I’m going long lithium, backing billionaires like Elon Musk and Gina Rinehart, but I know I might have to wait a long time to get the big pay-off. That said I know lithium has its issues such as batteries that catch on fire, and it could be threatened by alternative technologies, such as sodium batteries. So, like with many investments, especially speculative ones, there are risks.

Before listing the reasons why I’m going to punt on lithium, let’s look at the heavily shorted miners in this space:

As you can see, all the lithium miners have some supporters that expect big future returns but let’s see how supportive all the analysts are. For Liontown Resources (LTR), five out of five like the company but two only see an 8.7% rise in the year ahead. Only one analyst was surveyed for Sayonara Mining (SYA) i.e., Macquarie and it saw a 125% lift over the year. Two out of three liked Core Lithium (CXO) but Citi saw a 28.7% slip in the share price.

Syrah Resources (SYR) has the most glowing assessment from the experts, with the 127% consensus rise and five out of five analysts rooting for the company. It’s worth having a look at the survey’s table below.

Mineral Resources (MIN) probably is the second most-liked lithium miner with six out of seven on board, with only UBS tipping a 17% slide for the company.

Finally, four out of six analysts support Pilbara Minerals (PLS) with Morgans — up 41.64% — and Macquarie — up 27.48% — having the most confidence in the company’s future. UBS tips a 22% fall while Morgan Stanley thinks it will be more like 19%.

Right now, Pilbara Minerals (PLS) is copping it, as this report from Yahoo.com revealed last week: “Following the downgrade, the consensus from 17 analysts covering Pilbara Minerals is for revenues of AU$1.4b in 2024, implying a stressful 65% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to plunge 78% to AU$0.17 in the same period.”

Clearly SYR looks to have the biggest tick of approval from analysts. This was the assessment from tradingview.com: “The five analysts offering 1 year price forecasts for Syrah Resources Limited have a max estimate of $1.30 and a minimum of $0.595.”

As the AFR’s Elouise Fowler reminds us: “Gina Rinehart, the country’s wealthiest person, bought 19.9 per cent of Liontown Resources for more than $1.3 billion, prompting New York-listed battery chemical giant Albemarle to abandon its $6.6 billion takeover of the lithium developer.”

And she revealed this: “While on the hunt for Liontown shares, Rinehart was also secretly building an 18 per cent stake in Azure Minerals, which places her in the box seat to decide the fate of a $1.63 billion takeover offer for the lithium explorer from Chilean company Sociedad Química y Minera.”

Finally Fowler told us: “Chris Ellison, the chief executive of Mineral Resources, has been busy jockeying for more lithium projects too. He’s spending up to consolidate lithium tenements across WA, a jurisdiction better known for iron ore.”

So, it’s the short sellers versus the analysts and the billionaires, and when it comes to billionaires there’s none wealthier and smarter than Tesla’s Elon Musk, whose biography I’ve been listening to lately.

This is Musk on the mineral: “Lithium batteries are the new oil.”

On his lithium play, I’m thinking:

1. Musk is the smartest guy in the room and has been right too often for us to ignore him.
2. Yahoo Finance tells us that “…his Tesla company is fast-tracking its new lithium refinery on the Texas Gulf coast, a facility that when completed will make Tesla the largest refiner of battery-grade lithium in North America.
3. Tesla “…has committed $365 million to developing the plant, and the planned 2025 production date has now been moved up to the second half of 2024, with the capacity to produce enough battery-grade lithium for 1 million EVs annually,” the Yahoo Finance story informs us.
4. “The market for battery-grade lithium is huge – in addition to EVs, most of our portable electronics, the laptops and tablets and smartphones that we all depend on, use lithium-ion batteries,” the Yahoo analysis explains. “Musk has noted this and described his expanding lithium operation in Texas as a ‘money-printing machine’.”

Right now, I’m inclined towards SYR because of the analysts and LTR because of Gina but MIN’s lack of short-seller interest could be a tip we shouldn’t ignore.

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