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Metals X spin-out backed by experienced team and development ready project

Special Report: Metal X’s nickel-cobalt spin out Nico Resources is gearing up to list next month – with some familiar … Read More
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This article was originally published by Stockhead

Metal X’s nickel-cobalt spin out Nico Resources is gearing up to list next month – with some familiar faces at the helm.

Executive director and CEO Rod Corps and chairman Warren Hallam are both Metals X (ASX:MLX) alumni, with Corps previously involved in the spin-out of the company’s gold assets and Hallam an executive director and managing director in Metals X for around 15 years.

The spin-out covers the Central Musgrave Project (CMP) tenements which comprise three main exploration licences – Wingellina (WA), Claude Hill (SA) and Mt Davies (SA).

Wingellina has combined mineral resources of 182.6 Mt at 0.92% nickel and 0.07% cobalt for 1.68 Mt of contained nickel and 132Kt of contained cobalt, and probable ore reserves of 168.4Mt at 0.93% nickel and 0.07% cobalt for 1,561Kt of contained nickel and 123Kt of contained cobalt.

Claude Hills has inferred mineral resources of 33.3 Mt at 0.81% nickel and 0.07% cobalt for 270Kt of contained nickel and 23Kt of contained cobalt.

 

Spin-out the natural step off the back of strong nickel prices

“With where Metals X is placed in the growth phase, it makes sense to demerge and put these assets into a single purpose listed vehicle – especially in the current nickel price environment,” Corps said.

“And that price is looking like it will continue to improve over the next 5-10 years with the rise of electric vehicles.

“It’s pretty exciting times in the nickel space at the moment with cobalt increasing as well.

“So, the plan now is to complete the raising, and then get Wingellina into development.”

Corps said the company’s IPO is open, with listing expected in early January.

 

Wingellina fully approved and ready to go

Hallam was originally the managing director of pre-Metals X entity  Metals Exploration back when the Wingellina nickel-cobalt project was acquired in 2007 and he’s been heavily involved in getting the project development ready.

A Phase 1 Feasibility Study (+25%) with HPAL processing was completed in 2008 which indicated a 39-year project life producing around 40,000tpa of nickel and 3,000tpa of cobalt.

Since then Metals X has continued to undertake additional metallurgical optimisation, processing and infrastructure studies.

“We’re one of a handful of projects that are ready in the nickel area to be developed, because as you know, it takes many years to get a project off the ground, especially to get the approvals – but most of those approvals are in place and we’re ready to move forward,” Hallam said.

 

Next – update the pre-feasibility study

Corps said Wingellina has had around $60-odd million dollars spent on its development to date.

“It’s been proven up, it’s an extremely large nickel laterite limonite deposit 1.63 million tonnes in reserve, 2 million tonnes in resource,” he said.

“Since 2007, Metals X has done a pre-feasibility study, it’s gained all land access and EPA approvals as well

“A lot of work has been done developing the project to get it to the stage now where it’s in a development-ready position with all approvals in place.”

Hallam said the next step is to focus on any technology changes that may or may not have occurred over the last five years, and to update the pre-feasibility study.

Pic: Central Musgrave project tenements location

 

Long-term nickel demand bodes well

“Because it’s such a large project, it does require quite a large upfront capital and that’s partly why it did go out into a final feasibility study in 2012, but the nickel price collapsed at the time,” Hallam said.

“Now the nickel price has recovered, so it’s time now to move forward and see what those opportunities are.

“Once you’ve developed this project, the payback is four to five years, and then you have a very, very long-term project.”

Hallam said the reserves of 1.63 million tonnes equates to 40,000 tonnes of nickel production per annum which equates to over 39 years of production – which at current nickel prices would equate to a revenue of over a billion dollars.

Corps adds that with the interest being shown by a lot of majors worldwide for long-term nickel supply there should be some “very interested parties” with the financial capabilities to back the project.

 

Priority retail allocation offer – There are 300 x $2,000 minimum allocations in the Nico Resources IPO available to subscribers of Marketech Focus. Go to www.nicoresources.com.au to download the prospectus, and for full details on how to apply under the priority offer through Marketech at www.marketech.com.au.

 

This article was developed in collaboration with Nico Resources Limited, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Metals X spin-out backed by experienced team and development ready project appeared first on Stockhead.



