Want to start battery metals investing? Here’s a quick guide to lithium, cobalt, graphite, vanadium and manganese.
As the world begins to shift away from non-replenishable energy and toward renewable sources, investors are following suit accordingly.
The electric vehicle (EV) revolution is a key part of this change, and many market watchers are interested in the battery metals that are making it possible. While lithium and cobalt are currently getting the most attention, metals like graphite, vanadium and manganese are also rising in popularity.
Read on for a quick go-to guide on battery metals.
Battery metals investing: Lithium
A silver-white metal, lithium is the lightest metal and the least-dense solid element. It has skyrocketed in popularity in recent years due to its role in lithium-ion batteries, which are used in major electronic devices like cell phones, laptops and of course EVs.
Despite being difficult to follow in terms of pricing, interest in lithium has been steadily picking up. Experts in the space have highlighted the automotive sector as a major driving force for demand as the EV movement continues to propel forward.
Dominant names in the lithium space include Sociedad Química y Minera (NYSE:SQM), Albemarle (NYSE:ALB) and FMC (NYSE:FMC). China is also a rising force in lithium production, and outside the major producers smaller exploration companies have been coming forward to attempt to meet demand.
Battery metals investing: Cobalt
Cobalt has also risen in popularity lately due to its role in lithium-ion batteries. Aside from that use, this hard-silver gray metal is used in alloys for jet engines and turbines along with magnetic steels.
While cobalt prices have stumbled since surging in 2017, many experts agree that demand remains strong. M.Plan International Managing Director David Anonychuk recently commented that the metal’s presence in EVs will be enough to keep demand red hot for the foreseeable future.
“There’s still a lot of upside for cobalt. When we look at electric cars, the demand will double in 2027/2028 and probably quadruple in 2035,” he said.
The biggest contributor to cobalt supply is the Democratic Republic of Congo (DRC). It houses an area known as the Copperbelt that holds one-third of global cobalt reserves. 2017 saw the DRC produce 64,000 MT of cobalt, with Russia following in second with 5,600 MT; Australia and Canada took the third and fourth spots, respectively.
Battery metals investing: Graphite
A native element mineral that’s both a form of coal and the most stable form of carbon, graphite is known to be a dry lubricant. As the only non-metal element that’s a good conductor of electricity, it can be used in lithium-ion batteries, as well as in nuclear reactors and the refractory and steel industries.
Much like other battery metals, graphite pricing can be finicky since it’s not traded on an exchange. However, experts predict that demand for the commodity will be steady over the next few years.
Recent news has backed up growing graphite demand, with producers such as Syrah Resources (ASX:SYR) signing offtake agreements and memorandums of understanding for the commodity with buyers like construction groups and carbon material producers, many of which are located in China.
Battery metals investing: Vanadium
A silvery-gray transition metal, vanadium is mined as by-product of other metals and is found in deposits of siltstone, uraniferous sandstone, phosphate rock and titaniferous magnetite. It can also be found in bauxite, coal and crude oil.
The vast majority of vanadium produced is used as a steel additive, as vanadium-steel alloys are very tough. That said, vanadium is increasingly being used in vanadium redox flow batteries, which are contributing to the reusable energy movement.
While the large size of these batteries makes them a better fit for industrial use, they come with the added perk of not degrading for at least 20 years. Click here, here and here to read our three-part series on vanadium and the potential for vanadium redox flow batteries.
In 2017, China took the top spot as the world’s biggest vanadium producer at 43,000 MT, with Russia and South Africa coming in second and third at production rates of 16,000 MT and 13,000 MT, respectively.
Battery metals investing: Manganese
A brittle, hard, gray-white metal, manganese has a similar appearance to iron and can be used in the production of several items, including dry cell batteries, aluminum cans and even fungicides and pesticides. Overall, the International Manganese Institute states that around 90 percent of global manganese output is used for the production of steel and cast iron.
Manganese also contributes to — you guessed it — lithium-ion battery chemistries, such as lithium-manganese oxide batteries. As such, hopes are high that demand for the commodity will rise in line with others that contribute to new energy sources.
South32 (ASX:S32,LSE:S32), a spin out of BHP Billiton (ASX:BHP,LSE:BLT,NYSE:BHP) and a big player in the space, recently saw record quarterly performance from its Australian manganese operations, with total manganese ore production increasing by 8 percent.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.