News: WSA Western Areas Ltd Posts FY Sales Revenue $308.4M Vs $268.7M, page-4

The dynamics at play with the SP is interesting.

Price goes down and Western Areas (WSA): Raised to Outperform at Credit Suisse; PT A$2.50

Current costs was A$3.13 and they are predicting A$3.25 to $3.75 so if you pick something in between say 10% not to bad given what they will do and why.

The EV Nickel storm is coming and this can be seen in the movements in price:


This price movement up is needed to support the extra nickel needed for EV's allowing for room for companies like WSA to mine the lower quality resources. This won't happen overnight, but is on the horizon!

In the next 12 months Tesla will have 2 new factories pumping out EVs. Anyone reading and not interested in EVs (simply because in Aus we are in an anti EV bubble) I highly recommend reading up on how many new cars that will equate to in 12 months time. It is then easy to work out what will happen in 12-18months time. Tesla is only one auto, there are many more with major production accelerations (e.g. Rivian and VW) that will also be scrambling for HQ nickel.

I hope I have helped put things into perspective anyone that may be thinking going long. Traders please keep doing as you are. Good luck all!

Article of interest:
In the popular imagination, lithium is the element that powers EVs. However, as Elon Musk has pointed out, the term “lithium-ion batteries” is something of a misnomer, because they don’t really contain that much lithium. “Although [they’re] called lithium-ion, the actual percentage of lithium in a lithium-ion cell is approximately 2%,” Musk explained at Tesla’s 2016 shareholder meeting. “Technically, our cells should be called nickel-graphite, because the primary constituent in the cell as a whole is nickel.”

More recently, Musk reiterated the importance of nickel, and made what sounded to some like an urgent plea for more of the stuff. “I’d just like to re-emphasise, any mining companies out there, please mine more nickel,” said Musk during Tesla’s latest quarterly conference call. “Wherever you are in the world, please mine more nickel and...go for efficiency, obviously environmentally-friendly nickel mining at high volume. Tesla will give you a giant contract for a long period of time, if you mine nickel efficiently and in an environmentally sensitive way.”However, meeting the expected surge in demand for element #28 may not be so easy, because of various supply-side issues. In a recent interview with **promotion blocked** News, Michael Beck, Managing Director at Regent Advisors, said he sees something of a “perfect storm” brewing in the nickel trade.

A Tesla Model 3 contains around 30 kilograms of nickel, Beck told **promotion blocked**’s Michael McCrae. “Nickel is probably the single most important metal component in battery fabrication. It’s where all of the energy is stored, and increasingly battery chemistries are being refined to allow the inclusion of as much nickel as possible. The more nickel, the higher the energy density of the battery.”The spotlight on nickel is a recent development. Nickel prices collapsed in 2007, and there’s been little development of new capacity since then, says Beck. “In this intervening almost 12 years there was no material investment in new nickel capacity. The last 12 years has been a drawdown of excess inventory, and that’s coming to an end. The ramp-up of demand is just beginning.”The long lead time for bringing new nickel mines into production is another constraining factor. “It takes 7 to 10 years to bring on new nickel projects,” says Beck. “So, you have the makings of a perfect storm. You have a baked-in structural deficit for the next 12 years...you have inventories in the next 18 months going down to almost zero. You also have this new demand source that never existed for nickel.”

All that would seem to add up to an investment opportunity for somebody. “In the universe of metals, [nickel is] our favorite,” says Beck. “We think in the next two to three years you’re going to see a major up-tick of the nickel price...as shortages emerge, and that’s what’s going to be required to get new investment in the sector.”