Alongside joint venture agreements, mergers and acquisitions provide a chance for both major and mid-tier mining companies to expand and consolidate their portfolios. Junior explorers with strong mineral assets and solid leadership can present a sound investment opportunity.
According to a myriad of reports, the People’s Republic of China has been buying hoards of gold during the last year. Consequently, World Gold Council (WGC) statistics show the demand for gold by central banks has risen at the fastest pace in 55 years. Meanwhile, Wells Fargo’s head of real asset strategy, John LaForge, contends that when silver starts outperforming gold, it usually signals it is “closer to a bull market in precious metals versus the other way.”
he UAE stock market ended 2022 on a high, posting its highest annual gains in history when it closed for trading on Friday.
As blockchain technology continues to expand its reach, the endless opportunities to revolutionise our world have become evident. From streamlining financial transactions in banking and insurance to improving security for digital assets and smart contracts, this technology is set to transform the way we live.
Gold is in a transition phase. In the past nine months two key developments—war and inflation—have made gold trade much stronger than how it was priced from 2006 through 2021. Both developments are likely to stick around in the coming years and will prove a tailwind for gold. Moreover, the current monetary environment is adding support to the gold market as governments and central banks risk insolvency. For the medium- and long-term I’m therefore optimistic on gold. In the short-term gold still has downside risk due to rising interest rates and the possibility of collapsing asset markets triggering a liquidation event.
Is the price of gold at an inflection point?
From 2006 until early 2022 the market priced the U.S. dollar gold price based on the 10-year TIPS yield, which can be seen as the expected real interest rate on 10-year U.S. government bonds, and dollar strength. In my article from January 2022 I have explained the mechanics of TIPS bonds and gold’s inverse correlation with the TIPS yield. Basically, the TIPS yield is the nominal interest rate on U.S. government bonds (the Treasury rate) minus inflation expectations.
TIPS rate = Treasury rate – inflation expectations
The correlation between gold and the TIPS yield is inverted because the lower the TIPS yield (expected real rate) the more investors are incentivized to buy gold and vice versa.
Let’s have a look at an updated chart of the 10-year TIPS yield versus gold prices.
We can see that until recently the correlation was tight. From 2014 until 2017 the gold price traded below the TIPS yield because of a strengthening dollar. Remarkably, since the war in Ukraine gold is not only trading firmly above the TIPS yield, it’s doing so while the dollar is going up. Based on how it was priced in the past 15 years gold should be trading at $800 dollars an ounce now, but it’s not. At the time of writing gold trades around $1,700. What’s going on?
The first development that has changed how gold is priced is Russia’s invasion into Ukraine, which set in motion a proxy war between the West and Russia. As ties between the U.S. and China are also deteriorating, for example over chip technology and Taiwan, it can be expected the division between East and West will accelerate. The consequences are that the East is hastening to de-dollarize and trade between East and West is declining. The former boosts gold as investors are looking for an alternative store of value. The latter—de-globalization—will reshore production and create new supply chains, which is inflationary and supportive for gold too.
The war made the U.S. decide to freeze dollar assets owned by the Russian central bank (CBR). This watershed moment has startled all foreign holders of dollars. Countries in the East holding large dollar reserves are warned their assets can be rendered worthless in the blink of an eye. Sovereign wealth funds and other investors are buying gold because there aren’t many alternatives for the dollar. Gold isn’t issued by any country or central bank, and thus has no political or credit risk, it’s in limited supply, it’s untraceable, and has a five thousand year track record as a store of value.
The freezing of CBR’s dollars has lowered foreign demand for U.S. Treasury bonds during a trend in which foreigners are already willing to hold less of the total U.S. federal debt. Potentially, this could lead to a funding problem for the U.S.
Recently the World Gold Council (WGC) reported central banks bought close to 400 tonnes of gold in Q3 2022, which is four times as much compared to Q3 2021 and a record since the end of Bretton Woods. Although, this number should be taken with a pinch of salt, as it’s mostly based on field research and not what central banks report to the IMF. Most people I talk to in the industry agree the Chinese central bank, and a few others, buy gold covertly. We may assume this is reflected in WGC’s estimates.
