SMM11, June 6: with the life of electric vehicles ready to go, nickel and copper resources are attracting the attention of investment banks and other large investors.
At the same time, there are more and more deals between Chinese battery giants and global miners. Earlier this year, CATL, China's largest lithium battery maker, injected C $15 million into Canadian-listed North American nickel (with a market capitalisation of just $35.5 million) and Greenland nickel sulphide projects. By next year, CATL hopes to produce NCM811 batteries (80 per cent nickel, 10 per cent cobalt and 10 per cent manganese). Batteries with high nickel content are cheaper and live longer because they store and generate more energy. Currently, batteries produced by CATL contain 50 per cent nickel, 20 per cent cobalt and 30 per cent manganese. CATL also supplies batteries to SAIC, Geely, BMW and Volkswagen.
Russian nickel giant (Norilsk Nickel) recently signed an agreement with German chemical giant BASF (BASF) to build a large nickel and cobalt cathode production plant in Finland. The plant alone will provide battery material for BASF's 300000 electric vehicles. "China is undoubtedly at the forefront of the world in financing electric vehicles and battery materials," said Eddie Hugh (Eddie Sugar), a partner at EAS Advisors, a New York-based corporate consultancy.
Demand for nickel sulfate could reach 800000 to 1 million tons by 2030, according to forecasts released by Roskill researchers in September. Nickel sulfate is an important raw material for cathode of lithium ion battery. This is almost half the size of the entire nickel market today. Big battery makers are showing growing interest in small nickel mining companies such as Cassini Resources (Cassini Resources) and St. George Mining (St George Mining), which are listed on the Australian Stock Exchange.
Australian junior carmakers have also benefited from the rapidly expanding electric car market. (Norwest Minerals), which is about to go public, has attracted a lot of interest from institutional investors, especially because of its "Bali" (Bali) copper project in WA. Recently, the project obtained the highest grade of 36.8% of high-quality copper through rock chip sampling.
Ivan Ali Jada (Ivan Arriagada), chairman of Chilean copper mining company Antofagasta, told IMARC representatives that traditional cars need 25 kilograms of copper, while electric cars need about 80 kilograms.
Jenny Kovachevich (Gianni Kovacevic), chairman of Copper Bank, a listed Canadian company, forecasts that demand for copper, a metal, is expected to grow at a rate of 4 to 6 per cent a year. "over the next 40 years, copper use will increase to 50% or 60%, and there will be a trend to continue to increase," he stressed.
But over the past decade, the global market has spent about $100 billion on copper exploration, but only nine have been discovered, according to Copper Bank's Kovacevic.
At present, about 50 per cent of the primary copper is supplied by 25 copper mines around the world, most of which are located in Chile and Peru.
With the lack of new mine discovery, the grade of existing mines is declining-which means that more materials need to be mined to obtain the same amount of copper. Lower grades also mean that the price of copper must be much higher to stimulate new production. LME's copper price is about $6254 a tonne. "I believe the price of copper will exceed its all-time high, not because I am a prophet, but because I understand the project and we have to be able to make 0.4 per cent of copper ore cost-effective," Kovacevic said.
He expects copper prices to have to rise to between $12000 and $14000 a tonne over the next 10 to 20 years.
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