Critically endangered metals

EV cars, 3D printed houses, automated homes and ultra-efficient renewable energy power generators are just some of the future innovations leading us to a better, cleaner world.

And with the stroke of a pen, governments across the globe have started this carbon free, pollution free, automated utopia we all want.

Yet, there is one KEY factor that environmentalists, leaders, CEO’s, celebrities have left out...

How do we get the raw materials to build this multi-trillion dollar dreamland?

A Transition Nightmare awaits as we move from Carbon to Renewable Energy

Knowing whether the world can actually supply the critical metals needed to fuel the ‘green revolution’ would be a logical first step before going about an ambitious carbon reduction policy.

Can we actually get enough stuff out of the ground to build the replacement technology?

This is not a question on the radar for the politicians, climate scientists or advocates pushing change.

Commodity experts were not invited to the Paris or Glasgow Climate summits.

It was a decision reserved for governments and climate scientists.

Yet the main limiting factor for all this policy driven change is the availability of raw materials.

The minerals needed to build wind farms, solar panels, batteries, EV vehicles.

Policy makers have made BIG assumptions that resources will be available.

They’re relying on old economic rules of supply and demand.

Create demand for critical metals and the supply will invariably arrive.

Basic economic theory to them.

However, by pushing this market philosophy onto a finite resource like critical minerals, the demand side of the equation starts to levitate precariously upward.

Supply of critical metals is not a straightforward process of increasing production like it would be for iron ore mining.

To meet spectacular demand for critical metals requires vast global investment to drive exploration.

Then, assuming exploration is successful…

It would require enormous global capital to build sophisticated processing facilities required to extract critical metals from ore.

Again, a process that requires far more infrastructure and technology compared with the relatively straightforward method of processing iron ore.

What does all this mean for commodity investors?

Well, while ‘Ass-umptions make an Ass’ out of our leaders, they’ve unknowingly gifted you a once in a generation investment opportunity.

Remember, it takes at least 15 years to bring an ore body from discovery to production.

That’s assuming an economically viable source of critical metals can be discovered in the first place.

It all boils down to a massive re-pricing of mining companies that ALREADY own the exceedingly difficult to find critical metal deposits.

But first, What Makes a Metal so ‘Critical’ in the First Place?

The ‘Great Green Energy Transition’ isn’t the only sector that will need critical metals in the future.

It includes ALL segments of the economy.

A tidal wave of changing technologies means an enormous shift in the types of raw materials needed.

From healthcare, defence, manufacturing, the commercial need for these metals is diverse.

Critical minerals includes those traditional elements like copper, nickel, and aluminium.

It also includes lithium, cobalt, and the Rare Earth Elements (REEs).

But thanks to the birth of highly specialised technologies, obscure sounding metals, also sit at the forefront in determining the way we live into the future.

Without trying to make this sound like a Year 10 Science class, we only need to take a peek at some of the bizarre sounding metals now shaping future investment in mining.

There’s promethium, a healer, and a weapon.

This element is a critical component for making pacemakers but it’s also used for building self-guided missiles in defence.

Or niobium, scientists have capitalised on its unique ‘superconducting’ properties allowing them to develop new kinds of superfast, highly energy efficient large-scale computing, without the need for semiconductors.

Or there’s zirconium, a key metal used for cladding nuclear reactor fuel cells.

The potential for critical metals is endless, the only limitation is SUPPLY.

It’s no wonder resource companies have started eagerly sifting through old drill core in the hope of finding a strike in critical metals.

It’s an inexpensive strategy that could gift a company an instant windfall.

Finding a mineable body of one of these modern day gems would be an immediate game changer for the company.

But these small wins won’t be enough to supply the breathtaking level of demand that’s coming…

One example, a mineral known as natural graphite, used in cathodes of lithium-ion batteries needs a mere 600% increase to its current production to meet future demand!

That’s the outlook published by Benchmark Mineral Intelligence.

Are these Metals really that Rare?

The answer to this question has been muddied by those unwilling to accept supply issues.

Some pundits have argued the so called ‘critical metals’ are not in fact rare at all.

While this may be true in some instances, it’s a distraction from reality in terms of how it affects supply.

Critical metals must be found in high enough concentration to allow economic extraction.

In summarising the scarcity of Rare Earth Elements (REE’s) Geoscience Australia explains: