High Voltage: here’s all the latest news driving ASX battery metals stocks
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Each week our High Voltage column wraps all the news driving ASX battery metals stocks with exposure to lithium, cobalt, graphite, manganese and vanadium.
>> Scroll down for a table showing the recent performance of 200 ASX battery metal stocks
Could cobalt follow lithium and make a resurgence? Cobalt sales prices –albeit still relatively healthy from all reports — have been in slow decline since peaking early in the year.
Enter major miner, Glencore, which has cut production at its soon-to-be globally significant Katanga operations in the Democratic Republic of Congo for at least 7 months.
This could stabilise recent price declines caused by a perception that the current cobalt market is oversupplied, experts say.
Analysts are divided on whether the supply side impacts will be significant or not.
But they do agree that this event could put a floor underneath the price of the battery metal and even catalyse a new period of growth – with cobalt stocks set to benefit.
And Australian hard rock lithium projects received a boost from major miner Albemarle (NYSE:ALB) in general this week.
The global miner told investors that “a significant acceleration in demand for lithium hydroxide” from battery makers — at the expense of the industry standard lithium carbonate — prompted it to favour developments in Australia and hit pause on expansions at its Chilean brine operations.
This is because it is often cheaper to produce lithium hydroxide from hard rock.
Vanadium remains of the year’s best performing metals measured by its spot price, which has risen above $US37 per pound — up from $US5 in early 2017.
While the spot price is “a little too high at the moment” to be sustainable, they are expected to stabilise at about $US30/lb in the short term – far healthier than the $US4 to $US6 range it bounced between from 2009 to early 2017, David Gillam of mining industry consultancy Mastermines says.
But only about 10 per cent of vanadium projects are good enough to become long term operations, Mr Gillam says.
“We are looking for someone that can be the next [major vanadium producer] Bushveld or the next Largo,” he says.
“This means ore grades of around 0.8 per cent to 1.2 per cent for starters.”
But most importantly a project needs operating costs of about $US4/lb of vanadium produced.
“That’s really critical because we know the Chinese – who want prices to drop – want to align themselves with companies that can produce around that Largo [ a major producer of vanadium] price of around $US4/lb,” Mr Gillam says.
Nickel prices may remain weak for the next couple of years, but an increase in demand from battery makers makes the outlook extremely promising two to three years out.
This means junior nickel players heading towards production will be bringing their mines online at a time of rapidly rising demand.
“Demand for nickel in lithium-ion batteries will soon make batteries the second-largest end-use application for nickel,” Roskill says.
And small caps in the nickel and copper space are catching the eye of investment banks and other big investors as the EV revolution gathers steam.
Investment bank Canada’s IBK Capital Corp has set its sights on nickel and copper small caps with projects in Latin America and Africa.
“Given where we see demand for electric vehicles going [and] the evolving battery chemistry universe, nickel is something that we’re paying quite a close attention to,” IBK Capital senior vice president Miranda Werstiuk said at last week’s International Mining and Resources Conference in Melbourne.
“The other is copper —given the need for copper in electric vehicles.”
Investor confidence in the small cap space continues to look more positive. Of the 200 battery metals stocks on our list, about 65 lost ground, 81 were ahead and 53 were steady last week.
Some of the big winners were Monax Mining (ASX:MOX) up 50 per cent to 0.3c; First Cobalt (ASX:FCC) up 33 per cent to 28c, and Ardea Resources (ASX:ARL), up 28 per cent to 69c.
Potential near term nickel- cobalt producers Australian Mines (ASX:AUZ) and CleanTeq (ASX:CLQ) received 15 per cent and 17 per cent share price bumps, respectively.
The share price of Australia’s newest lithium producer, Altura Mining (ASX:AJM), was up 12.5 per cent to 22.5c for the week after securing a long-term supply deal with Chinese major Ganfeng Lithium.
The deal starts this year, with Altura to supply a minimum of 8,000 tonnes of lithium from its namesake mine in 2018 and increasing supply to 70,000 tonnes each year from 2019 to 2021.
Long Term Binding Offtake Agreement Secured – https://t.co/DIASQlr1CI Altura is pleased to announce a new binding offtake agreement with GFL International Co., Limited, a wholly owned subsidiary of leading global lithium producer in Ganfeng Lithium. pic.twitter.com/y35Mh5gHmh
— AlturaMining (@AlturaMining) November 8, 2018
And King River Copper (ASX:KRC) bounced back last week, recording a 32 per cent share price increase to 4.5c.
Here’s a table of ASX battery metal stocks with exposure to lithium, cobalt, graphite, manganese and vanadium:
Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop