Battery metals in 2030: Here’s how lithium, cobalt, rare earths, graphite, nickel and copper could make your kid rich

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By 2030, UBS predicts we’ll need a lot of manganese, lithium, cobalt, rare earths, nickel and copper if car makers are to hit some very ambitious production targets.

They estimate EV penetration increasing from 4 per cent currently to 20 per cent of the market by 2025, and 50 per cent by 2030.

That’s 3 million per year to 46 million per year.

Meanwhile, average battery size will increase from 47kWh to 94kWh.

By 2030, they also predict that:

• • Lithium demand will lift ~1100% from ~400,000 to 4.4 million tonnes
  • Natural graphite demand grows by 700%
  • Demand for nickel grows from ~2.6mtpa to 5.8mtpa
  • Rare earths neodymium (Nd) and praseodymium (Pr) face “a step change” in demand from ~30ktpa towards ~100ktpa
  • Cobalt demand to expand over the next decade from around 120ktpa to over 400ktpa
  • And by 2030, copper consumption in EVs — which averages 90kg vs 20kg in ICE vehicles — will represent 4.4mt of copper demand or around 13% of the total

By 2030. That’s only nine years away, folks – about the time your kid’s going to be whining about property prices and how they’ll “never be able to save a deposit”.

Here’s how to reduce the odds of them mooning around your house until they’re 30, by laying down a sweet battery metals nest egg.

Where’s it all coming from?

Nine years is about the amount of time it takes to bring a new mine into production.

And there are nowhere near the number of battery metals projects in the pipeline to cater to that sort of demand – regardless of the battery chemistry.

For example, VW’s 2030 ambition to reach 240GWh within Europe alone poses “seismic challenges” for the company’s ability to procure adequate volumes of raw materials in forms suitable for use in batteries, Roskill says.

“Building factory capacity is one thing, but the company did little to demonstrate where the raw material supply will come from to fuel this planned capacity,” Roskill says in response the carmakers recent ‘Battery Day’.

When it comes to raw materials like lithium, Benchmark Mineral Intelligence analyst Caspar Rawles believes carmakers like VW will be forced to go direct to the miners.

“They will have to go and speak to suppliers who have material left for long term agreements,” he says.

“That will become increasingly challenging.”

Here’s a bunch of near term project developers listed on the ASX hoping to fill that supply gap.

LITHIUM

Current producers like Pilbara Minerals (ASX:PLS), Orocobre (ASX:ORE)  and Galaxy Resources (ASX:GXY) will be among the first to benefit from soaring demand, but there is a number of stocks aiming to join them in the next few years.

Germany-based geothermal lithium play Vulcan Energy (ASX:VUL) is up a market-spanking 3374% over the past 12 months.

The company just completed a mammoth $120m institutional placement to accelerate Phase 1 development of its Zero Carbon lithium project in Germany, which will cost ~$1.09 billion to build.

Cornerstone investment came from Gina Rinehart-led Hancock, “one of the most successful private companies in Australian history and a leader in the resources industry”.

Last year, project developer Piedmont Lithium (ASX:PLL) signed a binding five-year agreement with US electric vehicle maker Tesla (NASDAQ:TSLA) for the supply of spodumene from Piedmont’s North Carolina deposit.

This partnership has seen the stock price skyrocket from 10c in September to 93c as of today.

Advanced explorer ioneer (ASX:INR) recently raised $80m to progress its Rhyolite Ridge lithium project, also in the US. The company is currently focussed on offtake and finance.

AVZ (ASX:AVZ) may not be in the safest jurisdiction – Democratic Republic of Congo – but its Manono project contains one of the largest, highest grade lithium deposits in the world.

High risk, high reward.

The stock is currently in a trading halt pending the release of an announcement “in relation to an execution of a binding offtake agreement”.

RARE EARTHS

The only major rare earths producer on the ASX, Lynas (ASX:LYC), has soared on strong prices for neodymium-praseodymium (NdPr) oxide.

