The Battery Mineral Emerging from Under the RadarIt would appear...

• The Battery Mineral Emerging from Under the Radar

It would appear that auto manufacturers were among the many who underestimated the timing of the EV (electric vehicle) revolution. What else could explain the mad frenzy in the sector as car makers scurry about in a desperate search for adequate supply of the minerals and metals needed to produce the batteries to power their new product lines.

Governments have produced lists of“critical minerals”for the battery revolution in multiple markets – EVs, energy storage, consumer electronics, and industrial and defense.

With the EV market virtually monopolising the investing and finance news outlets, it is little wonder so many retail investors are fixated on the mineral that appears in the description of virtually all EV batteries in use today –lithium.

Others follow a practice common in the manufacturing sector –reverse engineering. Reverse engineering in its simplest form is the process of taking apart a product to determine its component parts. In the early days of the iPhone boom, many investors were desperately trying to identify the component parts in order to invest in those parts manufacturers.

It doesn’t take much research to learn investing possibilities lie in the metals/minerals used in the cathodes and anodes of batteries. Similarly, it quickly becomes evident to all investors looking for information to learn it is in the cathode where researchers and manufacturers are looking for improved battery performance by developing new metals/minerals composition .Thus, the early leader in li-ion batteries – the Lithium-nickel/cobalt/manganese, or NCM composition, now has competition from LFP batteries – lithium-iron phosphate. Lithium is still a critical component of all battery technologies in use today.

In the early days of the exploding interest in battery metals/minerals, some investors ignored the other mineral with no current substitute in battery technology. While researchers and manufacturers scramble to replace or reduce cobalt, nickel, and manganese in lithium-ion batteries, few are looking for an alternative to the mineral critical for the battery anode –graphite. Silicon is being assessed as an alternative, but commercialisation remains in the distant future, given the challenges researchers are facing.

In theory, this should mean graphite investments are as attractive to investors as lithium itself, as these are the two components that are common to all current battery technologies and are likely to remain so for some time. The path to a green energy future requires both lithium and graphite.

Average daily trading volumecan be seen as a rough gauge of investor interest. One of the top ten lithium producers in the world trades on the ASX –Pilbara Minerals (PLS).The shares last traded at $3.09 per share with a market cap of $9.2 billion dollars. With a market cap of $1.4 billion dollars and a last closing share price of $3.20, ASX listed graphite producerNovonix (NVX)provides such a comparison. The 30 day average trading volume forNovonixis 5.1 million shares per day while the average forPilbarais 18 million shares – more than double.

The following graph depicting the outlook in the medium term for graphite use in Low Voltage Battery Electric Vehicles (LV BEV) comes from the website of global automotive marketing research firm LMC Automotive:

Talga Groupmanufactures battery anodes “mined and refined” from the company’s mine and processing plants in Sweden. The company has multiple graphite projects, with the Vittangi project as Talga’s flagship. All the companies mining assets are located close to existing and planned battery “mega factories” and well-positioned with existing electricity and road, rail, and port transport.

Talga’s operational Electric Vehicle Anode (EVA) is producing its flagship Li-ion battery anode product Talnode®-C from the Vittangi trial mine. More than 20 battery manufacturers and automotive customers are to receive product samples for customer qualification.

The Battery Mineral Emerging from Under the Radar - The Bull