Some investors are disappointed by gold’s performance this year because the price in dollars is down while consumer prices in the U.S. have increased by 8% year-on-year. What they fail to see is how gold was priced in recent years—based on the expected real yield—and how that is changing. Now inflation is showing to be sticky, and the world is de-globalizing, gold seems to be in a transition phase. Some entities sell gold based on the old model; others are buying based on a new model.
There are analysts that presume inflation has peaked and will sharply drop. I’m more tempted to think it will stay elevated for the foreseeable future. First, Deutsche Bank analysts researched 318 episodes across developed and emerging markets since 1920 in which inflation reached 8%. The team concludes we have passed the point of no return:
When zooming in on developed economies since the world is on fiat only money (1970), the team finds that inflation has been even stickier.
More from Deutsche Bank:
Fiscal policy has remained loose throughout this inflation shock to ease the burden of Covid and higher energy prices. Indeed even now, many European countries are still pursuing fiscal stimulus packages of various kinds to cushion their citizens from the impact of the energy shock. In the meantime, monetary policy has also been behind the curve, … And, even after the hikes we’ve already had, central bank policy rates remain incredibly negative in real terms. So, you could argue this is the loosest policy response to inflation we’ve ever seen in peacetime. … However, the current consensus expects us to be back at or even below 3% just two years after we initially moved above 8%.
Perhaps gold knows more about what’s coming than the bond market, and hence gold’s pricing model is changing. Interesting fact: before 1914, inflation was practically non-existent due to metallic monetary standards.
Second, since the pandemic several governments have taken control over the printing press. In an interview with market strategist and historian Russell Napier, he explains that while many central banks are tightening, their governments are easing through loan guarantees. Commercial banks create credit, which increases the money supply, and governments will pay the bill when the loan turns sour. “This is the new normal,” says Napier, and inflation will stay around 5% in the coming years as governments want inflation to lower their debt burden. Finding reasons to ease comes naturally for politicians with endless ambitions to win votes: reducing inequality, general investments to combat climate change, the energy transition, etc. From Napier:
Just to give you some statistics on bank loans to corporates within the European Union since February 2020: Out of all the new loans in Germany, 40% are guaranteed by the government. In France, it’s 70% of all new loans, and in Italy it’s over 100%, because they migrate old maturing credit to new, government-guaranteed schemes. Just recently, Germany has come up with a huge new guarantee scheme to cover the effects of the energy crisis. This is the new normal. For the government, credit guarantees are like the magic money tree: the closest thing to free money. They don’t have to issue more government debt, they don’t need to raise taxes, they just issue credit guarantees to the commercial banks.
Third, the world is still highly dependent on fossil fuels, for conventional energy use and to realize the energy transition, but new oil discoveries are dwindling. From Rystad Energy (June 2022):
Continuing the trend from previous years, Rystad Energy’s 2022 review shows a sizeable drop in recoverable oil resources in what could deal a major blow to global energy security. According to Rystad Energy analysis, global recoverable oil now totals an estimated 1,572 billion barrels, a drop of almost 9% since last year.
A tight oil market will persist in the coming years, driving up the price of oil, which will be passed on in prices of goods and services, further fueling inflation.
Fourth, commodity price are currently subdued because China is holding on to zero COVID policy, limiting production and thus demand for anything from base metals to oil. If China would reverse course and open up, commodity prices get a push and so too inflation.
After 40 years of moderate inflation Wall Street is conditioned thinking inflation will always swiftly revert to 2%. This reflects strong confidence in central banks and governments. Misplaced confidence?
Now central banks are raising rates, it’s becoming ever more apparent they themselves, and governments, pose a threat to the economy. In Europe, for example, Italy has so much public debt that the ECB has virtually been the only buyer of Italian government bonds in recent years. So how is the ECB suppose to tighten (sell Italian government bonds) and hike rates without Italy going bankrupt?
Central banks that conducted Quantitative Easing (QE) in the past years and now raise rates are suffering losses due to increasing interest expenses on their liabilities. In my previous article I shared the Dutch central bank is making losses that will have a severe impact on its equity (capital). But other European central banks, the Bank of England, and the Federal Reserve have the same problem.