Author: Special Report

Precious Metals

Sound Money Is A Prerequisite To Peace, Prosperity, And Freedom

Sound Money Is A Prerequisite To Peace, Prosperity, And Freedom

Authored by Patrick Barron via The Mises Institute,

There are many good recommendations…

Sound Money Is A Prerequisite To Peace, Prosperity, And Freedom

Authored by Patrick Barron via The Mises Institute,

There are many good recommendations promoted by Austrian school economists for improving the economy. Although we enjoy successes periodically, most–such as deregulating trucking and airline pricing–involve eliminating previous government interventions. These successes are to be celebrated, of course. But no one can deny that government intervention into the economy has continued, despite these occasional success stories.

The reason Big Government has continued to grow is that it controls money production. Not only does government grow in terms of spending, regulations, and interventions everywhere (both internally and overseas), but it threatens our very freedoms. In other words, government’s control of money is diametrically opposed to peace, prosperity, and freedom and eventually will destroy our republican democracy. For this reason, returning to sound money–i.e., money that is created by the private market, is part and parcel of the market, and is controlled by no one–should be goal number one for every lover of peace, prosperity, and freedom. Nothing less than the survival of our western-style way of life is at stake.

Here are a few examples of how unsound money progresses and masks its destructive power.

  • One, unsound money allows government to confiscate resources at will. For example, in 2020 America’s bloated military spent as much as the next eleven nations of the world combined. Of course, military spending went up in 2021 and will continue to increase in 2022. America’s annual budget deficit is projected to be somewhere between $1.84 trillion and $3.4 trillion, depending upon whether you ask the Biden administration or the Congressional Budget Office. All of this money is created out of thin air. Americans’ taxes will not increase enough to cover even a fraction of the Biden estimate, and there is no appetite in the bond market for more American debt. Therefore, the Fed will monetize the new debt onto its balance sheet. The resulting increase in base money will cause the prices of most goods and services to rise. This impoverishment of the American people through the hidden tax of inflation is possible only because money is completely fiat; i.e., produced out of nothing except the government’s printing press and computer terminals.

  • Two, unsound money masks the destructive power of government market interventions. An example is former President Trump’s tariffs on Chinese goods. According to a friend of mine, the data is irrefutable that the tariffs worked. Well, as Mark Twain said, there’s lies, damned lies, and statistics. What really is irrefutable is the economic law of opportunity cost; i.e., that choosing one thing means the giving up of another. Another is individual preference. The very fact that people must not be allowed to purchase Chinese goods means that they valued those goods to a higher extent than American goods. The reason does not have to be financial. There’s always service, availability, quality, etc. So preventing Americans from buying Chinese goods means less satisfaction for Americans. This is just one example. Another is keeping zombie companies in business through artificially lower interest rates means that capital is misallocated to less productive uses. There’s a whole panoply of labor laws that artificially raises the cost of American labor, reduces American productivity, and lowers business income. Some workers are priced out of the market through minimum wage and mandatory benefit packages. Business has less capital to invest for expansion. New business starts are discouraged. There’s something there for everyone! The destruction is masked by monetarily inflated GDP numbers, artificially suppressed Consumer Price Index (CPI) statistics, increased unemployment payments, and other government programs and manipulated data.

  • Three, and most importantly, Americans’ freedom is threatened. Government can print enough money to buy unlimited enforcers of its rules. More IRS agents. More agents for enforcing arbitrary rules of the Occupational, Safety, and Health Administration (OSHA). More agents for enforcing new environmental regulations and laws arbitrarily established by the Environmental Protection Agency (EPA). More Drug Enforcement Agency (DEA) agents. Perhaps even agents to confiscate guns.

Conclusion

Returning to limited government, creating a more free market order, having a less intrusive government, etc. requires sound money. Sound money is not a guarantee of a free society, but a free society is impossible without sound money.

I conclude with these quotes from The Quotable Mises. The last quote is especially pertinent to the point of this brief essay. (Emphases are mine.)

  • The gold standard alone makes the determination of money’s purchasing power independent of the ambitions and machinations of governments, of dictators, of political parties, and of pressure groups. The gold standard alone is what the nineteenth-century freedom-loving leaders (who championed representative government, civil liberties, and prosperity for all) called “sound money.”

  • All those intent upon sabotaging the evolution toward welfare, peace, freedom, and democracy loathed the gold standard, and not only on account of its economic significance. In their eyes the gold standard was the labarum, the symbol, of all those doctrines and policies they wanted to destroy.

  • The classical or orthodox gold standard alone is a truly effective check on the power of the government to inflate the currency. Without such a check all other constitutional safeguards can be rendered vain.

