Conquest Resources Limited (TSXV: CQR) ("Conquest" or the "Company") has entered into a Royalty Purchase and Sale Agreement with VDI Resources LLC (VDI), a subsidiary of VerAI Discoveries Inc. (VerAI), an artificial intelligence (AI) powered mineral discovery generator, pursuant to which the Company agrees to grant to VDI a 1.5% net smelter return royalty on certain target areas with recommended drilling locations generated by VerAI utilizing its proprietary AI technology. The Company agrees to grant VDI an additional 1.5% NSR in return for funding a drill program for testing of the targets identified by VerAI on the Belfast TeckMag Project, a 350 sq. km. land package located northeast of Sudbury, Ontario.
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Victory Finalizes Drilling Program Agreement for Its Smokey Lithium, Nevada Property
Victory Battery Metals (CSE:VR)(FWB:VR61)(OTC PINK:VRCFF) ("Victory" or the "Company") is pleased to announce that the Company has reached an agreement, securing the equipment and services to conduct its drilling program with the newly identified hole locations in the area of interest contiguous with the southwest part of the original claim block for its wholly owned Smokey Lithium Property in Nevada, once its drill permit amendment is approved.
- Victory secures drill team in highly competitive market to ensure its Smokey Lithium project can advance expediently pending drill permit amendment approval
- Drill hole locations have been selected to extend strong lithium mineralization intersected previously on the property in hole 09 within the area of interest outlined in detail in the Company's press release dated 20 October 2022
- Combining results from field mapping, surface sampling, drilling and Tromino passive seismic studies, the Company has developed proprietary maps showing highly detailed visual cross sections to understand the faulting that would bound the deposit's edges
Victory's amended drill permit application includes the new high quality drill targets. The proposed program seeks to extend strong lithium mineralization intersected previously on the property's hole 09, which ended in strong, claystone hosted, lithium mineralization at 417 feet.
"In anticipation of Smokey Lithium's amended drill permit approval, the Company has secured drilling capabilities in what is an extremely competitive market, to ensure the exploration can advance in short order," said Victory President and CEO, Mr. Mark Ireton. "The permit amendment is designed to place holes on 500-1000 foot grid spacing over the Area of Interest, testing the marginalized depth of Hole 09 at such a distance to grow a resource while managing risk."
The planned second round drill targets are a perfect combination of step out drilling on previous a mineralized intersection along with grassroots targets of claystone sediments within the Weepah Detachment fault and underlying claystones of the Esmeralda Formation. The project area and surrounding lands show strong lithium mineralization with the Esmeralda Formation at surface. When combined with the highly encouraging results from Victory's first round drilling (completed in 2022) the project area is highly prospective. Only a handful of holes have ever been drilled within the project and surrounding areas, leaving robust potential for additional discoveries of lithium mineralized claystones.
Case for Smokey Lithium Property
Victory's Exploration team had theorized that based on the nearby Jindalee property; mineralized surface clays could be widespread similar to Clayton Valley. Due to the buried nature of these clays, some field mapping, surface sampling and 3 drill holes were carried out to confirm mineralized clay was in reach on Victory Ground.
- 1 of the 3 holes encountered mineralization, Hole 09, further validating Victory's theory for widespread buried mineralized clays, as announced on 31 May 2022
- 3 holes demonstrated the complexity of the subsurface structure and nature of the clays
- It was decided to hold off on any additional drilling until strategies could be deployed that would provide a better picture of the subsurface structure with respect to bedding dips, mineralized vs. non mineralized clay characteristics etc. and faults that would bound the deposit and or drop it too deep to be economically viable
Exploration Findings & Analysis
Following the initial drill program, the exploration team carried out additional detailed surface mapping of outcropping beds of lithium mineralized claystone, a detailed analysis of assay results on the various clay beds and finally a Tromino passive seismic survey to understand the faulting that would bound the deposit's edges.
All of this data has been processed and converted to geologic cross sections and sophisticated maps, proprietary to the Company. Upon completion of the map work, a 2.5 sq km area (approx.) was identified as high priority for further exploration. This new Area of Interest (AOI) resides within 91 newly staked claims and is contiguous with the southwest part of the original claim block. Hole 09, which ended in mineralization, fits within the AOI.
Summary of Findings and Actions
- Mineralized lithium clays exist on Victory's ground as evidenced in Hole 09
- Tromino passive seismic and surface mapping has identified control boundaries for the lithium discovered in Hole 09 (For example, faults, dipping of the beds etc.)
- Compiling all of this data has allowed the exploration team to generate cross sections, geologic mapping, and subsurface modelling with a high degree of confidence of the subsurface
- This compilation presents a 2-3km area with lowered risk, having a high likelihood to intersect lithium rich clays via drilling, and may indicate maiden resource potential
About Smokey Lithium, Nevada
Victory's Smokey Lithium project is a clay lithium property that lies approximately 20 miles north of Clayton Valley, to the west of American Lithium's flagship lithium project. Smokey Lithium is located northwest of Cypress' Clayton Valley Lithium Project and to the southwest of American Lithium Corporation's Tonopah Lithium Claims Property in southwest Nevada. Esmeralda County Nevada is a prolific region for lithium clay deposits, (Noram, Cypress, American Lithium, Spearmint, Enertopia, and Jindalee).
The technical information contained in this news release has been reviewed and approved by Bob Marvin (PGeo), who is a Qualified Person as defined under National Instrument 43-101.
For further information, please contact:
Mark Ireton, President
Telephone: +1 (236) 317 2822 or TOLL FREE 1 (855) 665-GOLD (4653)
E-mail: info@victorybatterymetals.com
About Victory Battery Metals
VICTORY BATTERY METALS (CSE: VR) is a publicly traded diversified investment corporation with mineral interests in North America. The Company is also actively seeking other exploration opportunities.
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statements
Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding future financial position, business strategy, use of proceeds, corporate vision, proposed acquisitions, partnerships, joint-ventures and strategic alliances and co-operations, budgets, cost and plans and objectives of or involving the Company. Such forward-looking information reflects management's current beliefs and is based on information currently available to management. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "predicts", "intends", "targets", "aims", "anticipates" or "believes" or variations (including negative variations) of such words and phrases or may be identified by statements to the effect that certain actions "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. A number of known and unknown risks, uncertainties and other factors may cause the actual results or performance to materially differ from any future results or performance expressed or implied by the forward-looking information. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of the Company including, but not limited to, the impact of general economic conditions, industry conditions and dependence upon regulatory approvals. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Company does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by securities laws.
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Victory Battery Metals
Overview
Victory Battery Metals (CSE:VR,FWB:VR61,OTCPINK:VRCFF) is a Vancouver-based junior mining and exploration company operating primarily out of North America. The company recently underwent restructuring and rebranding to pivot to battery metals, recognizing the significant opportunity brought about by the global efforts toward electrification and decarbonization.
As the push for clean energy and the global transition to net-zero continue to ramp up, lithium has never been more important. The burgeoning electric vehicle market exemplifies this, with sales of electric cars topping 6.6 million in 2021 and over 10 million in 2022. On the plus side, this explosive market growth will, according to the International Energy Agency, eliminate the need for roughly 5 million barrels of oil per year by 2030.
Victory’s flagship project, Smokey Lithium, has the distinction of being situated very close to the only lithium-producing silver mine in North America. In addition to Smokey Lithium, Victory maintains five other projects: Stingray Lithium Array in James Bay, Quebec; Georgia Lake Lithium property, Ontario; Tahlo Lake, in the Babine Copper-Gold Porphyry District, British Columbia; Saguenay Nickel Project, Quebec; and Black Diablo Copper and Manganese in Nevada.
These projects’ strategic locations in mining-friendly and infrastructure-ready jurisdictions position Victory to not only explore new sources of critical battery metals required to meet the growing demand, but also help disrupt the currently unbalanced supply chain, with China dominating roughly 70 percent of global lithium production despite the fact it only supplies 13 percent of the world's lithium.
Given China's questionable mining practices and propensity for leveraging the global supply chain as a political weapon, the status quo is far from ideal. Unsurprisingly, many countries — Canada and the United States among them — are investing heavily into establishing a domestic lithium supply chain. Victory Battery Metals is ideally positioned to take advantage of these investment efforts.
Company Highlights
- Recently completed a successful private placement for $2 million, and holds several million dollars in treasury.
- Smokey Lithium flagship project operates out of Nevada, one of the most mining-friendly jurisdictions in North America.
