• Connect with us
    • Information
      • About Us
      • Contact Us
      • Careers
      • Partnerships
      • Advertise With Us
      • Authors
      • Browse Topics
      • Events
      • Disclaimer
      • Privacy Policy
    • Australia
      North America
      World
    Login
    Investing News NetworkYour trusted source for investing success
    • North America
      Australia
      World
    • My INN
    Videos
    Companies
    Press Releases
    Private Placements
    SUBSCRIBE
    • Reports & Guides
      • Market Outlook Reports
      • Investing Guides
    • Button
    Resource
    • Precious Metals
    • Battery Metals
    • Base Metals
    • Energy
    • Critical Metals
    Tech
    Life Science
    Battery Metals Market
    Battery Metals News
    Battery Metals Stocks
    • Battery Metals Market
    • Battery Metals News
    • Battery Metals Stocks
    cobalt investing

    Critical Metals: A Bright Spot in the Downturn?

    Teresa Matich
    Aug. 26, 2015 03:00PM PST
    Battery Metals
    NYSE:FCX

    Benchmark Mineral Intelligence believes that critical metals could be a bright spot for investors in light of the broader downturn in the commodities space.

    It’s rough out there for resource investors. In the wake of Black Monday, metals prices continue to fall and many mining stocks have taken a bit of a beating.
    However, when it comes to critical metals, the situation is a bit different. Indeed, Andrew Miller of Benchmark Mineral Intelligence said his firm believes that critical metals could be a bright spot for investors in light of the broader downturn in the commodities space.
    Miller stated that there’s plenty of potential for growth in the lithium-ion battery space. By extension, minerals that are part of the battery supply chain — including lithium as well as graphite and cobalt — are poised for growth also. “Lithium prices are already showing the effects of this growth, and other materials like graphite and cobalt will most likely follow this trend in 2016,” he said.
    While Miller thinks it may be difficult for investors to gain exposure to critical metals in the short term, he stated that Benchmark is “firstly looking at the junior mining space” for opportunity in terms of future battery supply chains.
    Here’s more of what he had to say.
    INN: How will the broader fall in commodities prices affect the critical metals space? Could it be a bright spot for investors, or is negative sentiment trumping growth and rising prices in sectors like lithium right now?
    AM: We think the critical minerals space will certainly become a bright spot for investors in light of the downturn in the commodities space and the wider economic readjustment. We’ve already seen evidence of increased investor interest in the past few months.
    With major commodities prices slumping, the critical minerals space is providing some optimism for investors as one of the few remaining growth markets.
    With the outlook for industrial markets weakening, investors will be looking for new growth areas. We at Benchmark believe the battery space is one of these sectors, and subsequently the critical minerals — such as lithium, graphite and cobalt — that fuel this production will be pivotal.
    Ironically, while the macroeconomic adjustment may slow the evolution of these upstream sectors — particularly in terms of China’s role and the progress of new projects — in the longer term, it will likely serve to heighten the criticality of many of these minerals.


    INN: What are your thoughts on what caused this week’s Black Monday fall? Which factors should investors be paying attention to in terms of what’s driving the downturn and how long it could last?
    AM: The latest in the chain of events that has caused this fall has clearly been the devaluation of the yuan, but many participants have seen this day coming for some time.
    On a macro level China is having to restructure. It can no longer sustain the double-digit growth rates of the 2000s, and industry developments will slow as a result. The country opened up its markets and now it’s having to accept that it’s susceptible to global economic pressures like everyone else.
    In terms of critical minerals, I think it’s important for investors to take a step back from wider macro issues and learn about the market fundamentals of these small and often fragmented markets.
    We at Benchmark always emphasize that these critical minerals are not bulk commodities markets and cannot be treated as such.
    INN: Where should investors be looking right now, in light of the fall? Do you see any silver lining?
    AM: In terms of critical minerals we think there are some exciting end markets developing that will cause huge disruptions to existing supply chains and provide significant opportunities for investors.
    Take markets like 3D printing, aerospace and other advanced materials, and you will see that there is still scope for significant growth.
    Most of all, we believe the evolution of the lithium-ion battery into vehicles and utility will be a real game changer. We’ve already seen the first phase of mass commercial growth in this sector with the rise in portable technologies. If, and more importantly when, this electrification spreads to transportation and utility storage is the game changer — particularly for resources.
    You need look no further than the growth protections for these markets, which even by conservative estimates are substantial. Plot that growth against existing raw materials supply dynamics and you can see that change is coming.
    Lithium prices are already showing the effects of this growth, and other materials like graphite and cobalt will most likely follow this trend in 2016.
    The transformation of these markets has the potential to not only be a silver lining but a game changer as traditional industrial markets find a new equilibrium.

