Why Sigma Lithium Stock Ran Higher Today

• China is canceling aged lithium mining licenses, mostly for non-operational mines.

• Chinese lithium prices spiked connected the news, pushing lithium stocks higher today.

• 10 stocks we similar amended than Sigma Lithium ›

Shares of Sigma Lithium (NASDAQ: SGML), the Brazilian hard-rock lithium miner, jumped 10.6% done 10:25 a.m. ET this greeting -- and China is the reason.

The Bureau of Natural Resources successful Yichun, Jiangxi Province, plans to cancel 27 mining permits successful January. Lithium prices successful China reacted sharply to the news, rising 7.6%, and the terms bump is having knock-on effects among lithium stocks worldwide.

Mining.com explains that "all of the licences had already expired, immoderate much than a decennary ago, and astir were registered for ceramic clay oregon limestone mining."

As such, you mightiness not expect the licenses' cancellation to person overmuch effect connected lithium accumulation rates oregon lithium supply. This seems much a substance of cleaning up aged paperwork than a determination with existent economical impact. Indeed, 1 expert is quoted arsenic confirming that "the licence cancellations would person small interaction connected supply, arsenic nary of the revoked permits covered operating mines."

But the information that the licenses remained progressive held the imaginable for mining to beryllium resumed astatine immoderate of the sites, legally. That can't hap present unless the licenses are officially renewed, and this could person an interaction connected lithium supply.

This is the crushed lithium investors are getting excited: The imaginable for a aboriginal proviso crunch to make a shortage of the achromatic metal, which volition assistance prices successful the future.

That's a logical take, truthful acold arsenic it goes. Near term, however, it doesn't alteration the information that Sigma Lithium is losing wealth and burning currency -- $33 cardinal successful nett losses and $24 cardinal successful antagonistic escaped currency travel implicit the past 12 months.

Until these numbers improve, it's hard for maine to telephone Sigma Lithium banal a "buy."

Before you bargain banal successful Sigma Lithium, see this:

The Motley Fool Stock Advisor expert squad conscionable identified what they judge are the 10 champion stocks for investors to bargain now… and Sigma Lithium wasn’t 1 of them. The 10 stocks that made the chopped could nutrient monster returns successful the coming years.

Consider erstwhile Netflix made this database connected December 17, 2004... if you invested $1,000 astatine the clip of our recommendation, you’d person $509,955!* Or erstwhile Nvidia made this database connected April 15, 2005... if you invested $1,000 astatine the clip of our recommendation, you’d person $1,089,460!*