SL...'tis a very good point re copper & EV's
Guess we could look at a simple equation (poss knock on effects):
Increased EV & battery production & demand in coming years = increased raw materials required such as copper, lithium & cobalt.
Already seeing the lithium knock on and I have posted some articles re cobalt supply chain issues previously as has
@specgoldbug and others.
The copper side though is also doubled up as not only needing the raw material itself for the EV but also that cobalt is a by product of copper (and nickel) production and that byproduct makes up more of the worlds supply than actual cobalt mines as a primary source (less than 6% apparently from direct mining so far).
Couple of snips from my original post on the 20/4 (link -
http://hotcopper.com.au/posts/17561306/single)
My question in the post after reading the articles:
So...do we have the possibility of an increased focus on copper / nickel producers and a required demand for their primary product to sustain cobalt levels to meet its demand? Be interesting to see how those miners (& commodity) react over the coming couple of years I guess. Thoughts anyone?
Statement in the article I found interesting:
"Over the last two weeks I’ve spoken with a wide variety of professionals including battery experts, miners, the USGS and the CDI.
The battery experts invariably assumed that since cobalt trades on the LME, the world’s miners can and will quickly respond to increased demand by boosting supplies and reducing prices due to economies of scale. The miners, the USGS and the CDI agree that it simply can’t happen that way because cobalt is a by-product of copper and nickel mining and by-product availability is always constrained by demand for the primary products."
One other analysis statement:
"With rare exceptions, however, cobalt is produced as a minor by-product of nickel and copper mining. As a result, global cobalt production ramps up and down as nickel and copper miners respond to global demand for their primary products. Since less than 6% of global cobalt production comes from mines that produce cobalt as a primary product, cobalt supply cannot respond to normal market signals. After all, no rational nickel or copper miner will put additional pressure on prices for its primary products because it wants to sell a little more cobalt. Glencore and other international mining companies are suspending operations at marginal and unprofitable mines around the world.
Therefore, cobalt production is expected to spike down in 2016 and remain at low levels until nickel and copper prices recover."
