Resources for batteries tipped to surge

TNG mentioned below!!



Resources for batteries tipped to surge

PUBLISHED: 18 hours 53 MINUTES AGO | UPDATE: 11 hours 41 MINUTES AGO PUBLISHED: 03 Jul 2014 PRINT EDITION: 03 Jul 2014

Electric cars like the Nissan Leaf are boosting demand for batteries. Photo: Bloomberg
Eryk Bagshaw

Booming global demand for battery powered cars and portable electronics devices is tipped to provide a boon for a handful of Australian miners supplying the key resources of nickel, graphite and vanadium.
Credit Suisse analysts highlighted the opportunities in a note issued to clients on Wednesday, recommending nickel miner Western Areas and graphite and vanadium miner Syrah Resources. Credit Suisse is also tipping aluminium producer Alumina will benefit from increased demand for the lightweight metal favoured in the production of electric cars.
“These companies are already starting to see the benefit of advances in energy storage,” said Credit Suisse analyst Adnan Kucukalic. “Energy storage is a big change that the world is currently undergoing, if we can get it right, there are all sorts of opportunities for investors.”
Nickel, graphite and vanadium are used in the manufacture of lithium batteries, considered the most efficient battery technology on the market. A lithium ion battery is 40 per cent nickel or cobalt.
The world’s largest electric vehicle manufacturer, Tesla, which has started taking orders for the first electric cars it will deliver into Australia, has opted for a nickel dominant mix, over the alternative cobalt mix.
Tesla, announced last month it will build a $US5 billion ($5.3 billion) battery manufacturing facility, while also removing all patents it currently has over electric vehicle technology.
The Credit Suisse report also notes Boston power, a US company manufacturing in China, has produced a battery that potentially lasts up to 500,000 kilometres before experiencing any loss in battery capacity. Such technology could increase demand for electric cars.
Credit Suisse analyst Adnan Kucukalic said electric car production could swell to account for half the global car stock over the next two decades, leading to a scarcity of nickel supply.
“If it does, there simply is not enough of it at the moment to sustain those levels of production,” Mr Kucukalic said. “As supply runs short, nickel prices will rise, benefiting investors who get in early.”
The surge in demand for the key battery ingredients of nickel, graphite and vanadium is already being picked up by some investors. Western Areas soared 96 per cent in the financial year ended June 30 to $4.81 as nickel prices climbed 34 per cent to $US202.80 a tonne amid global supply worries after Indonesia toyed with an export ban.
Western produces some of the highest quality nickel in the world at its two mines in Western Australia, Flying Fox and Spotted Quoll, Mr Kucukalic said.
Syrah Resources, an Australian company with graphite operations in Mozambique and plans for expansion into Tanzania, has climbed 107 per cent to $4.19 over the past 12 months.
High quality graphite is also essential to improve the performance and price of lithium ion batteries. Syrah also owns an undeveloped vanadium asset. Battery industry experts have tipped vanadium could be the key to bulk energy storage, although the technology is still in early development .
Alumina, a producer of Aluminium, is tipped by Credit Suisse to pick up gains, thanks to the demand for the lightweight aluminium needed for efficient electric cars. It’s stocks are up 23 per cent over the year to date.
There are a number of other small players listed on the ASX producing metals used in lithium battery production, not highlighted in the Credit Suisse report. Northern Territory vanadium explorer TNG is one such stock, at $0.19.