There are three scenarios for central banks having burned through their equity:
The theory of revaluing gold has gone mainstream after renowned financial journalist Ambrose Evans-Pritchard mentioned it in The Telegraph on November 7, 2022. Markets might anticipate a gold revaluation and buy gold accordingly. Additionally, they might buy gold as a safe haven for when sovereigns default and cause contagion in financial markets.
There is a plethora of challenges in global finance. Previous to 2022 such challenges could temporarily be resolved by QE and zero interest rate policy (ZIRP), while fundamentally making matters worse: debt levels kept going up. Due to inflation these options are lethal. There is no easy way out anymore. War, inflation, and solvency risk could be a perfect storm for gold.
When the oil market liberalized in the 1970s, a group of commodity trading buccaneers led by the infamous Marc Rich made fortunes by connecting buyers and sellers and surfing the price swings of this newly tradable commodity. Half a century later, some of Rich’s spiritual descendants are hoping to pull off a similar trick in lithium.
A vital component in most electric-vehicle batteries, lithium is becoming one of the world’s most important commodities. Prices have soared to unprecedented levels as demand forecasts keep growing, leaving automakers scrambling to secure future supplies.
Yet until fairly recently, it’s been almost impossible to trade. Prices would be fixed in long-term private contracts between the handful of dominant suppliers and their customers, with no need for middlemen. Now, the surging demand is shaking up the way that lithium is bought and sold: Many supply deals have become dramatically shorter — with floating prices linked to the spot market — while exchanges from Chicago to Singapore are experimenting with new futures contracts.
Surging prices for the battery material are piling pressure on car-makers
And it’s getting the traders’ attention. Companies like Trafigura Group and Glencore Plc that make money moving commodities from copper to crude and coal around the world, are starting to wade into the lithium market. Traders say they can help the market broaden and mature, and reduce risks for other players in the supply chain. Some, like Trafigura and Carlyle-backed Traxys SA, are also investing in new production sources.
“The activity of traders in the lithium market should make this a more transparent and efficient market over time,” said Martim Facada, a lithium trader at Traxys. “It’s like oil in the 70s when governments would sell to consumers but then traders started providing services and that helped growing and developing the market faster. Lithium’s starting to go through that process.”
Of course, the comparison with oil 50 years ago isn’t a perfect one. The lithium market is tiny compared with more established and liquid commodity markets — annual world oil production is worth more than $3 trillion at current prices, versus $30 billion for lithium. The metal is also refined into highly specialized chemicals that some experts argue are much less fungible.
The approximate value of annual mined lithium production is dwarfed by copper
One of the concerns in the lithium market is that the extreme supply shortages create a risk that prices rise so high, or metal becomes so difficult to access, that automakers have to stop buying.
Commodity traders have a long history of squeezes and shocks in commodity markets, and the high stakes in lithium — so crucial to the success of the world’s decarbonization efforts — could leave them open to criticism. But despite the industry’s swashbuckling reputation, the traders insist they are treading carefully and are focused on helping to alleviate shortages, not make them worse.
“If a trader is to get involved, it needs to be done with an entirely different approach,” said Socrates Economou, Trafigura’s head of nickel and cobalt trading, who also oversees lithium. “You already have a price that can lead to demand destruction — if you’re going to have market participants driving the price higher, I don’t see how this market can sustain itself.”
Trafigura estimates demand will hit 800,000 tons of lithium carbonate equivalent this year — overshooting supply by 140,000 tons — and sees demand rising by a further 200,000 to 250,000 tons annually through 2025.
And while the world needs more and more lithium, investment in new supply has not kept pace with rising demand. Trafigura’s focus so far has been on tying up deals with early stage mining and refining projects. Traxys, another early mover into the industry, is taking a similar approach, scouring the globe for new sources of supply and helping to nudge them into production. The aim is to make money increasing the overall flow to car-makers, said Facada.
Other traders are also looking at lithium. Glencore, which is the largest producer of another key battery metal, cobalt, has invested in recycling startup Li-Cycle Holdings Corp. and is thinking about starting to trade lithium produced by the company, as well as third-party material.
