Lithium is a critical component in the batteries that make EVs run. So increasingly colossal amounts of the element will be needed in the years ahead to meet soaring production of low-carbon vehicles.

Studies suggest that there is huge financial incentive for carmakers to speed up their switch to EVs too, as environmental legislation is steadily tightened. According to thinktank Transport & Environment, operating margins on such vehicles “are expected to reach and surpass those of conventional cars” in the next three-to-five years.

Why I’d buy lithium stocks today

I think buying lithium stocks could be another good option for me as battery production steadily increases. I’d certainly rather buy one of these shares rather than an EV stock like Tesla or NIO. Competition among the autobuilders is intense and is set to increase.

Production levels at EV stocks like these are also tipped to come under pressure if, as some predict, massive lithium shortages occur towards the end of the decade. Conversely, lithium-producing stocks would benefit from a boost to lithium prices if material shortages emerge.

3 top lithium stocks to buy

There are plenty of top lithium stocks for me to choose from today. Here are three UK-listed mining stocks that I’m considering investing in:

#1: Zinnwald Lithium

Zinnwald Lithium is named after a gigantic lithium asset in East Germany where output is due to begin next year. Pleasingly, the project is located on the doorstep of some of the world’s largest automakers like Volkswagen, BMW, and Porsche. This gives it a huge advantage over many other lithium-producing stocks. Remember though that any mine development issues could cause profit forecasts to sink and potentially lead the company to embark on additional fundraising.

#2: Rio Tinto

FTSE 100 stock Rio Tinto is one of the world’s biggest mining businesses. Lithium forms a small part of its operations but Rio is boosting its exposure. This year, it paid $825m for the large undeveloped Rincon project in Argentina. A severe economic downturn in 2022 could smack demand for its industrial commodities, including copper and iron ore, very hard. But I believe Rio could be a great way for me to capitalise on soaring raw materials demand over the longer term.

#3: Atlantic Lithium

I like Africa-focussed Atlantic Lithium following a stream of positive project update. The company’s flagship asset is the Ewooya lithium project in Ghana which has been subject to significant resource upgrades in recent months. In recent days, Atlantic has said it will double the size of its drilling plan there with a view to producing a pre-feasibility study in the third quarter. I’m confident of further excellent newsflow here. Although I’m also aware that any adverse developments could cause its share price to reverse sharply.

Investing in early-stage miners like this is dangerous business. Zinnwald isn’t set to begin producing lithium from Saxony in Germany until 2023. So the company isn’t revenues generating and could see its balance sheet stretched if it encounters any development problems. In this scenario, shareholders can be tapped for cash and/or debt can be taken on.

As I say though, the upside of investing in Zinnwald Lithium is that it gives me exposure to the EV sector. And, more specifically, it could make me a lot of money if lithium supplies run low and prices soar.

Last week, the head of Stellantis Carlos Tavares — manufacturer of brands like Peugeot, Fiat and Jeep — warned that a shortage of batteries is set for around 2025 or 2026.

The rate at which EV sales are tipped to soar could make lithium stocks like Zinnwald some of the hottest mining shares to own for the next decade.

A gold stock I’d buy

I think buying gold mining stocks is a clever idea too as inflation soars across the globe. I am thinking of doing this by investing in Brazilian gold explorer and producer Serabi Gold (LSE: SRB).

Gold prices are caught in the crosswinds at the moment. Demand is being supported by some shocking inflation gauges from across the globe and rising inflationary warnings from economists and central banks. Fears over the impact of rampant price rises on the economic recovery is also fuelling the safe-haven metal.

However, at the same time, rising bond yields and a resurgent US dollar are hampering gold prices. A stronger dollar effectively makes it more expensive to buy buck-denominated assets like bullion.

There’s a risk that gold prices could continue retreating (they recently dipped to three-month lows just above $1,800 per ounce). And especially if central banks hike interest rates fiercer than expected. But it’s my belief that metal prices should rise as inflation moves to eye-popping levels.

The European Commission is the latest major institution to raise its forecasts. In recent days, it supercharged its inflation forecasts from just a few months ago. It now expects inflation to average 6.1% in 2022, up significantly from 3.5% previously.

