Why Pilbara Minerals shares are in the spotlight post-budget

Pilbara Minerals Ltd (ASX: PLS) shares have certainly garnered plenty of investor attention this year.

And for good reason.

As the global transition towards green energy and EVs has accelerated, the price for lithium reached all-time highs in 2022. And the lightweight, battery critical metal continues to trade near those highs, offering some strong support to ASX lithium stocks.

Pilbara Minerals owns the Pilgangoora lithium-tantalum project, located in Western Australia. The project is recognised as one of the largest hard-rock lithium-tantalum deposits in the world.

Despite Pilbara Minerals shares falling 7.09% yesterday, the company’s large exposure to lithium and the green transformation has helped propel the ASX lithium miner’s share price to a gain of more than 120% over the past 12 months.

But there may be more to come, thanks to the latest Australian federal budget.

Labor doubles down on combatting climate change

If you followed along with the budget Treasurer Jim Chalmers delivered to parliament, you likely weren’t overly surprised. The Labor government budget is largely in line with the party’s election promises.

However, that doesn’t mean there aren’t some key takeaways regarding which ASX shares may benefit and which might not.

One of the cornerstone commitments outlined in the budget is combatting climate change. And with $20 billion to back that commitment, Pilbara Minerals shares could be in for some additional tailwinds ahead.

According to Saxo Markets strategist Jessica Amir:

The government outlined a large fund to mitigate climate change risk and support the transformation to net zero. The funding is going toward recently commenced projects on windfarms in Victoria and the Marinus Link project [linking Tasmania and Victoria], while also delivering cheaper infrastructure loans for investment into renewable energy, in order to lower energy costs and achieve net zero over the coming years.

Amir said, “Focus will be on lithium, rare earths, and hydrogen”, adding that Pilbara Minerals shares will be among the companies “on watch”.

How have Pilbara Minerals shares performed longer-term?

As long-term investors, it’s worth taking a step back and looking at the five-year horizon.

With that in mind, Pilbara Minerals shares have gained a whopping 583% over the past five years. For some context, the S&P/ASX 200 Index (ASX: XJO) is up 15% over that same period.

The post Why Pilbara Minerals shares are in the spotlight post-budget appeared first on The Motley Fool Australia.

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More reading

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• Top brokers name 3 ASX shares to buy today
• Why Codan, Coles, Medibank, and Pilbara Minerals shares are sinking
• ‘Too far, too fast’: Pilbara Minerals share price falls on broker downgrade
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. 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.

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