Traders IXM, Transamine SA and Mercuria Energy Group Ltd. have all set up lithium trading books in recent years, while Japan’s Mitsui & Co. has long been active in the sector.
The traders are stepping into the lithium market at a time of dramatic transformation. For years, the main customers for lithium producers were largely niche manufacturers in sectors like pharmaceuticals and industrial lubricants. Now, as carmakers have taken over as the biggest buyers, miners have been shifting towards a shorter-term pricing model that better reflects the mismatch between demand and supply. It’s a trend that’s drawn comparison to a seismic overhaul in the iron ore market as producers shifted to spot pricing in the 2000s, but it’s placing a strain on consumers and producers alike.
Tesla Inc. CEO Elon Musk has said that spot prices have become “crazy expensive,” and after years of urging producers to supply more, he’s stepping up efforts to refine it himself. Meanwhile, investors are pressuring top miners like Albemarle Corp. to shift their contracts over spot pricing more aggressively, potentially adding to the strain on their customers as the buying frenzy continues.
It will probably take some time before lithium matures to become more of a tradable commodity market, said Kent Masters, chief executive of Albemarle, the world’s largest lithium producer. With the spot market growing, the next key milestone for the industry will be the development of liquid futures contracts.
“We do think ultimately there’ll be an instrument out there where you can hedge lithium prices or speculate on the market financially,” he said in an interview. “It’s a good thing once it matures. But it’s going to take some time — it’s not today.”
In addition to helping make markets more efficient, traders say they can also manage risks for automakers and battery producers that are starting to look at mining projects and investments in a way that would have been unthinkable for many just a few years ago, as supply fears begin to rise. That will take them into riskier jurisdictions than they’re used to operating in, and leave them exposed to cost blowouts and wild price swings that are common to the mining industry.
“One of the roles we play is to connect different levels of supply chain to provide some level of price protection,” said Claire Blanchelande, Trafigura’s head lithium trader. “In addition to banks getting involved, car-makers are also getting comfortable because of our involvement.”
Source: Bloomberg
China and Russia may be working toward a new gold-backed currency in a move that would aim to dethrone the dollar as the primary reserve currency of the world, but any such currency would unlikely achieve that goal.
“The USD remains the safest, most convenient and most widely used currency in Asia and in the world today,” Min-Hua Chiang, a research fellow and economist at the Heritage Foundation’s Asian Studies Center, told FOX Business. “No other currency (backed by gold or otherwise) is comparable, and that is unlikely to change in the near future.”
Neither country has officially confirmed plans for such a currency, but China earlier this year started to buy up huge quantities of gold at the same time that Russia was forced off the dollar due to sanctions in response to the invasion of Ukraine. The war also led to the steepest discount on gold prices in years.
Some experts caution that these moves, along with the closer relationship that has developed between Moscow and Beijing as the rest of the world has isolated Russia after the invasion, point to the likelihood of China attempting to launch a new currency with gold backing it.
The idea of a joint Russo-Sino currency has periodically surfaced over the past decade, especially after the Russian Central Bank opened its first overseas office in Beijing in 2017.
Craig Singleton, Senior Fellow at the Foundation for Defense of Democracies, noted that Chinese leaders have spoken for two decades about reforming the global financial system and weakening the dollar’s dominance.
“Two components in that strategy center around the development of a Yuan-based global commodities trading system and efforts by China, in partnership with Russia and other like-minded countries, to challenge dollar dominance by creating a new reserve currency,” Singleton told Fox News Digital.
“In essence, Beijing and Moscow are seeking to build their own sphere of influence and a unit of currency within that sphere, in effect inoculating themselves from the threat of U.S. sanctions,” he added.
But the record amount of gold that China has purchased has raised some eyebrows, even as the trend remains under the radar for mainstream media: Swiss gold exports to China hit a five-year high, with Beijing in July alone receiving 80.1 tons of gold valued at around $4.6 billion – more than double the 32.5 tons it bought in June and the second-highest monthly total since 2012, according to Reuters.
International Financial Statistics from March 2022 indicated that China may have the seventh-most gold stores, with more coming every month.