There are a number of Aussie exploration stocks looking to join them.

The most advanced is Vital Metals (ASX:VML), which is prepping for first production at its Nechalacho project in Canada in Q2 this year.

Subsequent project expansions will be largely funded via product sales, Vital says, with the big Stage 2 mine due to kick off in 2024.

“Australia’s next rare earths producer” Hastings Technology Metals (ASX:HAS) intends to kick off early infrastructure activities at the project in the June 2021 quarter.

“Yangibana’s proposed production of 15,000 tonnes per annum of a mixed rare earth carbonate (MREC) is an intermediate product that is sought-after by its German customers to form part of the European supply chain,” the company says.

“The Yangibana MREC, when separated, is equivalent to 3,400tpa of neodymium and praseodymium (NdPr), representing approximately 7% of the current global volume of NdPr oxides.”

Arafura Resources’ (ASX:ARU) advanced Nolan project in the Northern Territory is also a globally significant NdPr project.

Offtake and project funding is currently the main focus, the company says.

COBALT

There is only one pure play cobalt stock in the ASX: Cobalt Blue (ASX:COB).

COB fired up pilot plant production in Q1. A pilot plant is smaller version of the real thing, designed to test whether the process works in the real world.

COB says it is currently working with 15 global partners who have expressed interest in receiving cobalt samples, including big players like LG International, Mitsubishi Corporation and Sojitz Corporation.

GRAPHITE

Prices are going up as incumbent ASX graphite producer Syrah (ASX:SYR) preps to restart production at the Balama operation ahead of schedule.

Syrah’s share price may be well below time highs, but graphite’s ‘new breed’ is coming in hot.

South Aussie project developer Renascor (ASX:RNU) – now up  ~1320% in 2021 — has just signed an offtake memorandum of understanding (MOU) with a $1.7 billion battery chemicals trader.

In Europe, Talga (ASX:TLG) and Mineral Commodities (ASX:MRC) are prepping to move up the value chain.

Talga is planning first anode production in Sweden in 2023, while Mineral Commodities already has an operating mine in Norway where there is “opportunity to improve the current flowsheet to produce high grade, high value product”.

And Novonix (ASX:NVX) has just raised ~$146m to scale up anode production in the US to 10,000 tonnes per year.

It plans to reach an annual production rate of 40,000 tonnes by 2025.

COPPER

The copper price recently hit nine-and-a-half year highs and the three main pure play Aussie producers – Aeris (ASX:AIS), Sandfire (ASX:SFR), and Oz (ASX:OZL) — are making great coin.

Next cab off the rank are the project developers hoping to ride the copper supercycle into record profits — like Venturex Resources (ASX:VXR), Orion Minerals (ASX:ORN), Caravel Minerals (ASX:CVV), Havilah Resources (ASX:HAV), and Hillgrove Resources (ASX:HGO).

NICKEL

While current producers like BHP (ASX:BHP),  IGO (ASX:IGO) and Western Areas (ASX:WSA) are enjoying  current high prices, Tesla alone needs ~26% of projected nickel supply by 2030.

We’re gonna need a lot more.

Luckily there’s been an extraordinary number of high profile WA nickel discoveries over the past 12-18 months.

They include Chalice Gold Mines’ (ASX:CHN) Julimar, Legend Mining’s (ASX:LEG) Mawson, Poseidon’s Golden Swan, Estrella Resources’ (ASX:ESR) Carr Boyd, and Azure’s (ASX:AZS) Andover.

Meanwhile, WA-based Mincor (ASX:MCR) just raised $55m to develop its Kambalda nickel operation, which is now fully funded through to production.

Panoramic (ASX:PAN) aims to have its Savannah project in a position to be ready to commence a rapid restart of nickel, copper and cobalt production in the second half of 2021.

And fellow WA project developer Poseidon (ASX:POS) is targeting first nickel production in 2022.

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