- Victory's primary focus is on bridging the considerable gap between supply and demand, and is benefitting considerably from federal mandates around lithium and critical battery metals production in both Canada and the United States.
- Work programs are planned for all major assets within the next twelve months.
- Maintains an incredibly diverse mining portfolio primarily geared towards the needs of the growing electric vehicle market. However, its assets also include precious metals such as gold and silver.
- Victory is actively working to identify opportunities in regions conducive to mining and geographic locations suited to year-round exploration and development.
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Mineral Resource Upgrade Paves Way for Northern Silica Project PFS
Emerging silica sands developer, Diatreme Resources Limited (ASX:DRX) announced today a significant upgrade to the estimated Si2 Mineral Resource at the Company’s Northern Silica Project (NSP) in Far North Queensland, highlighting the critical mineral project’s potential amid an accelerating solar energy boom.
- Significant 17% increase in Indicated Resource and establishment of maiden 49.5 Mt Measured Mineral
- Resource for Diatreme’s flagship Northern Silica Project (NSP) in Far North Queensland
- Results provide strong Resource foundation for upcoming Pre-Feasibility Study (PFS) and maiden Ore Reserve
- Bulk sample testing and further specialist metallurgical testwork currently underway at external laboratories
- NSP on track for development amid increasing demand for critical mineral key to solar energy industry.
The latest data has shown an increase in both the estimated Mineral Resource categories, with the inclusion of a maiden Measured Resource of 49.5 Mt, as well as increasing the size of the Indicated Resource to 120.5 Mt (up 17% from the previous estimate). Diatreme’s total low iron, high purity silica sand resource base exceeds 402 Mt, an extremely strategic and highly valuable resource that is well positioned to supply the fast-growing solar PV market.
Diatreme’s CEO, Neil McIntyre commented: “It is pleasing to report a further enhancement in the quality of the resource estimate for our flagship NSP, with the establishment of its first Measured category Mineral Resource and significant increase in its Indicated category Mineral Resource.
“The enhanced resource allows us to advance our PFS with greater confidence, providing a deeper understanding of the extraordinary potential for commercialisation contained within the Si2 dune complex at the NSP.
“We look forward to delivering the project’s PFS by mid-2024, together with a maiden Ore Reserve, as we ramp up development of this asset vital to the clean energy revolution, both in Australia and internationally.”
The resource upgrade follows moves by the Australian Government to promote the domestic manufacturing of solar panels under its $1 billion “Solar Sunshot” program. Low iron, high purity silica sand is a key ingredient in the solar PV manufacturing process (solar glass), which is currently dominated by China.
The NSP is also located near Cape Flattery, an area identified as a potential critical minerals hub for silica sand by the Queensland Government in its 2023 “Critical Minerals Strategy.”
Click here for the full ASX Release
This article includes content from Diatreme Resources Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Conquest Resources Enters into Agreement with VerAI Discoveries for AI Targeting on Belfast TeckMag Project
Tom Obradovich, CEO of Conquest stated, "It has been a unique experience working with the VerAI team to integrate their AI technology as another layer of targeting, which enhances our ability to potentially discover subsurface mineral deposits at the Belfast TeckMag Project. This area of Canada is one of the most cost-effective exploration regions and mineral-endowed belts in the world."
Belfast TeckMag Project MIAC Investigation
Over the past several years, Conquest has completed airborne electromagnetic and magnetic geophysical surveys, Mobile MT surveys, ground gravity surveys and regional drill programs. Recent examination of drill core by Dr. JF Montreuil, in particular diamond drill hole BC21-05, has indicated that mineralization and alteration facies are related to hydrothermal systems capable of forming IOCG and affiliated deposits. These systems are referred to as Metasomatic Iron and Alkali-Calcic systems or MIAC. The identified alteration types are similar to the Cloncurry region of Australia which hosts the Earnest Henry Mine in addition to other notable deposits. An exploration program beginning with prospecting and geological mapping of the areas of interest identified by VerAI and compiled with previous data will be conducted this spring under the direction of Joerg Kleinboeck, P.Geo, Vice President Exploration for Conquest. A program of diamond drilling is intended to commence later this year on VerAI targets as well as additional targets established by previous programs.