Francis Hunt, a trading expert, told Asia Markets that using gold to back the currency would be the best way to build confidence in said currency, and that currency may be digital in nature to give China a greater scrutiny over its citizens’ activity.
But Chiang downplayed the potential success of a new currency due to the “relatively small trade volume” that would limit its growth, and that a digital currency would prove difficult to promote.
“Even if both countries use a new currency for bilateral trade transactions, the relatively small trade volume between will limit the impact on the U.S. dollar,” Chiang argued, noting that a multinational currency, like the Euro, requires “a level of political and economic coordination and integration that is not present in Asia today.”
“The appeal will be limited,” Chiang said. “Consider that in August 2022, 43% of global payments were conducted in USD, followed by 34% in Euro. RMB accounted for just 2% of total global payments according to RMB Tracker.”
“The RMB is gaining some ground, but it is still leagues behind the USD and Euro,” she concluded, adding that “foreigners’ confidence towards China’s and Russia’s economic prospects (or lack thereof) is a key limitation” to any potential joint currency.
Source: Yahoo Finance
The global demand for lithium is reaching new heights.
The lithium market has witnessed numerous price increases throughout the year. Additionally, the production of lithium, like other raw materials, is failing to keep up with demand. In fact, demand for lithium has been skyrocketing in recent years, in large part as the result of the ever-expanding electric vehicle (EVs) market.
According to Platts Analytics, global plug-in light-duty EV sales are expected to rise to 6.5 million units in 2022 and 10.5 million units in 2025, up from an estimated 6 million units in 2021 and 3.1 million units in 2020.
Lithium-ion batteries are being rapidly adopted due to their compact size, rechargeability, recyclability and high-density energy output. Infinity Stone Ventures Corp. (OTC: GEMSF) (CSE: GEMS), BrightRock Gold Corp. (OTC: BRGC), Patriot Battery Metals Inc. (OTC: PMETF), Standard Lithium Ltd. (NYSE: SLI), Snow Lake Resources Ltd. (NASDAQ: LITM)
While the EV industry remains in its infancy even as battery technology advances, demand for lithium in the sector is only expected to accelerate.
William Tokash, Senior Research Analyst with Navigant Research, said:
The push by automotive original equipment manufacturers (OEMs) and battery manufacturers to continually reduce battery pack costs continues.
And, the Global Lithium Market size was estimated at USD 5.5 Billion in 2021 and expected to reach USD 9.8 Billion in 2026, at a Compound Annual Growth Rate (CAGR) 11.93%, according to ResearchAndMarkets.
Infinity Stone Ventures Corp. (OTCQB: GEMSF) (CSE: GEMS) announced earlier this month breaking news, “that it has entered into an option agreement to acquire an additional 1,336 hectares directly adjacent to the Company’s Hellcat Project (the “New Claim Block”), which is part of Infinity Stone’s larger Camaro Project, near Patriot Battery Metals (“PMET” or “Patriot”) Corvette Lithium Discovery in the James Bay Region of Quebec.
The block is contiguous with the northwestern boundary of Infinity Stone’s Hellcat Project. The newly acquired area hosts an additional five pegmatite occurrences, with an additional 11 appearing in the southeastern Hellcat Project.
The fall exploration program, conducted by Axiom Exploration Group, Infinity Stone’s contracted technical team, (the “Fall Program”) was extremely successful in confirming historically mapped pegmatites and identified new showings.
87 samples were collected over 3850 hectares of claims adjacent to the Patriot discovery. The samples have been shipped to Saskatchewan Research Council (“SRC”) lab in Saskatoon, Sask., with assay results expected to be returned in the coming weeks.
One of the significant highlights of the Fall Program was the identification of a cluster of highly prospective pegmatitic dykes and cross cutting structures near the northern margin of the Hellcat claims extending to the north, into the newly acquired claim area.
The white, coarse grained, pegmatite dykes in this area were mineralogically characterized by tourmaline, garnet, and muscovite which are common LCT (Lithium-Cesium-Tantalum) pegmatite indicator minerals in the district.
The New Claim Block is underlain by 9 km of strike length of underexplored greenstone and metasediments of the Mesoarchean Rouget formation and Neoarchean Marbot formation respectively.
