Top 10 ASX lithium stocks to watch
A brief examination of ASX lithium stocks, their advantages and drawbacks, and a rundown of the 10 best lithium stocks to watch in Australia this year. These stocks are the largest lithium miners on the ASX.
ASX lithium stocks: what you need to know
Lithium is a silvery-white alkali metal with special properties that make it extremely useful in the production of lithium-ion batteries that act as the power source for electric vehicles (EVs).
Because lithium is both the least dense metal and the least dense solid element, it is highly unlikely to be replaced in modern EVs by alternatives such as nickel. While nickel has been used in the past, it has a 40% lower energy density, meaning more of the metal is required to create an EV battery.
However, lithium’s chemical disadvantage is its inherent instability. Lithium is highly reactive and must be stored in an inert atmosphere or vacuum, such as oil. This makes it expensive to produce, transport, and store.
As the Electric Vehicle revolution gathers pace, by dint of the increasingly scarce and costly oil, or because of environmental concerns, lithium mining is likely to become ever more profitable in the long term. Of course, the lithium price fell sharply in 2023 due to several complex factors, including Chinese overstocking and oversupply in the market.
ASX lithium stocks: further important information
The best current alternative to lithium is nickel-based batteries. But lithium batteries charge quicker and have no memory issues, meaning their maximum charging capacity isn’t affected by each charging cycle. Nickel batteries also run hotter and faster, so they usually require a cooling system.
On the other hand, lithium’s instability makes it around 50% more expensive to manufacture lithium batteries, which impacts the cost of an EV. Lithium batteries also typically have a shorter shelf life than nickel batteries before needing to be replaced. And because nickel is more widely used, the metal can already be recycled at a profit.
But fundamentally, lithium is likely to be the metal that will power the EV revolution, unless there is a giant technological leap forward.
To understand the potential the EV revolution has, market leader Tesla’s market cap, while volatile, currently hovers around $900 billion, comparable to the sum of every other auto manufacturer in the world combined. The company produced less than one million vehicles in 2021, while the OICA estimates that 57 million passenger cars were produced in total.
Indeed, in the past, CEO Elon Musk has likened lithium mining to ‘minting money,’ and has hinted at plans to start his own lithium company to gain some control of the supply chain.
The global shortage pushed lithium prices beyond record levels in 2022, threatening to arrest its so far rapid growth. However, prices fell sharply back in 2023 as supply caught up, Chinese demand faltered, and the world teetered on the brink of global recession.
According to the International Energy Agency (IEA), the number of EVs produced more than doubled in 2021 to 6.6 million. Analysts expect lithium demand to increase tenfold by 2030, as legislation prohibiting the manufacture or sale of internal combustion engine (ICE) cars in the future is being passed across vast swathes of the world, including in the EU, UK, USA, and even China.
Currently, China controls 80% of battery cell production and maintains a market-leading position in lithium refining. The war in Ukraine, combined with the Shanghai pandemic lockdown, has forced companies worldwide to examine the strength of supply chains and perhaps pay more for higher security of supply.
In March 2023, ex-US President Joe Biden invoked emergency Presidential powers under the Cold War-era 1950 Defence Production Act. The aim was to increase production of key metals, including lithium, ‘to reduce our reliance on China and other countries for the minerals and materials that will power our clean energy future.’
Further demand is likely to be sparked by the recently passed Inflation Reduction Act, which offers $370 billion in investment in clean energy, including extending the $7,500 consumer income tax credit for the purchase of a new electric vehicle (EV) and eliminating the per-manufacturer limit on these tax credits.
One concern about lithium is that it is relatively abundant worldwide. However, supply is restricted for two reasons. The first is that lithium needs to be concentrated enough to be worth mining, and exploratory projects are often expensive with a high failure rate.
The second is that lithium is difficult and time-consuming to mine, with new mines taking up to ten years to begin extraction. While corporations worldwide are attempting to establish their own mining and processing operations, the demand for lithium is likely to outpace the supply ramp-up. The IEA estimates that demand for lithium will rise by 900% by 2030, and by 4,000% by 2040.
Of course, lithium prices are as volatile as the metal itself. For example, a recent influencing factor is China's ‘zero-COVID’ strategy, which has led to the halt of lithium processing in some areas of the country, forcing EV manufacturers like Tesla to suspend factory production at times. Indeed, China has promised a crackdown on illegal mining, which could lead to prices rising again, with analysts predicting that up to 10% of global production could be affected.
Finally, there are multiple ways to invest in ASX lithium stocks. It’s worth noting that lithium is mined from three types of deposits: brine, pegmatite lithium and sedimentary, with Australia accounting for the majority of the sedimentary lithium worldwide. Many lithium investors prefer to invest across all three types.
More broadly, many investors opt to purchase shares in a diversified miner like Rio Tinto to gain exposure to lithium while mitigating overall risk. Of course, this cuts both ways, with diversified miners unlikely to fully benefit from any future price rise. While most of the stocks on this ‘top 10’ list are large-cap miners, with the potential for share price hikes in the long term with rights to exclusive projects, small-cap lithium stocks can be more lucrative, despite carrying more risk.
