Rock Tech Lithium: Analyst Forecasts Triple-Digit Upside Amid European Supply Gap

Shares of Rock Tech Lithium have faced significant pressure in 2025, declining nearly 40% since the start of the year. However, a fresh research note from First Berlin Equity Research suggests this trend could be poised for a dramatic reversal. The firm has reinstated coverage on the German-Canadian lithium developer with a bullish "Buy" rating, highlighting a strategic European position and a key converter project as catalysts for a major re-rating.

Simon Scholes, an analyst at First Berlin, has set a price target of 2.40 Canadian dollars (CAD) for December 22, 2025. With the stock currently trading around 0.70 CAD, this target implies a potential upside of approximately 243%. This optimistic outlook is rooted in a fundamental supply-demand imbalance taking shape in Europe.

Research indicates European demand for lithium hydroxide is projected to surge by 270% between 2024 and 2030, reaching an annual 338,000 tonnes. On the supply side, the continent currently has only one active refiner, AMG in Germany. This looming shortage creates a substantial opportunity for new entrants like Rock Tech Lithium.

The Guben Converter: A Strategic Asset

Central to the investment thesis is the company's fully permitted and shovel-ready converter facility in Guben, Brandenburg. The plant is designed for an annual production capacity of 24,000 tonnes, enough lithium hydroxide to supply batteries for roughly 500,000 electric vehicles.

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Management has recently enhanced the project's economics through cost reductions. Estimated capital expenditures (CapEx) have been lowered by 50 million euros to a total of 680 million euros. Concurrent operational optimizations are expected to reduce operating costs by nearly 23%, boosting the facility's international competitiveness. A significant offtake agreement is already in place, with Mercedes-Benz having secured 40% of the plant's future production capacity.

Favorable Tailwinds from Policy and Pricing

The broader operating environment is also showing signs of improvement. In March 2025, the European Union designated the Guben project as a "Strategic Project," facilitating access to funding programs. This includes potential support from the recently announced RESourceEU action plan, which allocates up to 3 billion euros for such initiatives.

Europe's heavy reliance on China, which currently supplies over 80% of its lithium, adds political urgency to developing domestic production capacity. Meanwhile, the commodity market itself is recovering. Lithium carbonate futures recently hit an 18-month high, driven by supply concerns in China where the government plans to revoke nearly 30 mining concessions starting in 2026—a move expected to tighten global supply.

The Path Forward and Key Catalysts

For investors, the focus now shifts to 2026. First Berlin anticipates Rock Tech Lithium will reach its final investment decision (FID) during this period. To achieve a positive FID, the company must secure binding offtake agreements for the remaining 40% of the Guben converter's capacity and finalize project financing with equity and debt partners. Successfully navigating these milestones is viewed as the critical catalyst required to unlock the substantial share price potential identified by the analyst.