From today's Weekend Australian feature on electric vehicles:The...

From today's Weekend Australian feature on electric vehicles:

The transition from internal combustion engines (ICE) to electric vehicles (EVs) is coming faster than the average motorist – and politician – would have expected.

For Australian investors seeking to surf the interest in EVs, there are a variety of options depending on what part of the value chain they want to play in.

EVs, of course, are intrinsically linked to battery technology and the related metals (such as copper) to conduct the electricity. As is now widely appreciated, lithium-ion batteries need sizeable amounts of lithium, graphite and cobalt. EVs also need even larger amounts of copper and nickel.

Plenty of ASX-listed miners are milking the theme, notably lithium producers such as Orocobre (ORE), Pilbara Minerals (PLS), Galaxy Resources (GXY) and graphite producers such as Syrah Resources (SYR) and its massive Balama project in Mozambique.

But for many “battery metals” proponents, mining the raw materials is not enough. Their focus is on the downstream processing to make better material that produces more durable batteries with a reduced environmental impact.

Take Talga Resources (TLG), which is developing its Vittangi graphite mine in Sweden. But the greater Talga story lies in a planned processing plant to produce the anode material, using responsibly extracted natural graphite and 100 per cent renewable power.

For European battery makers, the appeal lies in Talga’s ability to deliver finished material to their doorstep rather than from Chinese suppliers who use oil in the process.

While EVs might tick fund managers’ ESG (environmental, social, governance) boxes, there’s still the issue of what happens to the batteries when they have reached the end of their journey. As with the old lead acid batteries, they need to be disposed of and like the old batteries they also contain hazardous materials.

Nickel sulphate used for batteries

Neometals (NMT) comes into the picture with its proposed European plant that will recover lithium, graphite, cobalt and nickel from the batteries.

In joint venture with SMS Group, Neometals is modifying an existing German battery recycling demonstration plant to process up to ten tonnes per day on behalf of European car makers. In parallel, the JV is evaluating a larger 50 tonnes-per-day plant.

“Fast tracking commercial shredding operations is a positive move to keep pace with a rapidly developing industry searching for immediate sustainable recycling solutions,” the company says.

Just as Tesla is the EV leader, the ASX-listed Novonix (NVX) is the pre-eminent force in advanced battery applications.

Originally an aspiring graphite miner, Novonix has devoted its most advanced efforts to its PUREgraphite subsidiary, the only supplier of synthetic graphite for anode material in the US (most global supply emanates from China).

Novonix says synthetic graphite is more conducive to longer battery life because of its superior purity and consistency compared with the natural product.

Novonix has signed supply deals with electronics giants Samsung and Sanyo, and has patented a method to make cheaper and better-performing cathode materials that result in reduced wastage and lower costs.

It’s not just the planet that’s warming: battery metals technology valuations are red hot given the compelling backdrop of ratcheting demand.

Over the past five years, Neometals shares have bounded 260 per cent and Novonix shares have risen 2350 per cent.

As is always the case with unprofitable tech plays, investors need to decide whether sentiment has outstripped commercial reality or whether it’s merely the early days of a supercharged EV future.

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