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Lithium, a lightweight metal essential to the latest generation of high-tech batteries, possesses two features most investments lack.

For one thing, future demand is nearly certain to surge as battery-driven vehicles grab an increasing share of the automotive market. For another, a handful of companies now dominate production of lithium.

Combine growing demand with today's oligopoly of producers and it's clear why three major U.S.-listed lithium miners have been among the best non-bitcoin investments of 2017. Shares of Sociedad Quimica Y Minera de Chile, the Chilean giant better known as SQM, have surged 80 per cent since January. Over the same period, Albemarle Corp., up 45 per cent, and FMC Corp., up 53 per cent, have also enjoyed dazzling runs.

Are there more profits to come? It seems likely, although investors probably won't see a repeat of this year's gains any time soon.

The biggest reason for optimism is the increasingly positive outlook for electric vehicles. "We have a much more bullish demand outlook" for lithium than a few months ago, says Alex Laugharne, a principal consultant for metals watcher CRU. He points to China's growing push to put more electric cars and trucks on its roads as the primary reason for his optimism.

However, Mr. Laugharne cautions that increasing supply is likely to put a lid on future gains in lithium prices. The metal is found in abundant quantities, most notably in the lithium triangle that sprawls across Chile, Argentina and Bolivia. As smaller players, such as Toronto-listed Orocobre Ltd. and Nemaska Lithium Inc., rush to bring projects on stream and bigger companies move to expand production, surging output will bring the market back into balance within a couple of years.

Lithium carbonate typically fetched around $11,500 (U.S.) a tonne this year, nearly double the prevailing price two years ago. Prices may increase slightly next year, Mr. Laugharne says, but will probably fade back to $9,000 to $10,000 a tonne in 2019.

A similar viewpoint comes from Joel Jackson, an analyst at Bank of Montreal. "We see lithium carbonate prices up a little in 2018 before falling in 2019-2021 and stabilizing" around $10,000 a tonne, he said in a recent report. If prices do stabilize around $10,000 a tonne, existing producers should continue to enjoy strong profit margins, according to Mr. Jackson.

Still, investors would be wise to choose their stocks carefully. Most of the biggest producers are diversified companies with interests that extend well beyond lithium. Each poses its own set of risks.

SQM, for instance, is engaged in a battle with Corfo, the Chilean government economic development agency. The official body has alleged that SQM, the world's second-largest lithium producer, failed to live up to its contractual obligations. Arbitration efforts have fizzled so far and SQM warned in November that it does not expect a resolution until the end of 2018.

The outcome of the dispute is key to SQM's future because Chile has declared lithium to be a strategic material and imposes tight quotas on production of the metal. History stands in the way of any easy settlement between the company and the government: SQM was privatized in the 1980s by the government of the country's ex-dictator, Augusto Pinochet, and is still controlled by Julio Ponce Lerou, Mr. Pinochet's former son-in-law. Corfo has declared that Mr. Ponce must give up control of the company before SQM can negotiate any expanded quota for lithium output.

On top of all that, one of SQM's major shareholders, Potash Corp. of Saskatchewan Ltd., has put its 32-per-cent stake up for sale as part of the conditions imposed by India for approving Potash Corp.'s merger with rival Agrium Inc. The stake is expected to fetch $5-billion or more.

In short, investors in SQM are buying into a tangle of political issues as well as an uncertain ownership picture. They also have to factor in the outlook for SQM's other businesses, which include fertilizers and industrial chemicals. Lithium produces only about 27 per cent of the company's sales.

Albermarle, the world's largest miner of lithium, is a much simpler proposition but has its own question marks, related to its rapid growth plans. The company, based in Charlotte, N.C., makes a range of specialty chemicals. For now, Albermarle gets about 40 per cent of its revenues from lithium, but it is expanding aggressively in the area and says it intends to capture half of the growth in the worldwide lithium industry.

FMC, based in Philadelphia, is also a diversified chemical producer. Lithium is responsible for only about 10 per cent of its revenue, making it anything but a pure play on the metal. However, its agricultural chemical business is attractive in its own right.

None of the three major major lithium miners is cheap: SMC trades for 35 times earnings, while Albermarle changes hands at a 47 times multiple and FMC goes for 61 times. For now, Albermarle is Mr. Jackson's preferred way to bet on a lithium future. He has an "outperform" rating on the stock with a $160 target price, well above its current $130 range. It's expensive, he cautions, but "we continue to believe that paying up for Albemarle is prudent."