And it’s possible that inflation will beat even these revised forecasts as the war in Ukraine drags on.

Holding stocks like Serabi Gold are a good insurance policy for investors like me as insurance for when economic shocks happen. And buying this particular penny stock today could be a good idea as production from Serabi’s Palito mine recovers strongly following disruptions earlier in 2022.

I love to invest in UK shares with my ISA. The £20k that I’m permitted to invest each year in it is enough for my needs. And using an ISA wrapper gives me the chance to make a fat pot of cash without having to pay a single penny to the taxman.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions

I’d buy penny stocks today

I don’t need to use any money I pay into my ISA to buy stocks straight away. I can wait for weeks, months, or years to invest in some actual companies after that 5 April deadline.

I don’t see any reason why I personally need to wait, however. Here are three top-class penny stocks I’m thinking of buying right now. I think they coud deliver excellent returns in the near term and beyond.

A top lithium stock to buy

Buying lithium stocks could be a brilliant investing idea for me as electric vehicle (EV) sales boom. I’m considering doing this by buying lithium mining share Zinnwald Lithium (LSE: ZINN).

Lithium is a key material in the production of EV batteries. And Zinnwald has a 100% stake in a gigantic resource bang in the middle of German car-building country.

The penny stock is actually yet to produce any of the material. And setbacks with the development of the Zinnwald project could be costly in terms of both lost revenues and increased expenses.

In such a scenario accruing more debt and/or tapping shareholders for cash could also be possible. Mining for commodities is expensive business at all points of an asset’s life, after all.

However, I’m encouraged by ongoing progress at the asset. In March, Zinnwald Lithium confirmed the technical and economic viability of producing battery-grade lithium hydroxide following pilot testing at the site.

It’s my opinion that the potentially explosive benefits of owning this lithium stock over the long term outweigh these risks.

A golden penny stock

Chaarat Gold (LSE: CGH) is another penny stock that exposes investors to the unpredictable and often troublesome business of mining. But it’s still one I’d also load up on before next week’s ISA deadline.

This is because I think gold prices could be poised for another surge higher, driving profits at firms like Chaarat to the stars.

Inflation is a natural driver for gold prices. Right now it is rocketing beyond all expectations and is predicted to keep booming too. Consumer prices in the eurozone soared 7.5% in March, data showed today. That’s up from 5.9% in February and way above an expected 6.7%.

Any resurgence in the US dollar could hamper fresh rises in the value of gold. But on balance I think the outlook is good for bullion prices and, by extension, Armenia-focussed Chaarat’s share price.

Playing the green economy

I believe Sylvania Platinum (LSE: SLP) will prove a great stock to own for two compelling reasons. I expect demand for the platinum group metals (or PGMs) it pulls out the ground to rise as lawmakers tighten emissions regulations. Around 40% of global supply is used to build catalytic converters in cars and trucks.

Secondly, I’d buy Sylvania on account of platinum’s role in producing carbon-free (or ‘green’) hydrogen. The metal is used, for example, as a catalyst in hydrogen-based fuel cells in cars, a technology tipped to grow rapidly as petrol- and diesel-powered motors are phased out.

Green hydrogen is seen by many as the future of low-carbon technology. Unlike other forms of hydrogen it doesn’t require the use of fossil fuels to be produced, making it the most environmentally-friendly option. It’s why the International Renewable Energy Agency thinks global green hydrogen demand will hit between 133m and 158m tonnes a year. That is, if the gas is used instead of fossil fuels in transport, industrial and heating applications.

4.9% dividend yield!

The danger for Sylvania Platinum is that the green hydrogen industry is quite small today. In theory it has potential, but there’s no guarantee that it’ll grow rapidly as it competes against other forms of hydrogen technology and green energy sources.

Yet this is a scenario I think could be baked into the penny stock’s current price of 96p. Today Sylvania trades on a forward price-to-earnings (P/E) ratio of just 4.4 times. I think this, along with the commodities giant’s 4.9% dividend yield makes it an attractive buy for me right now.

