Milewski: This metal can lead battery charge
Pala Investments’ Anthony Milewski will shine a light on the largely unheralded member of the energy minerals ‘fab four’ at Mines and Money in London this week.
- Staff reporter
- 28 Nov 2016
Milewski, vice president at the Switzerland-based mining investment firm, is speaking at the event’s Battery Metals Summit on how investors can best capitalise on opportunities in the sector. He sees cobalt among the battery metals – under-represented compared to lithium, graphite and vanadium in terms of pure-play equities – as an appealing investment avenue.
“The most interesting way to play the EV story on the basic materials side is cobalt,” Milewski told
Mining Journal.
“It is largely a by-product of nickel and copper mining and so production cannot easily be ramped up. Combine that with the fact that demand is on the rise due to the electric vehicle sales and it sets the stage for meaningful price appreciation.”
While options for investors looking for significant exposure to cobalt supply, markets and any escalation in prices is currently limited – with advanced projects few and far between – there are more than 150 listed public companies in Canada, the US, Australia and the UK pursuing opportunities in lithium, graphite, vanadium and cobalt.
Milewski says investors need to be “very discerning” when reviewing opportunities in the space.
“Very few of the projects in these companies will ever be mines,” he says.
“Some of the factors to consider are size of the project – does it have sufficient scale to warrant a mine; metallurgy – can the mineral be processed in a capital and time efficient manner; capital intensity of the project; jurisdiction; and management teams.”
But Milewski believes the underlying demand for battery metals is going to surprise on the upside, and that will be a theme of the summit in London.
“I believe analysts are underestimating the demand for EVs in the US and the speed at which consumers will buy EVs,” he said.
“The electric vehicle and electric storage themes remain one of the most exiting stories in the materials space. The key themes I see include mass acceptance of the story by automakers as they roll out new lines of cars and a very excited consumer base which I believe will buy more cars and faster than analysts predict.
“We have seen a commitment on behalf of automakers in 2016 to create new models of EVs for a broader range of consumers, further bringing the EV story to the forefront and the materials that make up the batteries that run the EVs. The story is no longer just Tesla, with multiple car manufactures now planning to produce EVs.
“It seems as if monthly we are getting announcements from automakers about new electric vehicles.
“I think there are two catalysts on the horizon [for energy minerals equity prices], the first being a general market realisation that analysts have underestimated overall demand for EVs and the speed at which they will gain penetration in both the US and China.
“And second I think that the market will come to understand the supply/demand dynamics of the cobalt market in more detail and the metal speculators will enter the market.”
http://www.mining-journal.com/events/conferences/milewski-this-metal-can-lead-battery-charge/