I do not want to close on a pessimistic note. Therefore, I offer this final quote from Ludwig von Mises, ever the optimist and ever the gentleman: “Every nation, whether rich or poor, powerful or feeble, can at any hour once again adopt the gold standard.”

Tyler Durden
Sat, 12/04/2021 – 19:30






Author: Tyler Durden

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Precious Metals

First Majestic Silver Sees BMO Resume Coverage With $13.25 Price Target

On November 30th, First Majestic Silver Corp. (TSX: FR) priced their convertible senior notes due in 2027. The company announced
The post First Majestic…

On November 30th, First Majestic Silver Corp. (TSX: FR) priced their convertible senior notes due in 2027. The company announced that it will be issuing US$200 million in notes. The notes will bear a cash interest semi-annually at 0.375% per annum and the conversion will be 60.3865 common shares per US$100 principal. The company said it intends to use C$164.9 million to repurchase $125.2 million aggregate principal of its 1.875% convertible senior note.

First Majestic Silver currently has 5 analysts covering the stock with an average 12-month price target of C$20.34, or a 46% upside to the current stock price. Out of the 5 analysts, 2 analysts have to buy ratings and 3 have hold ratings. The street high sits at C$31.27 from H.C Wainwright while the lowest price target sits at C$13.25.

After the news, BMO Capital Markets resumed their coverage of First Majestic Silver with a C$13.25 price target, lowering it from the C$13.75 they had on the company beforehand. They also reiterated their market performance rating on the stock.

BMO says that they had a period of research restriction due to the senior note offering but since the deal has been priced they are now able to resume. They add that after using $164.9 million of the proceeds to repurchase the existing 1.875% notes, those notes will have roughly $31.1 million remaining and expect the remaining to be converted into 3.3 million shares.

Below you can see the updated BMO’s updated.


Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post First Majestic Silver Sees BMO Resume Coverage With $13.25 Price Target appeared first on the deep dive.


Author: Justin Young

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Already-scarce battery & energy metals facing more pressure from fossil-fuel phase-out

2021.12.04
For all their successes building Europe’s strongest economy, the Germans have made some pretty dumb moves regarding energy policy.
In 2002,…

Already-scarce battery & energy metals facing more pressure from fossil-fuel phase-out

2021.12.04

For all their successes building Europe’s strongest economy, the Germans have made some pretty dumb moves regarding energy policy.

In 2002, Germany enacted a law to phase out nuclear power, but the government led by Chancellor Angela Merkel decided in 2010 to extend the lifetimes of the country’s reactors by an average of 12 years. This was based on the judgment that Germany would not be able to meet its power demand using renewable energy sources – wind and solar power – nor could it meet the government’s ambitious goal of a 40% reduction in carbon emissions by 2020 burning more coal and natural gas.

Then, playing populist politics and over-reacting to the partial meltdowns in Japan’s Fukushima Daiichi nuclear complex, Merkel’s government immediately shut down almost half of the country’s nuclear power. Germany, overnight, decided 40% of its nuclear power capacity would be eliminated, and removed 8,800 megawatts (MW) from the grid; the remaining 12,700 MW of nuclear-supplied electricity will be gone by 2022.

The country rapidly approaching that deadline, Germany has moved to shut down six nuclear plants or 8.5 gigawatts (1GW = 1,000MW) by the end of next year. Three of its newest and best plants are due to close in just over a month, removing 4.05GW, equivalent to the average electricity consumption of Denmark, from northern Europe’s power grid.

Germany also plans to take all its natural gas plants offline by 2038.

According to Clean Energy Wire, the country in the first six months of this year got 41.4% of its power from renewables; 17.8% from lignite, a form of coal; 16.7% from natural gas, 11.7% from nuclear and 8.4% from hard coal. 

The real surprise here is not that Germany is following through on its 20-year-old nuclear phase-out, but the fact that the energy sources designed to take its place are so inadequate.

“Energiewiende” (energy transition) refers to Germany’s policy of increasing its share of renewables, and phasing out nuclear power, which before Fukushima amounted to about 25% of the country’s total electricity load.

However Germany’s production of solar and wind power has failed expectations, with the gap between supply and demand having to be met by nuclear and coal, and consumers faced with horrendous power bills.

A recent analysis by Verivox found that Germany’s US$0.45 per kilowatt hour is the third-highest-priced electricity in the European Union (behind the Czech Republic and Romania) and more expensive that all the other G20 countries.

