Lead’s Vital Role in the Growing Electric Vehicle Industry

What’s driving the lead economy: An overview

Market analysts report the automotive lead-acid battery market could grow from US$45.3 billion in 2023 to US$56.18 billion by 2028, with an estimated compounded annual growth rate (CAGR) of 4.4 percent from 2023 to 2028.

While lithium-ion batteries are the primary battery in most current consumer EVs, the cars are also equipped with lead-acid batteries. The lead-acid batteries in EVs serve a similar function to those in internal combustion engine vehicles — powering electrical systems such as lights, windows, navigation, air-conditioning and airbag sensors.

Lead as a commodity in the green revolution is also driving global movements towards the overall electrification of the world. The IEA projected going into 2022 that low-emissions sources of electricity will overtake fossil fuels by 2030 and renewable energy will dominate global capacity, accounting for 75 to 80 percent of all new capacity to 2050. This increase in new capacity will create more demand for energy storage systems (ESS).

With the increased popularity of electric alternatives to power, transportation and energy, companies and international powerhouses are seeing the substantial economic necessity of investing in mining and base metals commodity players. Companies need to act fast in finding sources of metals like lead to fuel the demand of a rapidly growing sustainability-focused world.

Lead’s market outlook over the next decade

Since demand is high, lead is experiencing similar challenges to other base metals, including diminishing supply. Most large mines are coming to the end of their life, and smaller mines are also producing less pure lead.

However, world leaders like China and Australia are held up as the primary sources for viable lead resources in the world. For example, major Australian player Galena Mining (ASX:G1A) operates its own Abra base metals mine, located in the Gascoyne region of Western Australia, which is home to one of the largest lead and silver deposits in the world.

The Abra mine is a 60:40 joint venture between Galena Mining and Toho Zinc, a leading producer of lead in Japan (TSE:5707). The latest mineral resource estimate for Abra is 33.4 million tonnes containing 7.1 percent lead and 17 grams per tonne silver.

Players like Galena see the economic upside of the lead industry, which is currently experiencing a higher rate of technical development in lead batteries than ever before. Wood Mackenzie's Farid Ahmed projected, "These developments have the potential to narrow the performance gap with lithium-ion — its principal rival for the burgeoning ESS sector."

Unlike other commodities, lead can be recycled infinitely while maintaining its quality. The growing demand for lead in lead-acid batteries for EVs and for use in ESS, as well as its ability to be reused, make it a potentially important part of the green future.

Looking into the future of lead mining

The lead market is currently estimated at 10.32 million tonnes and is expected to reach 12.21 million tonnes between 2023 and 2028 with a CAGR of over 3 percent, according to Mordor Intelligence.

At the same time, these production projections could still see issues with increased demand and undersupply. With limited economic lead mines and recent mine closures — such as the 2019 closure of Glencore's (LSE:GLEN,OTC Pink:GLNCY) 120,000 tonne per year smelter in New Brunswick, Canada — major players need to pivot to advance their hold in the lead market.

Notably, Galena has also made significant strides in its lead player positioning as its major partnerships include IXM, a Swiss base metals trading company; Toho Zinc, Japan's largest zinc and lead smelter; and GR Engineering Services (ASX:GNG). Even with mine closures and major disruptions, companies like Galena are putting in the work to meet the push for a greener world and the demand for vehicle battery, ESS and recyclable applications.

The takeaway

Lead may be making a comeback. As an important component in lead-acid batteries for EVs, ESS applications and the overall green revolution, companies and investors alike are looking to this commodity. This could mean that, despite disruptions from supply issues and mine closures, prospects may be high for lead in the upcoming years.

This INNSpired article is sponsored by Galena Mining (ASX:G1A). This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by Galena Miningin order to help investors learn more about the company. Galena Mining is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.

This INNSpired article was written according to INN editorial standards to educate investors.

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with [add link to company profile][ and seek advice from a qualified investment advisor.