Something to remember about compound growth in all this...
If we get to 30m vehicles by 2025, and I personally think we will (and some) then according to the McKinsey work we are looking at something like 500kt+ class 1 nickel, purely for batteries - this doesn't include the potential for increasing demand for other applications.
Now throw 10-15%/pa growth on top of 500kt, and what do you get? 50kt+/pa new growth each year. That is two and a half new ARL's at the 2.25Mt throughput that need to come online, JUST TO MEET NEW DEMAND GROWTH.
Take this further, as we go to say 60m vehicles beyond 2025, factor in improvements to technology/efficiency etc, and assume class 1 nickel demand is closer to 800kt+, 10% growth on that is FOUR NEW ARL'S AT 2.25MT JUST TO MEET NEW DEMAND GROWTH. Note Mckinsey thinks that if cobalt supply is unconstrained, we could go to 800kt class 1 nickel demand by 2025.
All the big battery makers will know this. They know the trajectory their customer's are on. This is why we see news story after news story about the billions being invested to ramp up capacity.
Ok, I am a bull on all this, I concede that, but even accounting for efficiencies at the battery and car level, the ability to make sulphates form lower grade nickel (good luck to the Chinese going down this path with their friends in Indonesia), etc etc, the compound growth we are going to see is phenomenal, once in a lifetime transition stuff.
I met with a company on Friday that is making electric light passenger planes - these will be in the market and operating by 2021 and are going to be a big deal. There is nothing is the McKinsey work about stationary storage applications, converting trans and ships to hybrids or pure electric, passenger drones... the list goes on.
This is why ARL is doing the right thing in delaying the strategic process. When the time is right, the price will be right, because the big fish up the food chain are going to be desperate to ensure they don't go hungry...