Yair Frastai, CEO of VerAI, expressed his confidence in the partnership, stating, "It's a privilege to work with Conquest, a well-experienced explorer in the region. Our team is committed to maximizing the chance of discovery by using our AI technology to provide Conquest with higher-probability drilling locations, calibrated from the ongoing drilling inputs."
ABOUT VERAI DISCOVERIES, INC.
VerAI Discoveries ("VerAI") is an AI-powered mineral discovery generator focused on uncovering essential critical minerals for the green energy transition and a sustainable future. Their mission involves working with mining partners to target new mineral discoveries in covered areas in mature mining jurisdictions that remain largely unexplored. By deploying their novel proprietary AI/ML Discovery Platform, VerAI significantly increases the probability of discovering economic mineral deposits of different commodities and in various geological jurisdictions, shortens targeting time, and reduces exploration costs. For more information, visit https://ver-ai.com/.
ABOUT CONQUEST
Conquest Resources Limited, incorporated in 1945, is a mineral exploration company that is exploring for base metals and gold on mineral properties in Ontario.
Conquest holds a 100% interest in the Belfast-TeckMag Project, located in the Temagami Mining Camp at Emerald Lake, Ontario, which is believed to have exceptional exploration upside for magmatic sulphide deposits (Cu-Ni-PGE), VMS, IOCG, Iron formation hosted Au and Paleo-placer Au. The Belfast-TeckMag Project is the Company's flagship property, evolved from the Golden Rose Project, which was initially acquired in December 2017, and significantly augmented through the acquisition of Canadian Continental Exploration Corp. ("CCEC") in 2020 and subsequent additional claim staking and purchases in its adjacent Belfast Copper Project and TeckMag Property.
Conquest now controls over 300 square kilometers of underexplored territory in the Temagami Mining Camp, including the past producing Golden Rose Mine at Emerald Lake.
Conquest also holds a 100% interest in the Alexander Gold Property located immediately east of the Red Lake and Campbell mines in the heart of the Red Lake Gold Camp along the important "Mine Trend" regional structure. Conquest's property is almost entirely surrounded by Evolution Mining landholdings.
In addition, the Company holds interests in the Smith Lake Gold Property, Lake Nipigon Basin Property, and the Marr Lake Property.
FOR FURTHER INFORMATION CONTACT:
general@conquestresources.com
www.ConquestResources.com
Tom Obradovich
President & Chief Executive
416-985-7140
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/205667
News Provided by Newsfile via QuoteMedia
SOURCE ROCK ROYALTIES ANNOUNCES INCREASED MONTHLY DIVIDEND
/Not for distribution to U.S. news wire services or dissemination in the U.S./
Source Rock Royalties Ltd. ("Source Rock") (TSXV: SRR), a pure-play oil and gas royalty company with an established portfolio of oil royalties, announces that its board of directors has declared a monthly dividend of $0.0065 per common share, payable in cash on May 15, 2024 to shareholders of record on April 30, 2024 . This represents an increase of 8% to the monthly dividend. Source Rock has now increased its monthly dividend by 30% since March 2023 .
This dividend is designated as an "eligible dividend" for Canadian income tax purposes.
Source Rock is a pure-play oil and gas royalty company with an existing portfolio of oil royalties in southeast Saskatchewan , central Alberta and west-central Saskatchewan . Source Rock targets a balanced growth and yield business model, using funds from operations to pursue accretive royalty acquisitions and to pay dividends. By leveraging its niche industry relationships, Source Rock identifies and acquires both existing royalty interests and newly created royalties through collaboration with industry partners. Source Rock's strategy is premised on maintaining a low-cost corporate structure and achieving a sustainable and scalable business, measured by growing funds from operations per share and maintaining a strong netback on its royalty production.
Contact Information
For more information about Source Rock, visit www.sourcerockroyalties.com .
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy of this release.
SOURCE Source Rock Royalties Ltd.
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/April2024/15/c4373.html
News Provided by Canada Newswire via QuoteMedia
Compelling Cobalt Copper and REE Targets Identified at Broken Hill
Rimfire Pacific Mining (ASX: RIM, “Rimfire” or “the Company”) is pleased to advise that multiple cobalt, copper, and Rare Earth Element [REE] targets have been identified at its recently expanded 100% - owned Broken Hill Project which is located 17-30 kilometres west of Broken Hill, NSW (Figures 1 and 2).
