Lithium, Graphite, Cobalt, Neodymium, Praseodymium, Terbium, and Dysprosium poised to Skyrocket
Junior mining stories are invariably predicated upon peak supply stories. Either current supply is insufficient or future supply will be insufficient to match the market’s demand. In either case therefore demand can only outstrip supply and prices therefore must go up.
But now we have a new metric to consider when looking at junior mining ventures, peak demand.
OPEC picked today to announce that its members, who collectively produce 1/3 of the world’s petroleum, predict that demand for oil will peak in 2029 at 100 million barrels per day and decline after that.
It is the reasons why OPEC has forecast the end of its growth that should get our attention. First and foremost is the agreed and legislated reduction of fossil fuel burning to create electricity mandated by the just ratified (though not by the USA) Paris Accord on Climate Change, most importantly though for small investors is the reduction in the use of petroleum for making fuel for internal combustion engines.
I just returned from China where I heard a speaker from BYD forecast that China will produce 40 million cars and trucks per year by 2025 and that by 2030 30% of annual production of motor vehicles in China will be EVs. Thus China alone in 2030 would produce 25 times as many EVs each year as the entire world does now.
Assuming that the above forecasts, peak oil demand and EV vehicles as a percentage of all vehicle production are true globally then demand for: Lithium, Battery grade Graphite, Cobalt, Neodymium, Praseodymium, Terbium, and Dysprosium will skyrocket in the next 14 years, while demand for: Platinum, Palladium, and Rhodium should level off, peak, and decline in the next 14 years.
I note that the recycling of the metals and minerals (graphite) that I am saying will skyrocket is well underway in China, and hardly or not at all in the rest of the world. China’s practicality and focus could not be made more manifest.
Battery materials’ recycling must now become integrated into the supply chains for batteries, electric motors, and electric generators in those nations where the primary supplies are scarce or non-existent (such as the USA!!!).
For the platinum group metals as demand peaks and then decreases recycling, which is already 30-40% of the supply, will only increase until new mining is only marginally necessary if at all.
New technologies for recycling are nice but not necessary unless they show a clear reduction in cost and environmental impact!
When you are looking at the bottom line always capitalize environmental impact (or lack thereof) and then if you see profit and a return on your capital, invest.
Junior processing technology companies can only be successful when their process technologies decrease costs and improve the environmental impact of an industry. This is most likely to happen when new and newly applied processing technologies are used to address recycling. Mature industries that are profitable will not take on debt to replace technogies that work well enough. It is for junior technology metals and materials ventures, not the least of which are for recycling, that new and newly applied technologies show the most promise for a path to profitability.
As a recent Nobel Prize winner famously sang, “The times they are a-changin.”
Jack Lifton is the CEO of Jack Lifton, LLC and is a consultant, author, and lecturer on the market fundamentals of technology metals. “Technology metals” ... <Read more about Jack Lifton>