lithium batteries have actually been with us for around 30 years or so, and the concept was first floated back in the 1970s, but as you might guess, demand has gone parabolic over the past six years to the point where Statista forecasts global lithium demand will top 378,000 U.S. tons by 2030.

In other words, lots of lithium needs to come out of the ground between now and then. Most of the world's supply comes from Bolivia and China, but it's actually a fairly common mineral; investments in mining new sources and new processing capacity should help do the trick in meeting that demand.

Hence the Standard Lithium Ltd. (NYSE: SLI) recommendation this week. This company is working right here in the United States, in a region mining geologists call the "Arkansas Smackover." Much like an "oilman" will talk about the Marcellus Shale or the Permian Basin, the Arkansas Smackover is a massive porous limestone formation in south central Arkansas – fertile ground for extracting and processing lithium. (Coincidentally, the Smackover has oil reserves, too.) Standard's 150,000-acre Lanxess Project is the largest lithium brine production and processing facility on the entire continent. Standard thinks its project could ultimately be good for 4.4 million U.S. tons of lithium production.



The stock recently started trading on the American Stock Exchange under the ticker SLI, which makes it a too-good-to-pass-up target for big institutional investors who might've given the company a pass when it was listed on the pink sheets.