Another ‘green’ penny stock to buy

Zinnwald Lithium’s (LSE: ZNWD) another attractive way for me to play the electric vehicle theme. As the name suggests, this penny stock is involved in digging for lithium, a critical component in the manufacture of battery-powered vehicles. However there are reasons why I like this business in particular.

It takes its name from a lithium project that’s located on the German-Czech border. That location is all-important as it puts it on the doorstep of Europe’s car-building country. What’s more, the Zinnwald project — which has a 30-year mining licence and contains around 125,000 tonnes of lithium — can be found in an area where mining goes back centuries. This means the company has a lot of the infrastructure in place to try and make it a success.

Risk vs reward

It’s important to remember that Zinnwald Lithium isn’t actually producing any of the material right now. Development of the project continues with a view to producing maiden lithium around the middle of the decade. It therefore has a long way to go and any setbacks could result in the business tapping shareholders for cash or raising more debt to keep going.

However, I believe the rewards of owning this penny stock could outweigh the risks. I’d happily add this UK share to my own portfolio alongside Sylvania Platinum.

A penny stock that has halved in value

First up is Made.com Group (LSE:MADE). It has a share price of 96p at the moment, having fallen from its IPO price of 200p last spring. This is a hefty slump in less than one year, as the company has battled with supply chain disruptions. 

In the December trading update, it revised down revenue and adjusted EBITDA. In fact, adjusted EBITDA went from being positive to having a forecasted negative £12m-£15m figure attached.

This is the key risk going forward, in that the business struggles to get products to customers. However, it said that regarding the supply chain “the group has built stock positions to deliver significantly better lead times to consumers for 2022 and beyond as orders placed with suppliers are now in or close to our warehouses.”

Another update on financials in January showed that gross sales are up 38% year on year, highlighting that demand is there from consumers. Therefore, if the supply chain issues can be resolved, I think the penny stock could see the share price climb from current levels.

An idea on the lithium surge

The second company that I’d put £500 in is Zinnwald Lithium (LSE:ZNWD). I recently wrote about lithium stocks in more detail, that can be read here. The reason why I like the businesses that it’s at the exploration end of the sector. Given the large rise in the price of lithium over the past six months, the company should be able to benefit from this.

The project is located in Germany, with approved licenses and a mine life of 30 years. Zinnwald specifically is catering to “supply high value lithium products to Europe’s rapidly growing EV and energy storage markets.” Given the growth in the electric vehicle (EV) market in the past year, I’ve no doubt about the demand going forward.

The penny stock has seen the share price rally 27% in the past year. Yet at 16p, there’s still plenty of room to run higher before it trades above 100p. I personally don’t think that the stock is on many investors’ radars. If and when it does, then the share price could take off.

However, I do need to be conscious of the risks. This isn’t a stable play by any means. If the project doesn’t pay off as expected, or if the EV sector develops to a stage where lithium isn’t a key need, Zinnwald could really struggle.

A top electric car stock

Booming electric vehicle sales opens up a world of opportunity for UK share investors like me. I’m thinking of doing this by acquiring shares in Zinnwald Lithium (LSE: ZINN). The commodity it’s aiming to pull out of the ground is required in huge amounts to drive battery-powered vehicles. Zinnwald is hoping to start producing lithium from its Central European project over a 30-year period from next year.

I also like Zinnwald because its eponymous lithium asset is, as it says itself, “in the heart of the European chemical and automotive industries” in Germany. This puts it on the doorstep of major industrial customers. Even though trouble developing the mine could hit profits projections I think Zinnwald still has enormous long-term investment potential.

Full steam ahead

It’s possible you haven’t heard of Taylor Maritime Investments Limited (LSE: TMIP). This penny stock only began trading in London last May. I’d buy it today because shipping rates are booming and there’s a good chance they’ll continue climbing for some time.

Taylor Maritime owns 32 Handymax and Supramax vessels which transport bulk commodities. And at the moment, the firm is thriving as the global economy recovers from Covid-19 and raw materials demand surges.

Charter rates are currently at their highest for a decade, Taylor Maritime says, and it has tipped “continued market strength for the coming two to three years” too. This is perhaps no surprise given that orders of Handysize vessels (which comprise the Handymax and Supramax categories) are at their lowest for many decades.

