What is the expected impact of any upcoming regulatory or trade policy changes on LRC's royalty streams?

Regulatory & Trade‑policy outlook for LRC’s royalty stream

The most material driver of Lithium Royalty Corp.’s (LRC) cash‑flow is the volume of lithium produced by its partner miners, which is directly exposed to any changes in government policy or bilateral trade rules that affect the supply chain. In the current environment, two policy fronts are likely to move in the next 6‑12 months:

1. EV‑supportive regulations and “green‑industrial” subsidies – Canada, the United States, and the EU are finalising tighter emissions standards and expanding tax credits for battery‑electric vehicles. Those measures are expected to boost demand for “clean‑mined” lithium, encouraging higher production runs and longer‑term off‑take contracts. If the forthcoming U.S. Inflation Reduction Act revisions or the EU’s Battery Regulation include explicit incentives for North‑American lithium, LRC’s downstream royalties should rise proportionately, as partner mines will be able to command higher realized prices and expand output.

2. Geopolitical trade frictions and export controls – The most immediate risk stems from tightening export licences on lithium‑containing concentrates and potential tariffs between the U.S./EU and China. A modest 5‑10 % duty on Chinese‑origin lithium feedstock would compress margins for downstream smelters, prompting them to source more from North‑American miners where LRC holds royalty interests. Conversely, any sudden restriction on Canadian lithium exports (e.g., stricter environmental licensing or indigenous‑rights reviews) could curtail production capacity, immediately depressing LRC’s royalty receipts.

Trading implication

Given the upside bias from likely EV‑friendly subsidies and the defensive cushion provided by a possible trade‑shift away from China, we see a net positive near‑term impact on LRC’s royalty stream, assuming no major supply‑disruption rulings materialise. Traders should monitor: (i) the rollout of the U.S. and EU EV tax‑credit frameworks (expected Q3‑Q4 2025), (ii) announcements from the Canada‑U.S. Trade Council on lithium export tariffs, and (iii) any provincial permitting updates that could tighten or ease mine expansion. A bullish stance (e.g., buying on dips near the $1.30–$1.35 support zone) is justified if policy signals stay favorable, while a protective stop around $1.20 can guard against a sudden regulatory clamp‑down that would choke production and royalty flow.