The world's largest asset manager BlackRock has taken a bet on lithium, the so-called "white petroleum", with a stake in Aim-listed miner Bacanora Minerals.
Lithium is a small but irreplaceable component of rechargeable batteries for small-scale devices such as mobile phones. Prices have already risen this year, and analysts predict tremendous growth in the future, mainly due to demand generated by electric cars.
BlackRock will place around 9.8m units at 79p each raising roughly £7.7m for the miner. Bacanora shares closed up 7.4 per cent to 87p per share this afternoon, having risen as high as 89.5p earlier.
The funds will be used for Bacanora's Sonora lithium project in Mexico, where it hopes to mine lithium using an untested process. A fully-funded feasibility study currently underway is likely to complete in the first quarter of 2017.
Peter Secker, chief executive of Bacanora, said: "BlackRock is not only gaining exposure to Bacanora at an exciting time in its development, but also to the attractive demand/supply dynamics of the global lithium market."
"Thanks to lithium's key role in highly innovative industries such as smartphones, electric vehicles and energy storage, supply is expected to struggle to match continued rapid growth in demand for many years to come," he added.
Secker previously told City A.M. that 2020 would be a "magic" year for lithium.
"I think 2020 is quite a magical year for the uptake of both electric vehicles and renewable energy. Anything that uses renewables, or electric vehicles, uses a lithium-based [energy] storage capacity," he said.