High Voltage: Want to invest in the most promising battery metals stocks, but don’t know where to start?
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Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, manganese, magnesium, and vanadium.
The nascent transition to ‘clean’ energy is a megatrend, a nigh-unstoppable force that will ultimately transform society and the global economy.
This megatrend is birthing a range of disruptive products and processes such as renewable energy generation, battery storage, and electric vehicles.
All of these are dependent on a select group of energy transition metals (ETMs), like lithium, cobalt, REEs, graphite, copper, nickel, and so on.
But when it comes to investing in the most likely ETM-facing stocks and sectors, things can get confusing.
Do you invest in producers, project developers or explorers? Where is the safest place to put money for long term returns? Which metals show the most promise over time?
One way to streamline this process is via ETM ETFs run by fund managers like Betashares, Global X, iShares and VanEck.
Punters are generally able to start investing in ETFs with as little as $500 via most brokerage platforms.
VanEck’s Global Clean Energy ETF (ASX:CLNE) focuses on the largest companies related to clean energy production and clean energy tech.
iShares also has a Green Metals ticker offshore.
BetaShares’ Energy Transition Metals ETF (ASX:XMET) – which also launched on the ASX late October — provides exposure to global copper, lithium, nickel, cobalt, graphite, manganese, silver, and rare earths producers.
“We think that … approach really works,” he told Stockhead.
“There are a lot of people that don’t have the time or energy to dig around for [individual] investments.”
XMET tracks an index of global stocks put together by Canadian asset manager Sprott, which has developed a great deal of expertise across the ETM space. Investors can check the individual stocks included, and their weightings, on the website. The fund is rebalanced twice a year.
“Essentially, they were looking for the materials which will have a material uplift in demand due to the clean energy thematic, with conditions which will create tightness in supply and lead to an uplift in prices,” Gleeson says.
“There’s also very little ability to substitute these materials in technologies. They also include metals which nations [deem] critical and where there are strategies to support the production of these metals.”
Lithium, cobalt, copper, nickel, manganese, and graphite – most of these ETMs are used in batteries and are therefore obvious inclusions.
But some aren’t, like silver.
“It is the most conductive metal available,” says Gleeson.
“It is used parts of electric vehicles and in solar panel cells. It is also very difficult to substitute.
“There are also potential uses for silver in solid state battery technology. Currently, battery anodes are made from graphite, but there is the potential for a silicon-silver anode material to be developed.
“There are quite a few reasons why silver is a good play, a good thing to include in the overall fund.”
XMET also includes a diversified bucket of up to six stocks involved in recycling, refining, and smelting.
“There is a lot of support coming out of the EU especially for battery recycling so we think that will be an important part of the supply picture,” Gleeson says.
Here’s how a basket of ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, magnesium, manganese, and vanadium is performing>>>
Battery metals stocks missing from our list? Shoot a mail to [email protected].
TKM is up +100% since announcing rock chips grading up to 3% lithium at the Tambourah project in the Pilbara region of WA.
The explorer has now defined multiple stacked pegmatites outcropping at surface, extending over an area of at least 4km2.
These have never been drill tested, TKM says, “highlighting a significant opportunity to make a greenfields lithium discovery”.
It also completed the acquisition of a tenement from Pilbara Minerals (ASX:PLS) Monday. This ground is adjacent to TKM’s existing Pincunah project and is “prospective for new gold and base metal discoveries”.
TKM has one of the most experienced lithium boards on the ASX in Neil Biddle, John Young and Tony Leibowitz, who took Pilbara Minerals from sub-$10m shell to +$1bn lithium miner in under five years.
WR1 caught a rocket after announcing a “significant pegmatite intercept” late October at the Adina lithium project in Canada.
All up, 160m of pegmatite was intercepted in drilling below the recently discovered, well mineralised Jamar outcrop at Adina, it said late October.
“While the Company expects the return of assays from the laboratory to take approximately 6-7 weeks, visual inspection of diamond drill core samples from Adina show the pegmatites to be consistent with previously reported surface mineralisation,” it said.
In response to a November 2 price query from the ASX, WR1 said: “With this series of encouraging exploration results being made public, there appears to be a recognition that WR1’s market capitalisation is low when compared with many of its peers in the lithium exploration market.”
The 12,000m drilling program currently underway will culminate in a maiden resource at the Adina and Cancet projects in 2023.