Highlights
- Detailed ground magnetics identifies a potential extension to high grade cobalt mineralisation drilled by Rimfire at Bald Hill last year, including;
- 125m @ 0.13% Co from 198 metres in FI2470 including 97m @ 0.15% Co
- Bald Hill Extension magnetic anomaly which has not been drilled present over 450 x 400m to a vertical depth of ~300m
- Additional magnetic anomalies identified 2km northeast of Bald Hill with initial rock chip samples up to 0.72% cobalt and 0.46% copper
- Rimfire will shortly commence reconnaissance mapping & sampling to refine new targets and plan for drilling in 2H CY24
Commenting on the announcement, Rimfire’s Managing Director Mr David Hutton said: “Rimfire is exploring throughout New South Wales for critical minerals that are associated with global decarbonisation strategies, such as scandium, PGEs, copper, and cobalt.
While we remain firmly focussed on the scandium exploration program currently underway at Fifield and Avondale, we are also keen to advance our recently expanded Broken Hill Project.
Broken Hill is shaping up as a compelling exploration opportunity for Rimfire with ground magnetics highlighting a potential extension to high grade cobalt sulphides drilled last year at Bald Hill, as well as the cobalt, copper and REE targets outlined in this announcement.
With executed Access Agreements in place, we will shortly commence a ground inspection of the targets with a view to drill testing during the second half of 2024 and look forward to further market updates as new information comes to hand.”
Click here for the full ASX Release
This article includes content from Rimfire Pacific Mining Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Rights Issue and Shortfall
Reach Resources Limited (ASX: RR1 & RR1O) (“Reach” or “the Company”) is pleased to announce it has received $822,595 from the recently completed non-renounceable rights issue.
As announced on 21 February 2024, eligible shareholders who participated will receive 1 fully paid ordinary share in the capital of the Company (“Share”) for every 3 Shares held, at an issue price of $0.002 per Share (pre-consolidation) (or $0.01 on a post-consolidation basis), together with 1 free attaching option to acquire a Share (“Option”) for every 2 Shares subscribed for and issued (“Rights Issue”).
Each Option issued under the Rights Issue will be exercisable within 3 years from the date of issue with an exercise price of $0.003 (pre-consolidation) (or $0.015 on a post-consolidation basis) (“New Options”). Participants in the Rights Issue will be issued Shares and New Options prior to 10am AWST, this morning.
In addition to the Rights Issue, the Company will be offering eligible holders of the existing RR1O listed Options (“RR1O Options”) a non-renounceable priority offer to subscribe for 1 New Option for every 1 RR1O held at an issue price of $0.0002 (pre-consolidation) or $0.001 (post-consolidation) per New Option, to raise up to approximately a further $0.26 million (“Priority Offer”). The issue of the New Options under the Priority Offer is subject to shareholder approval at the meeting to be held at 9:30 am AWST on the date of this announcement.
The Company intends to apply for the quotation of the New Options to be issued under the Rights Issue and the Priority Offer (together, the “Offers”).
Funds raised under the Offers will be allocated towards funding the exploration of the Company’s projects and for general working capital purposes.
The Company engaged Westar Capital Limited (AFSL 255789) (“Westar”) to act as lead manager for the Offers. In consultation with the Company, Westar has the exclusive right to the placement of any shortfall under the Rights Issue (ASX Announcement 14 March 2024 – Entitlement Issue Prospectus) (“Shortfall Offer”). Westar have been advised of the shortfall and the Company looks forward to providing an update to shareholders regarding the placement of the shortfall, in the short term.
Consolidation
Subject to receipt of shareholder approval at this morning’s General Meeting, the Company plans to consolidate its issued capital on a 1 for 5 basis (“Consolidation”).
The Consolidation will apply equally to all shareholders, individual shareholdings will be reduced in the same ratio as the total number of shares (subject to rounding of fractions). The Consolidation will have no material effect on the percentage interest in the Company of each shareholder from a pre- consolidation basis to a post-consolidation basis.
Click here for the full ASX Release
This article includes content from Reach Resources, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
McKinsey: Commodities Trading Generated US$104 Billion in 2023
A recent report from McKinsey highlights trends seen in commodities trading over the past year.