The under-explored Rouget formation greenstone belt represents an attractive exploration target which is geologically similar and proximal to the Guyer Group greenstone which hosts the PMET Corvette Pegmatites.
Zayn Kalyan, CEO of Infinity Stone, said:
Following our recent Fall Program, we moved quickly to expand our footprint and focus on the most prospective areas of the Camaro Project in James Bay.
“The identification of tourmaline, garnet, and muscovite, in pegmatites on the expanded Hellcat have given us an area of considerable interest and will be critical to our exploration program moving forward,” furthered Mr. Kalyan…
Qualified Person – Technical information in this news release has been reviewed and approved by Case Lewis, P.Geo., a “Qualified Person” as defined under NI 43-101 Standards of Disclosure for Mineral Projects and a director of the Company.
BrightRock Gold Corp. (OTC: BRGC) announced on August 29th, that the team at Red Beryl Mining Company continues their work on an extensive mapping program of the completed 1400 acre expansion. BrightRock is excited to announce that the team has discovered a second mine with a possible substantial lithium deposit.
The Lone Giant Prospect approximately 0.38 miles from the recent P. and G. Beryl discovery. BRGC CEO Mac J. Shahsavar, P. Eng. Commented “Steven Cyros has been commissioned to do an on ground inspection and a live video at both the P. and G Beryl and Lone Giant Prospect.
BrightRock Gold will release the Inspection Video shortly for our investors’ viewing. We continue to establish ourselves as a major contender in the lithium space. With the recent 1400 acre expansion, discovery of two additional historic mines, we are developing a portfolio of lithium-rich assets to become a major supplier of lithium based products.”
Patriot Battery Metals Inc. (OTCQB: PMETF) announced on October 12th, core assay results for twelve (12) additional drill holes (CV22-040, 041, 045, 047 through 054, and 056) from its 2022 drill campaign at its wholly owned Corvette Property (the “Property”), located in the James Bay Region of Quebec.
The primary drill area is focused at the CV5 Pegmatite, located approximately 13.5 km south of the regional and all-weather Trans-Taiga Road and powerline infrastructure with two drills currently coring. A third drill rig has been active at the CV13 pegmatite cluster for initial drill testing since early September.
Standard Lithium Ltd. (NYSE: SLI) provided an update on September 7th, on its first commercial lithium plant in Arkansas.
Dr. Andy Robinson, President and COO of Standard Lithium commented:
The award of this FEED study marks a significant milestone for Standard Lithium as it moves the Company and all our project partners closer to commercialization.
“Our internal project team went through a rigorous competitive selection process, and we are delighted to work with OPD and its partners in KES and M3 Engineering to design our first commercial facility and move towards an EPC contract and then to construction.”
“The selection process and study award are further examples of Standard Lithium’s commitment to disciplined and responsible project development. Commercial discussions with Lanxess that will support the construction and operation of the first commercial plant are ongoing, as are all supporting studies such as permitting, geotechnical investigations and engineering integration with Lanxess’ existing infrastructure.”
Snow Lake Resources Ltd. (NASDAQ: LITM) announced on October 4th, hosted LG Energy Solution in Manitoba, Canada on September 13th to explore the potential next step towards building a domestic supply chain for the North American electric vehicle market.
Cliff Cullen, Manitoba’s Deputy Premier commented:
Companies such as LG Energy Solution and Snow Lake Lithium are leading the exploration and development of critical minerals that will be key to helping the world pursue the goal of decarbonisation.
Philip Gross, CEO Snow Lake Lithium said:
The visit was a great success and there is an exceptional opportunity here in Manitoba to establish a strong domestic supply chain for the US automobile industry.
“Following our exciting collaboration with world-leading LG Energy Solution we are confident that our rock to road battery supply chain will help the electric vehicle market in North America.”
Source: Batteries News
Paris-headquartered minerals giant Imerys plans to develop a lithium extraction project that it’s hoped will help meet demand and secure supply for Europe’s emerging electric vehicle market.
In a statement Monday, Imerys said its Emili Project would be located at a site in the center of France, with the company targeting 34,000 metric tons of lithium hydroxide production each year from 2028.
