Why are ASX lithium shares powering higher today as the resource sector bleeds?

Some big things have been happening in the lithium industry in recent days.

a man looks down at his phone with a look of happy surprise on his face as though he is thrilled with good news.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It has been a great day for some ASX lithium shares on Monday.

Although the resources sector as a whole is having an off-day, a good number of lithium miners and developers are roaring higher.

Here's a summary of how some of ASX lithium shares are performing today:

  • The Core Lithium Ltd (ASX: CXO) share price is up 2.5% to 98 cents.
  • The Liontown Resources Ltd (ASX: LTR) share price is up 1% to $2.75.
  • The Mineral Resources Ltd (ASX: MIN) share price is up 2% to $80.33.
  • The Pilbara Minerals Ltd (ASX: PLS) share price is up 4.5% to $4.21.

Why are some ASX lithium shares charging higher?

While there has been no news out of these ASX lithium shares today, as we covered here on Friday briefly, there has been some major news in the industry in the last few days.

That news is that the Chilean government plans to create a state-owned lithium company that owns controlling stakes in local lithium producers.

This sent the shares of lithium giants Albemarle Corporation (ASX: ALB) and Sociedad Quimica y Minera de Chile (ASX: SQM) crashing down to earth on Friday on Wall Street.

Bloomberg notes that the government will respect existing arrangements with the two companies, but then move to a state-controlled model once contracts expire in 2030 and 2043, respectively. Alternatively, the two mining giants could opt to give up a majority stake in their operations before then.

So why are some shares rising?

It is worth noting that not all ASX lithium shares are rising today. For example, Allkem Ltd (ASX: AKE) is flat, Lake Resources N.L. (ASX: LKE) is down 4.5%, and Argosy Minerals Limited (ASX: AGY) is down 3.5%.

The difference between these shares and the ones rising above is the location of some of their operations.

The ASX lithium shares that are rising have operations in low-risk jurisdictions, whereas the three listed above all have operations in Argentina.

This appears to indicate that some investors are concerned that Argentina might see what Chile is doing and try to replicate it. In light of this, it may have led some investors to switch out of these shares and into largely Australian-based lithium shares.

Motley Fool contributor James Mickleboro has positions in Allkem. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

An unhappy man in a suit sits at his desk with his arms crossed staring at his laptop screen as the PointsBet share price falls
Materials Shares

Does Macquarie rate James Hardie shares a buy, hold or sell?

The company is set to report FY25 earnings this week.

Read more »

Man with rocket wings which have flames coming out of them.
Materials Shares

Why is the Core Lithium share price jumping 19% today?

Something is getting investors excited. Let's find out what it is.

Read more »

A woman holds up hands to compare two things with question marks above her hands.
Financial Shares

Which is better value right now, Soul Patts or Brickworks shares?

Let's dive in and see what the experts have to say.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Materials Shares

Core Lithium shares charge higher on big news

This lithium miner is starting the week strongly. But why?

Read more »

Lion roaring in the wild, symbolising a rising Liontown share price.
Materials Shares

Why did the Liontown share price rip 19% higher today?

This ASX lithium share was the fastest riser of the ASX 200 today.

Read more »

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Materials Shares

Why are Fortescue shares charging higher today?

What is getting investors excited today? Let's find out.

Read more »

Business people discussing project on digital tablet.
Materials Shares

What does Macquarie think Liontown Resources shares are worth?

Let's see if analysts think that this lithium miner is in the buy zone or best avoided.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Materials Shares

Lynas shares charge higher on big news

What is getting investors excited today? Let's find out.

Read more »