We rounded up all our PDAC 2019 battery metals coverage here for a quick overview of what’s ahead for the sector.
The 2019 Prospectors & Developers Association of Canada (PDAC) convention was a hot bed of excitement, especially around the battery metals sector, with industry experts and CEOs weighing in on the future of the market.
The conference was held at the Metro Toronto Convention Center from March 3 to 6, and saw 1,000 exhibitors, 3,500 investors and 25,000 attendees from 135 countries come together to celebrate all things mining and attend a wide variety of presentations, panels and discussions.
If you were unable to attend the four-day mining event, have no fear, because we’ve got you covered. The Investing News Network (INN) took to the PDAC floor to speak with battery metals experts, analysts and company CEOs to find out what investors need to know about the upcoming EV revolution and which battery metals will reign supreme. Scroll down to view all of our coverage.
Simon Moores, managing director of Benchmark Mineral Intelligence, spoke to INN about the growth of lithium-ion megafactories and the unique demand the electric vehicle (EV) proliferation is having on the battery metals sector.
“[Raw materials are going] from niche to mainstream,” he said. “No one has done [this] before; no one has produced lithium, cobalt, graphite anode or nickel chemicals [at the scale that’s going to be needed].”
When it comes to lithium, Chris Berry, founder of House Mountain Partners, believes China will always be a major factor in the battery metals equation.
“I don’t think investor focus will ever shift from China, because it is just such a big portion of the market,” he said. “With respect to pricing, what I think you will see in 2019 and beyond — outside of China on the contract basis, prices are broadly flat, maybe they swing 5 or 7 percent up or down either way, but you are not going to see a huge swing up or a huge swing down.”
Berry also shared his thoughts on junior miners in the sector and how investors should approach the lithium market.
Howard Klein, founder of RK Equity, also weighed in on the current lithium market, noting that 2019 has been a challenging year for some producers.
Despite the current challenges, steady demand in the sector will likely be a price catalyst.
“Demand is higher than supply, and that translates into higher prices, in my opinion, sometime soon,” said Klein.
Quebec-focused Nemaska Lithium (TSX:NMX,OTCQX:NMKEF) also attended PDAC. We sat down with President and CEO Guy Bourassa, who talked about Nemaska’s Whabouchi project, its financial shortfall and what’s ahead for the company.
“People have to understand that, in the last 18 months, we have been working, trying to finance this project with potential partners, potential offtakers, real offtakers, banks and the bonds,” explained Bourassa.
According to the CEO and president, the company believes it is well positioned and funded.
“We [underwent] 10, 12, maybe 15 … due diligence reports by outside international firms — nobody raised any questions about the budget,” he said. “So given the market at the time, given the information we had … we would not have done it differently.”
INN had the chance to talk to Francisco Ismodes, Peru’s mines and energy minister.
Ismodes shared his thoughts on mining in Peru, what challenges are ahead for the South American country and what the future holds for lithium projects there.
Chile’s mines minister, Baldo Prokurica, shared his thoughts on mining in Chile, what challenges are ahead for the country and what the future holds for lithium, cobalt and copper projects there.
Offering insight into cobalt’s impact on the battery metals space was Anthony Milewski, CEO of Cobalt 27 Capital (TSXV:KBLT). Milewski sees the price of cobalt steadily increasing in 2019.
“We are currently in the US$15 mark; I anticipate that for the balance of the year we will see cobalt prices [reach US$25],” said Milewski.
The Cobalt 27 Capital CEO also explained how battery metal demand will affect the nickel, cobalt and manganese markets.
“The new demand for nickel, which will be tremendous, will come from batteries,” he said.
Lithium, nickel and cobalt weren’t the only metals top of mind with industry experts when discussing electric vehicles. Rare earths play an equally important role in the emerging global market for electric vehicles. Byron King, editor of Rickard’s Gold Speculator at Agora Financial, thinks rare earths are “the real secret to EVs.”
“First of all, there are rare earths in the batteries, and second of all, the traction motors, which turn the wheels that actually make the rubber meet the road and give you the traction that rolls you down the highway — those traction motors run on strong rare earth magnets,” explained King. “You’re talking about moving from a few ounces of rare earths in a car to several pounds of rare earths in a car once you go electric.”
Rare earths were also the topic of discussion when INN sat down with Luisa Moreno, managing director of Tahuti Global. Moreno sees demand for the high-strength magnet metals increasing, but warned that supply chain needs to be developed outside of China.
“I think the demand will continue to go up. Everyone talks about electric vehicles, and there is potential for more companies to adopt the permanent magnet motors, those do use neodymium. But you know, there is increasing demand for technologies and for mobile technologies and so forth, so there will be use in applications for the various rare earths,” she said.
As China remains the top producer of rare earths, it currently controls supply and demand.
“For the west to be able to catch up with China in terms of developing a supply chain, it will be important to have more production outside of [that country],” Moreno added.
INN also had a chance to chat with Don Bubar, CEO of Avalon Advanced Materials (TSX:AVL,OTCQB:AVLNF) and this year’s winner of the 2019 PDAC Distinguished Service award, celebrating his commitment and longstanding service to the PDAC and its efforts to foster a welcoming space for indigenous people.
Bubar echoed Moreno’s sentiment of the need for a rare earth supply chain independent of China and believes his company’s Nechalacho rare earth project may be the answer.
“We almost got that project off the ground and took it all the way through feasibility and then, of course, the bubble burst in the 2012 timeframe so we’ve been sort of waiting for another opportunity for that demand to come back, and we knew it would happen sometime because that supply chain on rare earths never did get created in any real meaningful way outside of China,” said Bubar.
The EV story was a talking point on each day at the PDAC convention, and INN took the opportunity to sit down with John Pfahl of SRK Consulting to talk about all things electric and how the EV market is tracking.
At PDAC, INN asked industry insiders where the US stands in the battery metals and EV story — and it isn’t in the lead.
Speaking at this year’s Miller Thomson PDAC Lithium-ion Battery Materials and Supply Chains seminar, Benchmark Mineral Intelligence Managing Director Simon Moores said that, even though the energy storage revolution is coming, it will be delayed.
For all of INN’s PDAC coverage, check out our PDAC 2019 playlist.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Nemaska Lithium is a client of the Investing News Network. This article is not paid-for content.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. 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.