In 2021, due to unfavorable weather conditions, the country’s production of wind and solar power for the first three quarters plummeted compared to the same period in 2020, with onshore wind producing 18% less, 14% less from offshore plants, and solar energy producing only half as much.

Despite energiewiende, Germany’s energy sources this year were dirtier than previously, with hard coal consumption 20% higher from January to September and electricity and heat generation from hard coal increasing by 28%. (Germany has two types of coal, hard coal and lignite). Coal-fired power production is considered to be the worst form of electricity generation for the environment, despite power plant companies’ use of scrubbers and claims of “clean coal”.

The irony is, notwithstanding the country’s disdain for fossil fuels and nuclear energy, if it wasn’t for these traditional base-load sources, deployed to make up for the failure of solar and wind to deliver as expected, Germany would have been facing black-outs.

In fact parts of the country could still be plunged into darkness if Germany’s ill-conceived plan to retire three nuclear power plants in the middle of winter without a reliable source of replacement power comes to pass.

Infographic by Peter Bardland

Germany of course isn’t the only country whose near-religious zeal to convert to clean energy has run up against astronomical power prices. Closer to home, we have the example of Ontario.

The provincial Liberals decided to build gas plants in Mississauga and Oakville as part of a commitment to end coal-produced power in Ontario. However after local opposition, they canceled the plants at a cost of CAD$1 billion. In 2015 under the watch of then-Premier Kathleen Wynne, an auditor general’s report found that Ontarians had paid $37 billion more for power than they should have between 2006 and 2014, because the province had allowed exorbitant prices for wind, solar and other alternative energy sources.

Battery & energy metals

The shift to renewable energy and the electrification of the global transportation system doesn’t happen without a major push to mine more metals. Copper for electric vehicle motors, charging stations and electrical transmission lines; lithium for Li-ion batteries; and graphite for the anode part of the battery are in high demand now, and the need for them is only going to increase, as governments push for stricter limits on greenhouse gas emissions in an effort to limit global temperature rise.

According to Bloomberg New Energy Finance (NEF), by 2030 consumption of lithium and nickel will be at least five times current levels, demand for cobalt used in EV batteries will be 70% higher, and copper, manganese, iron, phosphorous and graphite — all needed in clean energy technologies and to expand electricity grids — will see sharp spikes in demand.

This is nothing new from our perspective. AOTH has been covering the markets for these in-demand “future-facing metals” for years. High demand is occurring at the same time as a supply crunch is taking hold, particularly for copper, lithium and nickel, which is shoring up prices and driving the valuations of deposits containing these metals higher.

For example, the EV battery market alone is projected to consume well over 1.6 million tonnes of flake graphite per year, resulting in a 10-fold increase in demand by 2030. This is worrisome considering that total graphite mined in 2020 for all uses, including lump graphite for pencils and graphite used in nuclear reactors, was only 1.1 million tonnes.

It is estimated that the natural flake graphite market could reach a deficit as soon as 2023, with few new sources being developed around the world.

The prices of lithium carbonate and lithium hydroxide, both used in the Li-ion battery cathode, have soared this year on break-neck demand and tight supply. Benchmark Mineral Intelligence forecasts lithium demand to more than triple between 2020 and 2025, rising to an annual million tonnes and out-pacing supply by 200,000 tonnes.

Added to these structural supply deficits, supply chain bottlenecks relating to the covid-19 pandemic have further pressured prices, resulting in a disturbing trend for end-users known as “greenflation”. Indeed the costs associated with “going green” are starting to become a serious concern.

While low costs in relation to fossil fuel sources have been a driving force of the clean energy boom, this is beginning to change. Higher prices of the commodities needed for renewable energy are increasing the costs of setting up green power projects.

According to a recent article in Oilprice.com,

A 2019 report from the nonprofit Rocky Mountain Institute found that it was cheaper to build and use a combination of renewables like wind and solar than to build new natural gas plants. Another 2020 report from Carbon Tracker found that in every single one of the world’s energy markets, it’s cheaper to invest in renewables than in coal.

But this remarkable trend has now gone into reverse gear, with prices of metals such as tin, aluminum, copper, nickel, and cobalt, which are essential to energy transition technologies, climbing between 20% and 90% this year, thanks to massive global supply chain disruptions.

The piece by Alex Kimani goes a step further in predicting that “metals have been tipped to become the oil of the future,” with clean-energy technologies requiring more metals than their fossil fuel-based counterparts.