    INN: How investors can gain exposure to critical metals? When it comes to lithium, I know that the mineral only makes up a portion of revenues for the biggest three producers, so it can be hard to gain exposure there. Similarly, Freeport-McMoRan (NYSE:FCX), mainly a copper producer, is a significant producer of cobalt. What about lithium, graphite and cobalt juniors, and/or ETFs?
    AM: As relatively immature markets, where supply is dominated by a few (often privately held) companies, I agree it can be difficult to gain exposure to these critical mineral sectors in the short term.
    However, with the dynamics of these markets expected to change quickly over the coming years, we at Benchmark believe there is opportunity for investment into future supply chains.
    By future supply chains we’re firstly looking at the junior mining space. New supply will be required as growth in emerging markets escalates, and these junior companies are striving to serve these markets.
    While the exploration boom of 2009 to 2011 saw a surge in the number of junior projects in these markets, the past four years have served to consolidate this group, in many cases leaving a few relatively developed companies. There are a lot of good-value, long-term investments still on the market as these industries will need new supply.
    For investors looking for more information on critical metals and battery supply chains, Benchmark Mineral Intelligence will be holding a number of Battery Raw Materials Supply Chain Seminars as part of its Benchmark World Tour this fall.
     
    Securities Disclosure: I, Teresa Matich, hold no investment interest in any companies mentioned.
    Editorial Disclosure: Interviews conducted by the Investing News Network are edited for clarity. The Investing News Network does not guarantee the accuracy or thoroughness of the information reported. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
    Related reading: 
    Benchmark’s Andrew Miller Talks Graphite Prices and China
    cobalt investingchinanyse:fcx3d printingandrew miller
    The Conversation (0)

    Go Deeper

    AI Powered
    electric vehicle charging

    Lithium Outlook 2022: Demand to Outpace Supply, Price Upside to Remain

    Critical Minerals Outlook: World Edition

    Critical Minerals Outlook: World Edition

    Latest News

    E-Power Resources Inc. Announces Board Changes and Additional Staking

    Drilling Commences - Webbs Silver Project

    Hemi-style Intrusives Confirmed at Wagyu Project

    Electric Metals Announces Positive PEA for the 100% US Domestic North Star Manganese Project Providing 100% U.S. Domestic Supply of HPMSM, Post-Tax NPV10% of US$1.39 Billion, IRR of 43.5%, and 23-Month Payback

    FPX Nickel Completes Successful Drilling Programs at Baptiste Nickel Project in Central British Columbia

    More News

    Outlook Reports

    Resource
    • Precious Metals
      • Gold
      • Silver
    • Battery Metals
      • Lithium
      • Cobalt
      • Graphite
    • Energy
      • Uranium
      • Oil and Gas
    • Base Metals
      • Copper
      • Nickel
      • Zinc
    • Critical Metals
      • Rare Earths
    • Industrial Metals
    • Agriculture
    Tech
      • Artificial Intelligence
      • Cybersecurity
      • Gaming
      • Cleantech
      • Emerging Tech
    Life Science
      • Biotech
      • Cannabis
      • Psychedelics
      • Pharmaceuticals

    Featured Battery Metals Stocks

    Electric Royalties

    ELEC:CA

    Fortune Minerals

    FT:CA

    Glencore

    GLCNF

    Stillwater Critical Minerals

    PGE:CA
    More featured stocks

    Browse Companies

    Resource
    • Precious Metals
    • Battery Metals
    • Energy
    • Base Metals
    • Critical Metals
    Tech
    Life Science
    MARKETS
    COMMODITIES
    CURRENCIES
    ×