Running discussion on SP, page-50076

I am very confident AVZ will be a dividend paying stock in years to come. When the revised DFS/BFS comes out with insanely good numbers it will be evident that any payback period on debt component will be very short.


AVZ is in the throes of securing the all-important mining licence approval with the newly elected DRC government which it is anticipating shortly.

In the meantime, the company is putting the finishing touches on its optimised definitive feasibility study, “or DFS” which is due to be released to the market any day.


Europe’s largest auto show pits climate activists against car industry

Europe’s largest car fair IAA is set to become a showdown between climate activists and an automotive industry eager to prove its green credentials when it takes place next month.

The show, which has been moved from Frankfurt to Munich as part of a bid to keep up with changing times, says it has shifted its focus from cars alone to future low-emission mobility, including bikes and buses. But environmentalists denounce “greenwashing” and plan to disrupt what they describe as a “climate-killer party”.

Only weeks before Germany’s general election, the event will shine a spotlight on the complicated transition to sustainable mobility in the birth country of the automobile.

Europe’s largest car fair IAA will focus on green mobility instead of cars alone, but climate activists decry the move as “greenwashing” and plan to disrupt the “climate killer party”.

German car industry association VDA plans to host the event in Munich, where it has moved from its traditional location in Frankfurt as part of a reinvention, shortly before the country’s general election in September.

“It is important that we as the automotive industry can show that we are ready for the mobility of tomorrow,” said VDA managing director Jürgen Mindel, according to a report by Wolfgang Gomoll in Heise Online.

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“We will still see cars with combustion engines in Munich, but the clear focus is on the future of propulsion. On battery-electric mobility, plug-in hybrids and similar formats.”

With 50 bike exhibitors and bike test tracks, the fair is also the “biggest bike event in Europe,” according to the lobby group.

The fight against climate change is one of the core issues in the German election campaign, and the shift to zero-emission mobility has emerged as one of the most controversial topics.

The issue of introducing a general speed limit on Germany’s autobahns has become a hot potato of the campaign, and in the background looms the big question of whether Germany should introduce a phase-out date for the sale of combustion engine cars.

The transition to green mobility is particularly sensitive in Germany because more than 800,000 manufacturing jobs directly depend on the car industry.

The country is home to global car brands Volkswagen, Audi, Porsche, Mercedes-Benz and BMW, which have been slow to embrace the shift to electric mobility and continue to depend on the sale of horsepower-proud combustion engine cars to make money.

“Last opportunity” to prove green credentials

German chancellor Angela Merkel will attend the official opening on 7 September, underlining the political relevance of the show.

The IAA is “the car industry’s last opportunity before the federal elections on 26 September to demonstrate to the public and politicians that it not only takes climate protection seriously, but is also already on its way to the era of not only emission-free, but also smart mobility,” writes Franz Rother in mobility magazine Edison.

Christian Hummel, head of the business consulting agency Capgemini Invent, said the IAA had increasingly lost touch with wider society and needed to reinvent itself to stay relevant.

“It must be about picking up on socially relevant trends as well and presenting mobility trends of tomorrow to the general public to arouse interest,” he told Heise Online.

Germany has been struggling to lower emissions in the transport sector, which have remained broadly stable for decades as gains from more efficient engines have been eaten up by heavier cars.

How Tesla’s Model 3 triggered The Osborne Effect, and caused the ICE market to melt

The downturn in global new car sales started in 2017, steepened in 2020 thanks to Covid, and even though it has rebounded in many markets in 2021, it is still below the levels of 2019.

Worldwide new plug-in electric vehicle sales were up over 43% year-on-year, from 2.26 million in 2019 to 3.24 million in 2020.

That delivered plug-in electric vehicle sales – both full battery electric and plug in hybrids – a 4.2 per cent share of the global new car market in 2020.

Looking closer for a moment at the trend shown in figure 1 (above), EV uptake appears to be following the typical uptake curve of all of our most ubiquitous current technologies, as shown in figure 2 (below)



If EVs are following this path, it may not be long before the ICE (Internal Combustion Engine) vehicle goes the way of (and as quickly as) the horse and carriage.

This would be far faster than current industry predictions of 30 to 50% new EV sales by 2030.

The Osborne Effect at play?

