EDITOR: | May 19th, 2016 | 2 Comments

CTMS2016: The Davos of Specialty Metals – Revelations & Lessons Learnt

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IMG_20160509_115118This was the first CTMS (5th Annual Cleantech and Technology Metals Summit) conference I had been to, but all reports indicate the event is going from strength to strength. It certainly helped that Spring was in the air, both literally and metaphorically, with buzzy and busy markets lifting the pall of gloom that has descended over specialty metals since 2011. Maybe there was Lithium in the water but it was certainly in the airwaves, with the good move in that metal giving heart to many other purveyors of specialty metals that their turn would be next.

We have referred to this as the Davos of Specialty Metals in the past because it is not one of those events when CEOs drone through a presentation to a collection of plate-lickers toting their Walmart shopping bags (a very common phenomenon in New York).

The difference here is that Investorintel has brought together heavyweights for an exchange of ideas, trends and technologies. The investor contingent tended to be private equity types and strategic investors rather than the perennial tire-kickers of the institutional investment community. Scientists, academics and some metals traders also gave it more of the feel of a “trade” event rather than something for the Great Unwashed.

Metals Mentioned

It was Lithium by a mile in the race for attention at the CTMS this year, but it was a close race (to elongate my racecourse analogy a little). Cobalt, despite not being featured, ended up as a word on nearly everyone’s lips. Rare Earths featured quite prominently and not with the disdain they have suffered in recent years, while some of the long-priced contenders shot onto the finish straight much to everyone’s surprise with Scandium and Beryllium in particular getting more airtime than one would have imagined.

Also featuring were Niobium, Tantalum, Tungsten and Tin (the latter two brought into contention by myself) and Jack Lifton even managed to reminisce about Tellurium.  Vanadium Radox batteries got a passing mention (and I wanted to hear more) while even Manganese was name-checked but without being fleshed out as a technology metal story.

Key Takeaways

It’s probably best to list these in bullet points:

  • Lithium has cemented itself as the specialty metal at the head of the pack, and by quite a long way
  • Insiders feel that the price will not go much higher
  • Other battery technologies may gain traction long-term but the massive tooling up for Lithium based batteries shall help it maintain its lead for a decade at least
  • Supply is rising but not at a pace that gives concern of a glut
  • The Chinese are attempting to corner the market in new projects while the Koreans and Japanese are a bit like frogs in the boiling water
  • As mentioned Rare Earths are not the subject of despair that they have been in recent years
  • With regard to China it’s the environment that is the pressing issue. This should result in more closures of illegal mines and mid-tier processing.
  • Large amounts of REE resources have been wasted or under-utilised in China putting them in a vulnerable position
  • Africa seemed to be firming up in the REE stakes, while North America has slipped back with the Mountain Pass closure
  • There was some debate as to whether the Chinese would be able to get their hands on some of the ex-Molycorp assets scattered around the globe
  • Scandium is building a public profile. There are around five players, but it is most likely that only two are needed for the foreseeable future. The space is unlikely to get flooded with new capacity due to the best deposits having largely been identified
  • Cobalt, as mentioned, generated a lot of conversation with its being seen as Lithium’s fellow-traveller in the battery story.
  • I pointed out that the Tenke Fungurme sale story has been misinterpreted as a copper sale story when in fact with was a Cobalt grab by the Chinese with implications for supplies to Western cobalt consumers
  • Seems cobalt offtakers are not prepared (yet) to put their money where their mouth is to secure firm offtakee by backing projects to production
  • Two of the most advanced primary cobalt stories pitched their plans
  • Graphite got some attention if it was production oriented so the parties that attended were either in production or well on the way. The distant wannabes were hiding somewhere (maybe wondering if they should convert to Lithium stories!)
  • Tesla was the subject of more mirth than solemnity and Goldman was the butt of various jokes for their “Lithium is the new gasoline” meme, to which I dedicated a short talk.

Personalities

In the interests of creative tension, Investorintel had corralled in the room some of the most vocal proponents of various schools of thought on these metals. Take a large sack, insert Jack Lifton, Dudley Kinsgnorth, John Petersen and yours truly and the fur will fly. As the days went on everyone realised this was not an exercise in consensus and that disputation actually made for a better time.

Beyond that though there was some “calling a spade a spade” on the panels and being moderator was like being referee of a Heavyweight Title bout. Watch out for stray punches. It was good to hear the phrase “you’re wrong” being flung back and forth (the financing panel being a particularly contentious one).

Conclusion

As we have noted before the old “tried and true” format of vast halls with stalls manned by the flunkies’ flunky have gone the way of the Dodo with recent years showing sparsely attended events with tumbleweeds blowing down the aisles. Such events were not informative, they were not contentious, they were expensive and frankly they no longer work.

Investorintel seems to have stumbled upon a good formula here with a thematic conference at which big issues and “futurology” of the mining space can be hashed out in a fertile environment. Challenging the accepted wisdoms is what it’s all about.

It will be very interesting to watch this event evolve as more specialty metals “come in from the cold” as the recovery and prices gain momentum. Onward and upward!


Christopher Ecclestone

Editor:

Christopher Ecclestone is the EU Editor for InvestorIntel and is a Principal and mining strategist at Hallgarten & Company in London. Prior to founding Hallgarten ... <Read more about Christopher Ecclestone>


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Comments

  • Tracy Weslosky

    Thank you Christopher for the outstanding CTMS summary, we were delighted to have you in Toronto and your forecasts of what to anticipate in this sector is cleverly absent in the above. Great, let’s interview you next week and get a recap. Also, the panel hosted by Nemaska Lithium Director Judy Baker on other metals and associated challenges in electric vehicles was outstanding, and of course, Frederic Dugre of H2O Innovation discussing water technology in his keynote speaker was a real treasure for me mentally as we all contemplated the impact of the environment on our investment portfolios. Thanks again for your commentary, presentation and input at CTMS! The videos will be cut and edited and we will start posting 3-5 a week starting next week. Yesterday, I confirmed the 1st 20 — and yes, this was just for the speakers…..

    On a final note, the dealmaking that was taking place in the lobby and lounge and at tables throughout the event had me itching to hear what was taking place….again, thank you everyone for participating: we are booking the date for next year as we speak.

    May 19, 2016 - 9:21 AM

  • jeff stufsky

    The technology metals, advantageously for now, benefit from the absence of the sort of detailed, reasonably transparent, and readily available information (e.g., cost curves, global and regional supply/ demand stats, per-product utilization by amount/quality) that is so boringly and soberly available in the tumble-weed dry -gulch inhabited by the homogenized and exchange-traded precious and base metals. Hopefully the previously sated plate-lickers (in NY and other long-standing investment centers) have recovered from their severe bout of indigestion and have purged only their inhibitions (albeit hopefully not all their money) and are ready to try again (or again, again, again). As in past, hopefully some new players rotate into the mining (project development) space as just another technology play or refuge from something “hard” to make money at. Cycles are indeed immutable, and I always think of the words to a song from The Who: “We don’t get fooled again. Don’t get fooled again. No, no! Yeaaaaaaaaaaaaaaaaaaaaaaaaah! Meet the new boss. Same as the old boss.” Trust but verify?

    May 20, 2016 - 11:34 AM

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