The shipper could of course hit choppy waters if the economic rebound runs into trouble. But as things stand today, I think the potential benefits of owning this penny stock far outweigh the risks.

Tough as steel

Strong commodity price inflation because of rocketing demand could threaten earnings at steelmaker Severfield (LSE: SFR). However, a strong outlook for the global construction market suggests this could still be a top penny stock for me to buy. Rebounding building rates following 2020’s Covid-19 shock drove Severfield’s European and UK order books to record highs as of September, most recent financials showed.

I like Severfield because the structural steel it manufactures is used to make buildings, bridges and other types of infrastructure across the globe. This gives it extra strength as it reduces its reliance on one or two sectors or geographies to drive profits. I am particularly encouraged by the firm’s exposure to India where rapid urbanisation will offer terrific revenues opportunities.

One final thing. At current prices below £1, Severfield trades on a forward price-to-earnings (P/E) ratio of 9.5 times. I think it could be a great growth stock that’s too cheap to miss.

Play my cards right

Card Factory faces a significant threat from online-only rivals like Moonpig and Funky Pigeon as e-commerce in its category takes off. But this penny stock is no slouch on this front and it’s invested heavily in its own internet proposition to exploit the online boom. Latest financials consequently showed sales at Cardfactory.co.uk and its Getting Personal customised greetings channel trading above pre-pandemic levels.

I’m tempted to buy Card Factory because of its ultra-defensive characteristics. We don’t stop celebrating special occasion like birthdays when economic conditions worsen, right? I also like Card Factory’s focus on the fast-growing value end of the retail market. This cheap UK share trades at 57p.

Strong all-round value

The online shopping phenomenon offers big opportunities for investors to make a buck. I myself have bought into Tritax Big Box REIT to capitalise on this, a business that rents out warehouses and distribution hubs. And I’m considering snapping up Raven Property Group (LSE: RAV) too. This UK share does the same thing, except its big box assets are located in Russia rather than in Britain.

The Russian e-commerce market is growing rapidly, and as a consequence, so is demand for buildings that help retailers meet orders. Pleasingly for the likes of Raven Property, digital retail is expected to continue growing rapidly. Boffins at Statista are predicting annual growth of 42%, 37% and 31% in 2021, 2022 and 2023 respectively, for example. But I’m aware that further economic sanctions if the Russia-Ukraine military crisis worsens could hit e-commerce growth in the near term and beyond.

Today Raven Property trades at 33p per share. This leaves it on a forward P/E ratio of below 4 times. Furthermore, at current prices this penny share carries a mighty 5.4% dividend yield. I think this sort of value is hard for me to ignore.

A penny stock for the EV boom

I also think profits at Zinnwald Lithium (LSE: ZNWD) could soar as demand for lithium steadily takes off. This particular UK share owns the gigantic Zinnwald lithium project in the heart of Germany’s carbuilding country. It’s therefore well placed to ride soaring demand for low-emissions vehicles that run on lithium batteries.

According to commodities analysts at Fastmarkets, “electric vehicle (EV) demand will continue to drive the lithium market forward”. They predict that electric car penetration will reach 15% by 2025 before marching to 35% by 2030. And they expect growing lithium demand “from applications such as energy storage systems, 5G devices, and Internet of Things infrastructure” too.

Of course Zinnwald Lithium may fail to take full advantage of these expanding markets if development of its German mine hits problems. But this is a risk I’d be willing to take. All things considered, I still think this penny stock has plenty to offer me. It trades at 14.6p right now.

Penny lithium stocks

Zinnwald Lithium (LSE:ZNWD) and Kodal Minerals (LSE: KOD) are companies with a focus on lithium mining and processing. EV manufacturers, including Tesla CEO Elon Musk, have addressed the lithium shortages hampering production. And I think specialised mining is the answer. 

Europe has emerged as a lithium powerhouse. And I think Zinnwald is making strong moves in cementing its position in the EV supply chain. Its new project is situated in Germany’s automobile manufacturing belt. Zinnwald’s lithium processing plant promises a high-grade product targeted at the EV industry.

The plant has the capacity to process 522,000 tonnes of lithium ore every year, for the first five years. It will eventually scale up to 600,000 tonnes of ore per year over the next 30 years.