I would like to suggest an alternative explanation: that all three trends taken together are an example of ‘The Osborne Effect’.

The term was coined after the collapse of the Osborne Computer Company, when customers stopped buying the company’s first computer product after the premature announcement of its successor before it was available.

The Osborne Effect is defined as “a social phenomenon of customers cancelling or deferring orders for the current soon-to-be-obsolete product as an unexpected drawback of a company’s announcing a future product prematurely”.



You can easily apply this to EVs: cars that can do everything an ICE vehicle can have been around ever since the Tesla Model S arrived.

Given its capabilities, and the move to mass production heralded by the announcement of the Model 3 (which coincidentally went on sale in mid-2017) – I would contend that new ICE car purchasing has become ever more delayed as people await the arrival of mass market EVs from the rest of the manufacturers.

This is because EVs are seen as the better (and inevitable) vehicle technology that is close to being readily available.

Especially so as EV prices are generally expected to soon be comparable to ICE ones.

In an effort to seemingly slow Tesla sales, the major manufacturers have effectively been feeding the Osborne Effect by constantly announcing coming EV models – but delaying their introduction or manufacturing them in limited numbers.

In that light, falling new ICE sales and rising second-hand sales (and therefore prices) make sense.

As the EV versus ICE price parity point draws closer, buying an ICE vehicle makes less and less sense as it is seen likely it will quickly become obsolete, with a resale price to match.

Instead, hanging onto the existing ICE vehicle, or if necessary buying a second-hand ICE to ‘tide one over’ would be the more sensible move.

This could also go some way to explaining why ever older second-hand vehicles are now becoming popular buys – acceptable EV pricing and availability are seen as getting closer and the temporary ICE vehicle is needed for less time.

To me, this is a better explanation for, and potential connection of, the three trends than that offered by the traditional explanations.

I would also suggest the automakers themselves are quietly acknowledging an EV induced Osborne Effect, for they are now starting to bolt for the EV door.

GM, Ford, Volvo and VW group have all set dates ranging from 2025 – 2035 for the cessation of ICE vehicle production, whilst others are setting targets for the electrification of their new fleet offerings.

Examples also include Stellantis* (the world’s fourth largest auto group) announcing that by 2030 they plan to have PEV sales of over 70% in Europe and over 40% in the US and the Jaguar Land Rover group (JLR) moving the Jaguar brand to full EV by 2025.

Even Toyota (the stand-out laggard on full-battery EVs, despite taking the early hybrid lead with the Prius way back in 1997) has recently announced the dedicated all-electric vehicle e-TNGA platform and stated their intention to release 15 new battery-electric vehicles by 2025.

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Meanwhile, the market leader in EVs (Tesla) is doubling its 2020 output of around 500,000 vehicles to reach 1 million this year …. with two more Gigafactories nearing completion and expected to begin production late this year or early next. Plus there are growing rumours of a new ‘mass market’ small Tesla in the wings.

Tesla has also recently inked a deal with BHP to provide nickel from the Nickel West mine in WA that includes plans to make the battery supply chain more sustainable.

Given Tesla’s dominance in EV tech, rapidly growing production capacity and general commitment to sustainability – it is hardly surprising that Tesla is around eight times the current value of GM … and thirteen times that of Ford.

So over to you – the reader.

Are we seeing the start of an Osborne Effect triggered by Tesla and accidentally reinforced by the majors?

Will the EV Transition happen much faster than the industry predicted levels of 30 to 50% new EV sales by 2030 – instead hitting 80% or more of new car sales like Norway is now?

Will the vast majority of models in showrooms soon be electric powered simply because no-one will buy ICE ones anymore? … And will ‘electric cars’ soon be so ubiquitous that we drop word ‘electric’ from their description?

* Note: Stellantis: the world’s fourth largest auto group. Their stable of brands include Peugeot, Citroen, Opel, Vauxhall, Jeep, Fiat, Chrysler, Ram, Maserati and Alfa Romeo.

https://thedriven.io/


BHP in Talks to Exit Oil and Gas Business

BHP cut its oil and gas production by half in the last three years after selling its U.S. shale assets to BP in 2018.

Analysts expect the group to focus its activity on producing metals used in the green transition, notably battery materials such as nickel.

www.marketwatch.com