To meet Paris goals, their share of total demand rises
to over 40% for copper and rare earth elements
60-70% for nickel and cobalt
almost 90% for lithium
Our analysis suggests that it has taken 16.5 years on average to move mining projects from discovery to first production. These long lead times raise questions about the ability of supply to ramp up output if demand were to pick up rapidly.
Our analysis suggests that it has taken 16.5 years on average to move mining projects from discovery to first production. These long lead times raise questions about the ability of supply to ramp up output if demand were to pick up rapidly. — 16.5 years? Enter the first stimulus act.
These long lead times raise questions about the ability of supply to ramp up output if demand were to pick up rapidly.> — Rapidly increasing demand + limited supply → rising prices. What is the best way to invest?
There’s always the ETF approach. Check out REMX, the VanEck Rare Earth/Strategic Metals ETF. Up 55% in the last years.
A typical electric car requires six times the mineral inputs of a conventional car and an onshore wind plant requires nine times more mineral resources than a gas-fired plant…
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Silly comparisons:
An EV does not weigh six times as much as ICE vehicle!
Wind plant does not use 9 times more minerals than a combined cycle gas fired power plant.
And elimination of coal fired power plants, refineries and ICE vehicles saves huge quantities of carbon steel, stainless steel, copper, aluminum, titanium, silver, gold, chromium, nickel, platinum, magnesium and many other minerals. Those catalytic converters with their rare earths are only needed by ICE vehicles.
The catalyst component of a catalytic converter is usually platinum (Pt), along with palladium (Pd), and rhodium (Rh). All three of these platinum group metals are extremely rare and very expensive.
This summer the DOE put out a report, Critical Materials Assessment. It is long but it has a criticality matrix for short-term (through 2025) and medium-term (2025-35) needs.
I started out (a few years ago) with the thesis that electrification will generally require more copper all around. Sure there are other minerals/metals that may have a higher growth rate, but it appears that copper may end up being the most reliable grower of them all. Why? Because copper is used not only for EVs, but also for wind power, and for heat pumps, and for all the other things that electrification will be bringing us. At first I started looking into individual stocks, I bought some RIO, I bought some FCX, and was looking into others. But then I changed tack, and instead bought COPX, a copper ETF. I figure if copper demand will slowly rise over the next 5 to 25 years, then most of the copper companies will do okay, and some will do spectacularly. I sold FCX, but I still own RIO, but I am only accumulating COPX periodically when the price dips.