According to the business, this level of production would be enough to “equip approximately 700,000 electrical vehicles per year.”
Alongside its use in cell phones, computers, tablets and a host of other gadgets synonymous with modern life, lithium — which some have dubbed “white gold” — is crucial to the batteries that power electric vehicles.
The project being planned by Imerys is taking shape at a time when major economies like the EU are looking to ramp up the number of electric vehicles on their roads.
The EU plans to stop the sale of new diesel and gasoline cars and vans from 2035. The U.K., which left the EU on Jan. 31, 2020, is pursuing similar targets.
With demand for lithium rising, the European Union — of which France is a member — is attempting to shore up its own supplies and reduce dependency on other parts of the world.
In a translation of her State of the Union speech last month, European Commission President Ursula von der Leyen said “lithium and rare earths will soon be more important than oil and gas.”
As well as addressing security of supply, von der Leyen, who switched between several languages during her speech, also stressed the importance of processing.
“Today, China controls the global processing industry,” she said. “Almost 90% … of rare earth[s] and 60% of lithium are processed in China.”
“So we will identify strategic projects all along the supply chain, from extracting to refining, from processing to recycling,” she added. “And we will build up strategic reserves where supply is at risk.”
Back in France, Imerys said it was finalizing what it described as a “technical scoping study” in order to “explore various operational options and refine geological and industrial aspects relating to the lithium extraction and processing method.”
The site selected for the project has, since the end of the 19th century, been used to produce a type of clay called kaolin for use in the ceramics industry.
The construction capital expenditure of the proposed lithium project is estimated to be around 1 billion euros (roughly $980 million), Imerys added.
“Upon successful completion, the project would contribute to the French and European Union’s energy transition ambitions,” the company said. “It would also increase Europe’s industrial sovereignty at a time when car and battery manufacturers are heavily dependent on imported lithium, which is a key element in the energy transition.”
In recent years, a range of factors has created pressure points when it comes to the supply of the materials crucial for EVs, an issue the International Energy Agency highlighted earlier this year in its Global EV Outlook.
“The rapid increase in EV sales during the pandemic has tested the resilience of battery supply chains, and Russia’s war in Ukraine has further exacerbated the challenge,” the IEA’s report noted, adding that prices of materials like lithium, cobalt and nickel have soared.
“In May 2022, lithium prices were over seven times higher than at the start of 2021,” it added. “Unprecedented battery demand and a lack of structural investment in new supply capacity are key factors.”
In a recent interview with CNBC, the CEO of Mercedes-Benz sketched out the current state of play, as he saw it when it came to the raw materials required for EVs and their batteries.
“Raw material prices have been quite volatile in the last 12 to 18 months — some have spiked and actually some have come back down again,” Ola Kallenius said.
“But it is true as we become electric, all-electric and more and more automakers go into the electric space, there is a need to increase mining capacities and refining capacities for lithium, nickel, and some of those raw materials that are needed to produce electric cars.”
“We have everything that we need now, but we need to look into the mid to long-term and work with the mining industry here to increase capacities.”
Source: CNBC
In an exclusive interview with Daniela Cambone, billionaire philanthropist, Frank Giustra lays out his thesis for the global monetary reset already underway. We’re at the beginning of a currency war, “and I’m absolutely certain we’re heading into a global monetary system reset,” warns Frank Giustra, CEO of the Fiore Group. He tells Daniela Cambone, Russian President Vladimir Putin and Chinese President Xi Jinping, “have made it very clear they want an alternative to the U.S. dollar,” after being held hostage by the currency for so long. Predicting that the dollar will lose its status as the world’s reserve currency, Giustra says China will be victorious in its efforts to solidify a new central bank currency backed by gold. “Everybody, and I mean everybody, should own physical gold,” he says when asked about the increasing privacy issues posed by technology. “I think the pivot is around the corner, the [Fed’s] math doesn’t make any sense,” claims Giustra when asked about the rate-hike cycle currently underway for the central bank. “The Fed is trying to talk inflation and something is going to break, they’ve ruined the American dollar,” he concludes.
Source: YouTube
