High Voltage: That ‘15% EV penetration by 2024’ prediction is impossible

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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.

INDUSTRY FOCUS

Last week LG Chem — one of the world’s biggest manufacturers of electric vehicle batteries — predicted that global EV sales would grow more than five-fold from 2018 levels to account for about 15 per cent of global vehicle sales in 2024.

It also said battery costs would fall to $100 per kilowatt hour in 2025 on average, from $200 in 2015, according to Reuters. That’s the point at which EVs become more affordable than internal combustion models.

But 15 per cent by 2024 is huge. It will require huge growth in the raw materials supply chain.

Benchmark Minerals @benchmarkmin EV penetration by 2024 is 12.3%, difference of 2.7% to LG Chem’s 15%

But that difference equals:

14,500 t cobalt
90,000 t nickel
101,000 t lithium LCE
150,000 t graphite anode

Granularity is key. @benchmarkmin https://t.co/4k5Yyygq9d https://t.co/Y9dMxZmaIw

— Simon Moores (@sdmoores) October 17, 2019

We currently don’t have enough battery metals projects in the pipeline to hit that target.

For instance; in 2023 there will only be enough battery quality lithium available to meet the equivalent of Tesla’s (1.32 million) and VW’s (1.9 million) EV sales targets, according to Rodney Hooper.

#LGChem seeing AVERAGE battery prices=$100/kWh 2025. My forecast is #VW & #Tesla =2022 or 2023. 13.2m EV sales=2024. Even if the avg EV size=50 kWh=~561kt of #lithium, esp hydroxide. IMO no chance of that. Maybe enough for ~8m EVs. S-T oversupply then S curve then under supply pic.twitter.com/3QrMZWhErN

— Rodney Hooper (@RodneyHooper13) October 17, 2019

SMALL CAP SPOTLIGHT

Of the companies on our list, 67 lost ground, 43 were ahead and 39 were steady this week. Here’s where all the winners came from:

Australian Mines (ASX:AUZ) +26%

Market Cap: ~$100m

Right now, Australian Mines is finalising a very large, very complex financing package for the Sconi nickel-cobalt development in Queensland.

Last week, it appointed Les Guthrie to the board. Guthrie has more than 40 years’ experience delivering projects across the mining, infrastructure and energy sectors. He is also the boss at Bedford Road Associates, which helps develop and deliver major capital expenditure programs. Like Sconi.

“It is with pleasure that I join the Australian Mines’ board and look forward to helping the company execute its goal of becoming a major producer of cobalt sulphate and nickel sulphate chemicals for the electric vehicle sector,” Guthrie says.

“I hope to support those efforts at the board level by sharing my global industry experience.”

READ: Is it almost time to get excited about cobalt again?

Mithril (ASX:MTH) +20%

Market Cap: ~$2.5 million

A maiden drill program at the Limestone Well Project in WA has already defined a major vanadium-titanium target.

Mithril have hit a continuation of Neometals’ (ASX:NML) advanced Barrambie vanadium-titanium deposit (280.1 million tonnes at 0.44 per cent V2O5 and 9.18 per cent TiO2) – which is right next door.

READ: Neometals taps a cashed-up Chinese partner to help develop the Barrambie vanadium-titanium project

Jindalee Resources (ASX:JRL) +13.5%

Market Cap: ~$8.5 million

Jindalee might need to upgrade the exploration target at the flagship McDermitt sedimentary lithium project in the US.

That’s because the mineralised area just keeps getting bigger.

“The combination of multiple mineralised intervals, increased real extent, and greater vertical thickness is strongly supportive of a significant upgrade to the current Exploration Target Range of 160-780 million tonnes at 1300-1600 parts per million lithium,” the company says.

“Shallow depths of mineralisation [also] imply low strip ratios in any future potential development scenario.”

Comet Resources (ASX:CRL) + 8.3%

Market Cap: ~$7 million

Comet Resources just hit a very thick, very high grade graphite intersection at the Springdale project in WA.

The very first diamond drill hole targeting identified high-grade graphite mineralisation in the Northern Zone intersected up to 57m grading 22.38 per cent Total Graphitic Carbon (TGC), 35.5m from surface.

“What wonderful results from the first diamond drill hole into the Northern Zone, especially considering how high the grade is over such a broad zone!” Comet chief exec Phillippa Leggat says.

“This is an exciting time for Comet, with the balance of our drilling results to come and metallurgical results to follow, investors can expect great news flow over coming weeks and months.”

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:

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