"A classic economist would say that the best cure for high prices is high prices, which is generally true. Translation (in the metals context): Outrageous prices for copper, nickel, cobalt and lithium will trigger extra production, flooding the market with these metals and bringing their prices down to their historic norm.
Not so in this case. While the in-ground reserves of some metals are genuinely in short supply, such as copper, others, notably lithium, are blessed with generous reserves on several continents. But that’s not the point. The point is that building mines to extract the lithium, and plants to process it, can take five to 10 years. Cobalt mines can taken longer. “The biggest hurdles, in my view, are ecological, social and political – not geological,” Mr. Pitron says.
Every big automaker in the world is ramping up EV production. Forecasts say that tens of millions of these cars will be produced each year by the middle part of this decade. Maybe not. In the United States alone, about 13 lithium-ion plants are in the construction or planning stages – but what is not known is where the lithium will come from. There is only one operating lithium mine in the U.S. European and Japanese carmakers face similar supply constraints.The EV revolution is beginning to look like an evolution. EVs are coming, but not at pedal-to-the-metal speeds."
SRL Price at posting:
$2.90 Sentiment: Buy Disclosure: Held
