- Rio Tinto has been making significant investments into lithium mining
- The UK lithium business was the highest yielding FTSE dividend stock in 2021
- The demand for the precious metal is skyrocketing due to electric vehicles
The lithium demand is expected to reach 2 million tonnes by 2030. Big companies like Apple and Tesla highly rely on lithium-ion batteries. What makes lithium-based batteries alluring is their ability to charge faster and longer duration of use. With the surge in this sector, I am diligently hunting the best UK lithium stocks to invest in today.
Rio Tinto (LSE:RIO) was amongst the highest yielding FTSE dividend stock in 2021. This mining business has been in the news for its recent acquisitions within the mining segment. So, is Rio Tinto en route to becoming the leading UK lithium stock? Let’s explore.
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The mining giant
Rio Tinto is among the largest mining corporation worldwide. This UK lithium stock is driven towards sustainable growth. Also, it is focused on a broader contribution to society, specifically toward net-zero carbon emissions.
The company plans to expand its lithium battery business. So, it’s not surprising that the group has been making a lot of acquisitions in this space.
Rio Tinto has entered into a binding agreement to acquire the Rincon lithium project in Argentina from Rincon Mining for $825m. Meanwhile, the firm committed a $2.4bn investment in the Jadar lithium-borates project in Western Serbia. With a production capacity of approximately 55,000 tonnes of refined battery-grade lithium, this UK lithium stock will become the largest supplier in Europe.
As the lithium sector is rising, I believe Rio Tinto has made some excellent moves. So, by increasing its footprint within the lithium supply market, I think this UK stock could see explosive growth in the near future and over the long term.
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The perils of entering foreign territory
The recent investment into the Siberian state has created quite an uproar by the local activist groups. In light of damaging the environment, the locals are putting pressure on the government to suspend further mining. This is particularly bad news for Rio Tinto, as the group has several plans to expand operations within that region of the world.
Needless to say, if the company is unable to secure mining rights, it could undercut its future growth prospects. And that could compromise its share price.
Best UK lithium stock to buy?
Part of the reason I am interested in investing in lithium stocks is the growing demand for electric vehicles. This global shift towards greener technology like fast-charging high-capacity batteries makes me think the demand for lithium isn’t likely to disappear anytime soon.
Rio Tinto is a leader within its industry, but it may also be the best way to invest in this shifting landscape. At a price of 5,392p, I believe this future UK lithium stock could be a bargain for my portfolio.
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Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies, assets, and strategies mentioned in this article are those of the writer and, therefore, may differ from the opinions of analysts in The Money Cog Premium services.
