High Voltage: Here’s all the news driving battery metals stocks
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 >>
Fears of lithium oversupply continue to fade despite rating service Moody’s heading for that familiar well again in its latest note.
This is partially because supply ramp-up is seeing its share of issues, Benchmark Minerals Intelligence boss Simon Moores recently told Stockhead.
“Clearly, the Atacama [Chilean lithium brine operations] scaling is proving problematic, which adds to the view that major oversupply in lithium has not, and will not, come to fruition anytime soon,” he says.
Australia is bringing more spodumene lithium supply online next year, but this supply is being locked up by the big two Chinese producers, “leaving questions over how other lithium chemical producers will get reliable, reasonably priced feedstock”.
“These are only two [parts] of an increasingly complex lithium supply picture – a sign of a rapidly scaling supply chain,” Mr Moores says.
“All these issues for lithium supply have reared their head in 2018. Expect more of the same in 2019.”
SK innovation, a Korean developer and manufacturer of lithium-ion batteries for hybrid electric vehicles, will create more than 2,000 jobs and invest $1.67 billion in a new manufacturing plant in Jackson County. Read more: https://t.co/rP95Xip3Wo pic.twitter.com/8FQsScSpmu
— Governor Nathan Deal (@GovernorDeal) November 27, 2018
The large electric vehicle (EV) battery factory count just keeps growing (more than 60 megafactories in the pipeline by 2028, according to the latest from Benchmark Minerals).
The latest big one is Korean company SK Innovation – supplier to big carmakers like Daimler and Hyundai – which is building its first US battery factory at a cost of more than $2.3 billion. Construction starts next year.
Innovation is also happening at breakneck speeds.
German chemical giant BASF has discovered that by upping the amount of manganese and using much less nickel and cobalt it can slash the cost of an EV battery by way more than half.
BASF is developing a battery chemistry that comprises 70 per cent manganese, 20 per cent nickel and less than 5 per cent cobalt.
Marco Romero, the chief of Canadian explorer Euro Manganese (ASX:EMN), told Stockhead that the development has “incredible implications”.
“The battery industry has been desperately trying to find a way to engineer cobalt out of these batteries,” he said.
“So to be able to replace the cobalt with manganese all of a sudden changes the game potentially for the entire electric vehicle industry globally.
“They’re now talking about taking the cost per kilowatt hour of batteries down to $US40 ($55.26). Until recently the industry was hoping to get to $US100 — down from where it is right now which is closer to $US200.”
According to Mr Romero, this particular chemistry make-up means electric vehicles would be just as competitive as petrol-powered cars.
Until now the push by battery makers was for a chemistry make-up of 80 per cent nickel, 10 per cent manganese and 10 per cent cobalt, shifting from the current combination of 60 per cent nickel, 20 per cent manganese and 20 per cent cobalt.
But now it looks as if manganese is the key to much cheaper batteries and a substantial reduction in cobalt, which faces supply constraints and ethical issues over how it is mined.
About 90 per cent of manganese goes into steel-making, but it’s increasingly used in next-generation battery and power storage applications.
SMALL CAP SPOTLIGHT
Of the ~200 battery metals stocks on our list, about 72 lost ground, 69 were ahead and 45 were steady.
Major small cap winners included Cohiba Minerals (ASX:CHK) up 260 per cent, Black Rock Mining (ASX:BKT) up 20 per cent, and First Graphene (ASX:FGR) up 19 per cent.
Advanced explorer Australian Vanadium (ASX:AVL) had a stronger week — up 31 per cent to 3.8c — after unveiling a bigger resource at its flagship Gabanintha vanadium project.
The revised estimate includes a high-grade zone which increased 3.3 per cent to 96.7 million tonnes at 1 per cent V2O5.
The 19-hole drilling campaign also helped fine tune the mine plan to be unveiled in the upcoming pre-feasibility study (PFS), Australian Vanadium managing director Vince Algar said.
“By incorporating these new results into our PFS, we are better able to attract the attention of key vanadium investors and market participants,” he said.
Preparation of the final PFS document is currently underway with final reports to be handed to the board in December.
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