Investors in Compass Minerals (NYSE:CMP) and CMP stock are seeing some significant buying pressure today. Indeed, shares of CMP stock are currently up approximately 12% on very heavy volume.
As a key lithium producer, Compass Minerals has gained a lot of attention of late along with the broader sector. Battery development requires tons of lithium (both figuratively and literally). Accordingly, this is a sector that has been in focus for investors for quite some time. After all, the solar and electric vehicle (EV) revolutions depend on the ready supply of lithium. Compass hopes to be one of the key benefactors of this surging demand.
That said, lithium prices have dipped substantially in recent years. Most of the mining for lithium is carried out overseas. Therefore, increased supply in recent years has disrupted the market and led some investors to seek other pick-and-shovel plays in the EV/battery space of late.
However, Compass Minerals is unique in that its focus is on domestic U.S. lithium production. Given the recent U.S.-China tensions, being able to source materials for battery development locally is becoming an increasingly important geopolitical weapon. Accordingly, Compass’ discovery of additional lithium deposits in Utah has sent this stock soaring today.
Let’s dive a bit more into the announcement and what investors need to know.
CMP Stock Surging On Impressive Lithium Find
Today, Compass Minerals announced it has discovered 2.4 million metric tons of lithium carbonate equivalent in Utah.
What’s interesting about this find is that it is within the “ambient brine of the Great Salt Lake.” Compass hopes to extract this lithium via a solar evaporation process, which it is currently using actively at its site in Ogden, Utah.
Additionally, Compass hopes to rely on its current leases and permits to gain access to these reserves. As per Kevin Crutchfield, Compass’s president and CEO, “in a market hungry for domestically sourced lithium produced with minimal environmental impact, we believe a sustainable and readily available lithium resource like we have defined at our operations on the Great Salt Lake could be a true differentiator for our company.”
Investors are indeed jumping aboard this thesis today.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.