Overall, pure-play ASX lithium stocks are exciting long-term prospects for the adventurous investor.
Best 10 ASX lithium stocks to watch
The following ten shares represent some of the largest lithium miners on the ASX. The stocks are listed by market cap, from largest to smallest. Although the final stock has a considerably lower market cap than the others, it’s worth keeping an eye on, as it has attracted significant investor interest.
Remember, past performance is not indicative of future returns.
Resource Mining Corporation (ASX: RMI)
Resource Mining Corporation is an Australian minerals exploration company focusing on battery minerals, including lithium and nickel.
The company holds six projects in Tanzania and two in Finland, with the Kola and Hirvikallio projects in Finland targeting lithium mineralisation. In May 2025, RMI raised $2 million to accelerate exploration at its Mpanda Copper-Gold Project in Tanzania.
Investors might find RMI appealing due to its diversified portfolio across multiple jurisdictions and its focus on critical battery minerals, positioning the company to benefit from the growing demand in the electric vehicle and renewable energy sectors.
Market cap: $20.56 million
Forrestania Resources (ASX: FRS)
Forrestania Resources is engaged in mineral exploration, focusing on gold, lithium, and nickel in Western Australia.
The company’s flagship Forrestania Project is located near the Mt Holland Lithium Mine. In September 2023, Forrestania announced plans to drill at the Breakaway Dam area, targeting lithium mineralisation.
The company’s strategic location in a known lithium-rich region, combined with its active exploration efforts, makes it a noteworthy contender for investors interested in emerging lithium opportunities.
Market cap: $25.36 million
Trek Metals (ASX: TKM)
Trek Metals is a mineral exploration company with a focus on lithium and rare earth elements.
The company is advancing its Tambourah Lithium Project in Western Australia’s Pilbara region. In June 2023, Trek commenced a maiden drilling program at Tambourah, supported by a $7.5 million capital raise.
Trek’s proactive exploration approach and recent capital infusion position it well to capitalise on the growing demand for lithium, essential for electric vehicle batteries and energy storage solutions.
Market cap: $38.72 million
DY6 Metals (ASX: DY6)
DY6 Metals is an exploration company targeting critical metals, including lithium.
The company has entered into an option agreement to acquire an 80% interest in the Karonga Lithium Project in Malawi. Additionally, DY6 has identified high-grade gallium mineralisation at its Tundulu Rare Earth and Phosphate Project in Malawi.
With its focus on critical minerals and recent high-grade discoveries, DY6 offers investors exposure to essential components of modern technology and renewable energy systems.
Market cap: $7.31 million
Verity Resources (ASX: VRL)
Verity Resources is an exploration company focusing on precious and critical metals.
The company holds interests in lithium projects in Brazil, including the Pimenta Project, where recent sampling has revealed high-grade rare earth elements and gallium.
Verity’s diversified portfolio and recent high-grade discoveries position it as a compelling option for investors seeking exposure to critical minerals essential for the clean energy transition.
Market cap: $8.02 million
MTM Critical Metals (ASX: MTM)
MTM Critical Metals is developing technology for the recovery of critical metals, including lithium.
The company is establishing a facility in Texas to utilise its flash joule heating technology for efficient metal extraction.
MTM’s innovative approach to metal recovery and its strategic positioning in the U.S. market make it an attractive prospect for investors interested in sustainable and efficient extraction technologies.
Market cap: $169.71 million
Somerset Minerals (ASX: SMM)
Somerset Minerals is a mineral exploration company with interests in base metals.
The company has entered into an agreement to acquire the Prescott Project in Nunavut, Canada, focusing on copper and base metals.
While primarily focused on base metals, Somerset’s strategic acquisitions in mineral-rich regions may offer potential opportunities in the evolving landscape of critical minerals exploration.
Market cap: $10.15 million
Elementos (ASX: ELT)
Elementos is primarily focused on tin exploration and development.
In May 2025, Metals X increased its stake in Elementos to 19.98% through a $5 million strategic placement, indicating strong investor interest in the company’s tin projects.
The strategic investment by Metals X underscores confidence in Elementos’ projects, potentially enhancing its development capabilities and market presence.
Market cap: $29.44 million
Yari Minerals (ASX: YAR)
Yari Minerals is engaged in lithium exploration activities.
The company is involved in the Boca Rica Lithium Project in Brazil, where diamond drilling has commenced to test lithium-bearing pegmatites.
Yari’s active exploration in a lithium-rich region positions it as a potential contributor to the global lithium supply chain, essential for battery production.
Market cap: $5.03 million
Jindalee Resources Ltd (ASX: JLL)
Jindalee Resources is focused on lithium exploration, notably in the United States.
The company’s McDermitt Lithium Project in Oregon is one of the largest lithium deposits in the U.S., positioning Jindalee as a significant player in the lithium sector.
With a substantial resource base in a strategic location, Jindalee offers investors exposure to a key component of the electric vehicle and energy storage markets.
Market cap: $28.45 million
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This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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