According to a recent Eurasia Review analysis, prices for copper, nickel, cobalt, and lithium could reach historical peaks for an unprecedented, sustained period in a net-zero emissions scenario, with the total value of production rising more than four-fold for the period 2021-2040, and even rivaling the total value of crude oil production.

Rising greenflation could prove to be a big problem for countries hoping to lighten their carbon footprints. That’s because a colossal shift to renewables is seen as the only way of achieving climate neutrality by 2050, meaning rising costs could be “baked into” plans for electrification and decarbonization going forward.

According to BloombergNEF’s New Energy Outlook, getting to “net zero” carbon emissions by 2050 will require rapid scaling of investment in the energy transition over the next 10 years.

It says over 75% of the effort to cut emissions falls to the power sector; and that if the world is even get close to achieving its net-zero goal, we must accelerate deployment of low-carbon solutions, meaning even more wind, solar, batteries and electric vehicles than are being planned currently.

The report says the following milestones will need to be hit 2030 to be on track for net-zero by 2050:

  • Add 505 gigawatts of new wind power each year to 2030 (5.2 times the 2020 total)
  • Add 455 gigawatts of solar PV each year to 2030 (3.2 times the 2020 total)
  • Add 245 gigawatt-hours of batteries each year to 2030 (26 times the 2020 total)
  • Add 35 million EVs added to the road each year to 2030 (11 times the 2020 total)
  • Reduce coal-fired power generation 72% from 2019 levels by 2030, and retire up to around 70%, or 1,417 gigawatts, of coal-fired power capacity by 2030

NEF’s ‘Green Scenario’ requires an even more dramatic scale-up to renewables, with:

  • Wind: 25 terawatts in 2050, or average of 816 gigawatts installed per year to 2050
  • Solar: 20 terawatts in 2050, or average of 632 gigawatts installed per year to 2050
  • Batteries: 7.7 terawatt-hours in 2050, or average of 257 gigawatt-hours installed per year

One of the most important takeaways from New Energy Outlook 2021 is this statement:

Achieving net-zero carbon emissions by 2050 will require as much as $173 trillion in investments in the energy transition.

Part of that huge investment should be a significant, to put it mildly, earmarking of public and private money that would go into a major ramp-up of mining the materials required for making the global shift from fossil fuels to renewables.

The mining industry is going to need help in finding and developing new sources of copper, lithium and graphite, what I have deemed The Big Three Commodities of Electrification and Decarbonization.

Unfortunately, however, the task is being made that much harder by more supply-related curve balls being thrown.

Graphite

Let’s start with graphite.

Tesla’s Elon Musk has been complaining about the high cost of graphite needed to make electric-vehicle battery anodes. There is no substitute for this unique mineral, which along with diamonds, is the only source of natural carbon. Graphite is an excellent conductor of heat and electricity, making it an ideal anode material.

Tesla and SK Innovation, the Korean battery-maker building two new plants in the US, are among the hundreds of auto-industry players reportedly asking for tariff waivers on parts and materials imported from China.

The tariffs were imposed during the US-China trade war, most of which are still in place. Among them is a 25% levy on synthetic graphite.

As we have previously written, China really has the US over a barrel when it comes to graphite. Because China controls the market for coated spherical graphite, the only kind suitable for an EV battery’s anode, the United States is 100% dependent on a foreign supplier. Tesla confirmed as much when it stated in a public comment, via CNBC, that only mainland China could provide the quantity of graphite it needs in flake or powder form to manufacture its batteries in the U.S.

“As a result of Tesla’s due diligence process for suppliers of artificial graphite, globally and in the United States, Tesla has concluded that no company in the United States is currently capable of producing artificial graphite to the required specifications and capacity needed for Tesla’s production,” Tesla wrote.

The situation isn’t going to get better anytime soon.

Doubts have been raised over whether China can keep up with surging global demand. The top graphite producer has already taken steps to retain its graphite resources by restricting its export quota and imposed a 20% export duty.

Metal Bulletin reported in October that Chinese graphite prices are likely heading higher in the last quarter of this year due to rising electricity costs and reduced power supply, as well as insufficient inventories and inadequate availability of feedstock for spherical graphite processing.

Lithium

The majority of the world’s lithium brine production is in the “lithium triangle” spanning, Chile, Argentina and Bolivia. In 2020 Chile was the second-largest producer of the crucial battery ingredient, mining 18,000 tonnes.

