What happened

Shares of Lithium Americas (NYSE:LAC), a development-stage lithium mining company, soared 57.1% in January, according to data from S&P Global Market Intelligence. For context, the S&P 500 index, with dividends included, fell 1% last month.

Lithium Americas stock's January performance comes on the heels of its spectacular run in 2020, when it gained 296%.

Two lithium-ion battery packs laying on a flat surface.

Image source: Getty Images.

So what

We can attribute Lithium Americas stock's powerful performance last month to two key catalysts.

First, shares popped 29.7% in the two-day period following the Jan. 5 Senate runoff elections in Georgia. The wins by the two Democrats meant that the party wrestled control of the U.S. Senate from Republicans. With the White House and both chambers of Congress all under Democratic control, investors are optimistic about the potential for progress on the renewable energy/climate change front. Lithium is needed to produce the batteries that power electric vehicles (EVs).

Shares popped 30.6% on Jan. 19, which was the first trading day following the company's announcement of a key milestone that moved its Thacker Pass lithium project in Nevada a step closer to the commercialization stage. After the market close on Jan. 15, the company shared the news that the U.S. Bureau of Land Management issued a Record of Decision for this project following completion of the National Environmental Policy Act process.

What's next? According to the press release, "Applications for key state permits and water rights transfers have been submitted, with results expected later this year."

LAC Chart

Data by YCharts.

Now what

Lithium Americas' future is looking more promising thanks to the two catalysts covered in this article. That said, as I have written previously, the stock "remains speculative since the company isn't yet mining any lithium for commercial sale. So, only investors who are quite risk-tolerant should consider buying it."

Investors who are interested in the lithium space, but want to bet on a well-established company might consider Albemarle, Sociedad Quimica y Minera (SQM), or Livent. Albemarle and Livent are U.S.-based, while SQM is headquartered in Chile; Livent is the only pure play on lithium of the three companies.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.