Invest in raw materials for coming electric age – resources researcher

I learnt just the other night from a geologist family friend that most of the world's very finite lithium deposits lie in the salt pans of Bolivia – and that he's spent years prospecting for rock-based lithium deposits just north of Upington while employed by a major parastatal. It's pretty obvious with the inexorable electric car revolution that within a decade or so, extracting any local lithium deposits may become hugely financially viable, even though there's a built-in environmental paradox in how it would be extracted. Cyanide is apparently the extraction chemical of choice when it comes to rock deposits. So, on the one hand we mitigate pollution by slowly converting to electric cars and on the other… I guess that's why they're sticking to the more extraction-friendly salt pans right now. Hopefully the environmental equation in South Africa won't leave us between a rock and a hard place. Biznews founder Alec Hogg interviews a South African-born global expert on natural resources, Gavin Montgomery, who provides some fascinating insights about the knock-on effects of the incipient transport industry transformation. – Chris Bateman.The electrification of transport is already fundamentally altering the metals and mining sector where forward-thinking miners have about six years to plan, dig and extract what will become hugely-sought after minerals, initially lithium, but later cobalt and nickel..___STEADY_PAYWALL___.That's the message from South African-born Gavin Montgomery, of Wood Mackenzie, a natural resources research and consulting firm..Interviewed on Biznews Radio, Montgomery, whose company has just published a comprehensive report entitled, "Global battery raw materials, the long-term outlook," says that battery-driven electric vehicles and plug-in hybrids will account for seven percent of passenger car sales by 2025, rising to about 13% just five years later. While the lack of a charging infrastructure would initially cause what he terms, "range anxiety," among motorists, and slow sales, the next decade would see a transformation of the transport industry, and hence the minerals sector..While platinum, currently in demand with conventional vehicle engines, would suffer, the move to hybrid vehicles would mitigate the harm caused by the change to lithium, nickel and cobalt which are extensively used in higher-par batteries powering electrical vehicles, Montgomery says..He singled out Toyota with their MRI vehicle but says it's still very expensive compared to some of the more mass-market electric vehicles which are reaching the market like the Tesla Model 3 or the Chevrolet Bolt..Says Montgomery, "So, we think it will be some time before fuel cell passenger cars are viable for mass market. Also, there's the question of the infrastructure. Many governments, certainly in Europe, are investing in electric vehicle charging infrastructure with fuel cells – and want to have that hydrogen infrastructure as well. However, for the time being, it seems people are people are looking at electrification," he adds..With Elon Musk's Tesla leading the electrification charge in Europe and China, the more established traditional auto suppliers are quickly climbing on board, he says..Asked by Hogg when he saw demand for minerals starting to exceed supply, Montgomery said that beyond 2025 when electric vehicle market penetration was expected to reach seven percent, things would "tighten up" significantly, especially given the long lead-in times required to bring mines producing the new metals into production.."You know it takes seven to nine years to finance a mine, to build it, to ramp it up to capacity – and not a lot of that's happening at the moment.".He advised investors to do a "Warren Buffett" and buy nickel or cobalt stocks which had a dearth of good quality deposits and would therefore fetch very high prices.

Invest in raw materials for coming electric age – resources researcher

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