Importantly, it is also the world’s largest copper producer.

For many years Chile’s pro-mining government made the country a focus for investment, however its recent lurch to the left is casting doubts on how much of a player the former bastion of free-market policies and privatization will be.

Currently in the midst of an election campaign, front-running leftist presidential candidate Gabriel Boric this week talked up his plans for a state lithium firm, and according to Reuters, slammed the Andean country’s “historic error” of privatizing its resources.

Copper

Chile has also proposed legislation that would see copper mine profits taxed at 75%. State-owned Codelco is the world’s largest red-metal producer in the world, and presumably is the model Boric envisions for creating a national lithium company.

Next door in Peru, the second-largest copper producer, the new leftist government led by Pedro Castillo is seeking to impose a 70% tax on copper mining profits, which would discourage further spending on existing and future projects.

Resource nationalism of a different sort has forced the closure of one of the country’s largest copper mines. Chinese miner MMG will reportedly end production from Las Bambas by mid-December following months-long road blockades that have prevented supplies from reaching the operation.

A dirt road used to transport copper is at the heart of the dispute with local communities, who want compensation for the land used to build the road and alleged damage to their crops. In all 400 production days have been lost since 2016, including a three-week-long roadblock protest at the end of 2020 that prevented MMG from exporting 189,000 tonnes of copper concentrate worth $530 million.  

Meanwhile in the DRC, Africa’s top copper producer, the Chinese embassy is apparently telling its nationals to leave three provinces where mining takes place, following a spate of attacks on Chinese working in the country’s mining industry.

According to Texas-based geopolitical consultancy Stratfor, an attack on Nov. 24 against an artisanal gold mine in Ituri province left four people dead, including two Chinese nationals. The other two provinces of concern are North Kivu and South Kivu, where small-scale artisanal mining is common.

Infamous for its wars, child labor and appalling working conditions, last year about 1,300 civilians were killed in the DRC over eight months, involving armed groups and government forces in the eastern part of the country. More than half a million were forced from their homes.

Militants often attack villages as a ruse for stealing metals and selling them on the black market.

The attack on Chinese marks a new development in conflict-ridden Africa, where Chinese companies have tried to win local support for mining through the building of schools, water systems, roads and other infrastructure. Perhaps that is not enough anymore and the locals are getting more desperate.

Conclusion

All of the above manifestations of resource nationalism — Chinese mining employees being attacked in the DRC, copper producers in Chile and Peru facing higher taxes, a possible nationalization of Chile’s lithium industry, and Chinese quotas/ export duties on graphite — are on top of existing structural supply issues for key electrification & decarbonization graphite, lithium and copper. Anti-mining governments or governments that don’t appear to govern at all, like the DRC, make increasing mine output to meet higher demand all that much harder.

And with decarbonization agendas being rolled out by several countries including the United States, which just passed $2.8 trillion in new infrastructure and climate-related investments, the demand side of the equation is only going to strengthen.

(While some US politicians like Alaska Sen. Lisa Murkowsi “get” the need to support a “mine to battery to EV” supply chain in North America, the best the US government can is to provide consumer incentives. For example Joe Biden’s Build Back Better Act would raise the EV purchase credit to $12,500 from $7,500, making it one of the most aggressive EV incentives in the world)

They need to do more.

Countries like Germany are phasing out nuclear and coal-fired plants but have not yet achieved the renewable power capacity needed to replace shuttered power-generation facilities.

Yet the only plan in town, so to speak, is renewables, if the goal of net-zero carbon emissions by 2050 is to be met.

This means an incredible ramp-up of renewable power is needed, with all the required metals that go along with that.

Without security of supply, though, it’s all but impossible for mining companies to reach that level of production. As the example of Tesla and graphite has shown, the total dependence on Chinese graphite imports for making electric cars in the United States means the only way of lowering costs is to urge the US government to reduce tariffs on what is increasingly becoming a hostile power whose geopolitical interest are counter to America’s and most Western countries. (the US also relies on Russia for many critical metals, such as palladium and nickel)

The trick is sourcing production locally, instead of relying on foreign suppliers and paying exorbitant shipping costs to get the raw materials from battery-making facilities in Asia to North American auto assembly plants.

There are no doubt several companies with the capability of adding to a North American battery supply chain. We could actually start building a locally-sourced, locally-made battery supply chain, from mine to battery to electric car.

Richard (Rick) Mills
aheadoftheherd.com
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Author: Gail Mills

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