The document shows that despite global uncertainty, commodities trading generated over US$100 billion in earnings before interest and taxes in 2023, translating into more than US$150 billion in gross margin.
McKinsey mentions challenges related to COVID-19 and geopolitical conflicts, such as increased price volatility and supply chain disruptions, but notes that commodities trading value pools have show resilience.
Total trading values remained relatively stable in 2023 following rapid growth from 2021 to 2022.
Commodities trading trends in 2023
Looking at specific commodities, McKinsey notes that oil and oil-based products remain the largest value pool, although their profitability decreased in 2023. The firm also notes that the year brought physical volatility.
Total demand for oil is seen growing for the majority of this decade, followed by a decline after 2030. Demand for the commodity is forecast to decrease by nearly 50 percent by 2050.
Until then, competition is anticipated to escalate as more large players enter the fray. According to McKinsey, national oil companies and legacy oil marketers are already bolstering their trading capabilities.
For power and gas, trading pool value saw a bump in 2023, with markets seeing above-average volatility.
New opportunities are emerging in power and gas trading, particularly around entering new markets, data-driven trading and investments in new assets like battery energy storage systems.
The liquefied natural gas (LNG) market continued to grow in 2023, playing a crucial role in maintaining energy security in Europe. Similar to oil, market competition is poised to escalate as players that traditionally relied on long-term pipeline gas contracts, particularly in Europe, can now leverage their existing customer base to bolster their trading capabilities.
For metals and mining, trading profitability decreased in 2023, driven by elevated energy prices and lower commodities prices. Even so, nickel production saw a notable upsurge, largely driven by Indonesia, while lithium output experienced only modest growth. McKinsey sees the energy transition driving metals demand in the years to come.
Commodities sector increasingly interconnected
Aside from that, the McKinsey report highlights two major trends shaping commodities markets today.
The first is increasing interconnectedness. According to McKinsey, the average correlation between commodities vital to the energy transition has doubled, reaching 56 percent from 2015 to 2019.
Part of the reason for that is increased diversification of supply, which has led to a decrease in long-term relationships and a surge in short-term contracts. The LNG market exemplifies this shift, notes McKinsey, with approximately 100 new LNG tankers launched in the past three years, poised to surpass oil carriers by 2028.
Similarly, flexible contracts are gaining traction as buyers seek to mitigate risk. This shift often leads to higher exposure to global prices, as residual volumes are typically priced based on current market levels. The competition between Asia and Europe for additional LNG volumes highlights the growing preference for spot or indexed contracts.
However, not all markets follow this pattern. Critical industries like agriculture and certain metals, where supply chain security is paramount, often enjoy protection from local authorities.
Power to play a key role in the energy transition
The second major trend McKinsey mentions is the growing role of power in the energy transition.
The firm notes that power will be key to meeting the net-zero goals outlined in the Paris Agreement, and states that the power sector's value is anticipated to grow by up to 5 percent annually, reaching US$1.3 trillion to US$2.4 trillion by 2040.
However, the road to a sustainable energy future is not straightforward. Unlike other commodities, power demands immediate generation and consumption in close proximity. While solar and wind have spearheaded initial efforts in the energy transition, the journey to achieving the next 50 percent reduction in emissions presents complex hurdles.
Solutions such as nuclear, hydrogen and carbon capture necessitate substantial investments, alongside urgent grid expansions to accommodate evolving demands.
In Germany alone, the annual buildout of the transmission grid is projected to skyrocket by a factor of five, with approximately 1,900 kilometers added per annum by 2035, compared to a mere 400 kilometers previously.
Renewables, particularly wind and solar, are also set to dominate the power mix from 2030 to 2050. Yet this reliance on renewables introduces dependencies on other commodities. For instance, wind turbines, which are integral to renewable energy infrastructure, heavily rely on materials like steel, copper and aluminum.
Investor takeaway
As uncertainty drives large value pools in commodities trading, McKinsey is suggesting that players in this market embrace data-driven trading, which involves artificial intelligence.
The firm believes this approach can give commodities traders an advantage, particularly in power and gas.
"To expand capabilities and agility, players will need to think through the macrotrends to determine which cross-commodity opportunities are the best fit, what role traders can play in power, and how to differentiate across managing illiquid risks, data-driven trading, and having deep capabilities in niche commodities," states McKinsey.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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