However, the company is still just nine years old and the mining industry is a tough space to break into. Zinnwald will have to navigate several environmental concerns and compete against established miners. But I am willing to make a £1,000 investment in this penny stock today (currently trading at 21p) given its future revenue potential.

Similarly, Kodal Minerals is another lithium share on my radar. It was in the news recently over its acquisition of the Bougouni Lithium Project in Southern Mali. The mine has a capacity to produce 220,000 tonnes of mineral spodumene (a major source of lithium). The region also has a minimum 8.5-year mine life. Estimated total production stands at of 1.94m tonnes of concentrate, which is valued at $1.4bn.

This news has driven the Kodal share price up 43.8% in the last six months and is currently trading at 0.34p. Kodal too is a relatively new operation and faces the same difficulties as Zinnwald Lithium. But, I think this company could grow with the EV industry, given its recently acquired reserves.

FTSE 100 mining giant

I wrote about Rio Tinto (LSE:RIO) and its sizeable 10.3% dividend yield recently. But I think the most exciting aspect of the company right now is its massive lithium reserve.

The company recently acquired the Jadar lithium mine in Serbia for $2.4bn and has achieved lithium production in its California-based boron mine site. Rio is targeting close to three million tonnes of lithium carbonate over the next 40 years. The miner also has a cash reserve of $3.1bn, which it could gainfully use to secure new lithium sources found across Europe, Africa, or South America.

Rio shares look like a huge bargain to me at 4,430p, trading at a forward profit-to-earnings ratio of 5.2 times. Also, the company has an excellent history of increasing dividends every year. 

However, there were concerns and protests surrounding the environmental impact of its mine in Serbia. The project’s production could be impacted in the future if environmental impact assessment (EIA) studies are negative. But, it is hard for me to overlook the potential of the sector and mammoth dividends, which is why Rio is the top UK lithium share I’d buy today.

Lithium powered

I recently explained how exploding demand for low-emissions cars provides opportunities for UK share investors like me. Zinnwald Lithium (LSE: ZWND) is one electric vehicle (EV) stock I’m thinking of snapping up as a result.

This business owns a 100% stake in the Zinnwald lithium project in Germany. And so it will likely play a critical role in the production of EV batteries. Indeed, the asset is located slap bang in the centre of Europe’s car-building industry. Encouragingly, EV sales in Germany were the second-largest on the planet in 2020, behind only China. Production is yet to begin at Zinnwald. And while the business is making good progress towards maiden output, any issues on the development of the mine could have serious consequences for future profits. All things considered I still think it’s an attractive buy right now, however.

A great freight stock

The Covid-19 crisis poses an ongoing risk to penny stock Xpediator (LSE: XPD). This cheap UK share provides freight management services across Europe. This leaves it vulnerable to fresh travel restrictions being imposed to curb resurgent infection rates. Demand for its services will also likely slump if the pandemic chokes off the economic recovery.

That said, there are a number of reasons why I consider this a highly attractive penny stock today. Its broad range of e-commerce services and its warehouse and logistics division should help it to thrive in the online shopping era. Demand for its customs clearance services is likely to grow in a post-Brexit environment. And its wide geographic footprint gives it strong exposure to fast-growing emerging markets and developed economies alike.

Ready to fly

The same travel restrictions threatening Xpediator might also create problems for Air Partner (LSE: AIR). The aviation services provider faces a sales hit, too, should rising environmental concerns reduce aircraft usage. According to the European Federation for Transport and Environment, private jets are 10 times more carbon intensive than standard airlines, and 50 times dirtier than train travel.

This penny stock provides charter services for aircraft such as private jets, an industry from which it sources the majority of profits. So the dangers created by the green movement are clear. While the Covid-19 crisis created some near-term danger, I think it could be also be argued that it might  manufacture long-term opportunity for the likes of Air Partner. This is because lingering infection fears might prompt wealthier individuals to charter their own planes instead of using standard carriers.

I also think Air Partner’s acquisition-led strategy, focussed on areas such as safety and security, will help reduce the risk of falling private jet activity to group profits. And the business is also bulking up its position in the freight market, which provides additional strength through diversification.