University of Technhology Sydney did an analysis of commodities used in the renewable energy (incl. EVs etc). It was a really good mapping of supply, demand, and pricing across the commodities looking at future demand. By articulating where the supply constraints are, one can then start to dig into which companies are the best plays in those commodities. The regulars of cobalt, copper, lithium ,rare earths (neodymium) and nickel came up to varying degrees.

Electric Vehicles - 60% of sales by 2030?

According to an article in the AFR this morning, BHP has a much more aggressive forecast on sales of electric vehicles than 12 months ago, which led it to the bid for Oz Minerals. If BHP’s forecast turns out to be correct this will bring forward a strong demand for all electrification minerals including, copper, nickel, lithium, cobalt, graphite and rare earths.

Nickel Industries (NIC) has been forecasting a shortage of battery nickel from 2026 (see charts below).

The following is a direct quote from the AFR:

“This time last year, BHP was forecasting 25 per cent of global vehicle sales in 2030 would be electric vehicles. It now expects 60 per cent of vehicle sales in eight years will be electric, rising to 80 per cent by 2035 and 90 per cent by 2040.

Just over 4 per cent of global vehicle sales were electric in 2020 with about 87 per cent of those sales in China or Europe.

BHP now expects the proportion of electric vehicles within the global light vehicle fleet to be 45 per cent by 2035; a massive rise on the 17 per cent that BHP was forecasting as recently as February 2021.

If BHP’s upgraded electric vehicle forecasts are proved correct, a surge in demand for the metals linked to decarbonisation and electrification – copper, nickel, lithium, cobalt, graphite and rare earths – will likely emerge sooner.”

and from Nickel Industries BMO presentation (2022):

Disc: shares held in BHP and NIC

Would be interested to hear people's thoughts on graphite plays in the tailwind behind lithium battery tech. What companies are people investing in if you are invested in graphite? Read an interesting opinion piece on AFR today in regards to this. Here is the link if you want to have a read.

EDIT: Anyone specifically following LEL and what do they think about the Queensland Burke Graphite Project?

Great post @CHill.

I also wanted to make the note that the aftermath of this new EV/LIB world with recycling will be super important for investors too and now presents a good time to get in while the market is quite new. This was an article I read back in January of this year looking into 14 of the LIB Recycling Projects to watch out for. Some of these projects are collaborative efforts between multiple companies or institutions. The 14 projects were:

• American Battery Technology: As part of this company's focus on mining, extracting, and recycling lithium and other battery materials, it plans to open a battery-metals recycling plant in Incline Village, Nev., with an eventual capacity of 20,000 metric tons of scrap materials and end-of-life batteries per year.
• Battery Resourcers: This Worcester, Mass., startup, a spin-off of Worcester Polytechnic Institute, is focused on making new cathode powders for lithium-ion batteries from postindustrial scrap.
• Brunp Recycling Technology Co.: A subsidiary of the leading Li-ion battery maker CATL, Brunp is the largest recycler of those batteries in Asia (and therefore the world). Its new plant in China's Hunan province reportedly can recycle 100,000 metric tons of lithium-ion battery scrap per year.
• Ganfeng Lithium: The Chinese Li-ion battery maker plans to build a battery-recycling plant in Mexico, to sell minerals to electric-vehicle makers and suppliers, including Tesla and South Korea's LG Chem.
• Green Li-ion: The Singapore startup will open its second recycling plant in early 2021, which focuses on recycling Li-ion battery cathodes that are “99.9 percent pure."
• Li-Cycle: Later this year, the Canadian firm will begin constructing a US $175 million recycling plant in Rochester, N.Y. When finished it will be North America's largest Li-ion–battery resource-recovery facility.
• Northvolt: This Swedish battery startup, founded by former Tesla executives in 2016, already has an experimental recycling plant up and running and, with aluminum company Hydro, plans to open an 8,000-metric-ton-per-year recycling plant in Norway this year.
• Primobius: This joint venture of Australia's Neometals and Germany's SMS Group will demonstrate Neometal's proprietary recycling method with plans to scale up commercially in Europe.
• ReCell Center: Funded through a 3-year, $15 million grant from the U.S. Department of Energy's Vehicle Technologies Office, this research center is focused on longer-term methods such as direct cathode recycling.
• Redwood Materials: Cofounded in 2017 by former Tesla CTO J.B. Straubel, the Carson, Nev., startup has positioned itself as a raw-materials supplier and will recycle electronic waste generally. It's among five initial recipients from Amazon's $2 billion Climate Pledge Fund.
• ReLIB: Comparable to the U.S. ReCell Center, this R&D collaboration based at the Faraday Institution in Birmingham, England, is focused on improving the efficiency of EV battery recycling in the United Kingdom.
• SMCC Recycling: A joint venture of South Korea's SungEel HiTech Co., a battery recycler, and Metallica Commodities Corp., the company plans to open an “environmentally friendly" 5,000-metric-ton Li-ion recycling plant in Endicott, N.Y.
• Tesla: For the past couple of years, Elon Musk has hinted that the EV maker will recycle its own batteries. Now it has reportedly begun doing so in China, where phase 2 of its Shanghai Gigafactory is wrapping up.
• Umicore: A leading materials recycler with 11,000 employees worldwide, Umicore has since 2017 focused on “clean mobility," including the recycling of all components of electric vehicles. Its Hoboken, Belgium, plant can handle 7,000 metric tons of Li-ion batteries a year.

A very interesting sector to keep and eye on. I believe there will be 4 or 5 main players in the end with definitely enough business to go around. At the moment it's about showing that your technology is better, more efficient, and more cost effective than the competitors. It will be companies that continue to put money into R&D and are continually able to innovate that will be left standing as the one of the top players. Primobius is on the list - the joint venture between Neometals and Germany's SMS Group. I believe the Primobius JV is one of the best candidates to become one of the larger players. The other projects that are really looking great from the list are American Battery Technology, Brunp Recycling Technology, Li-Cycle, Northvolt, SMCC Recycling, and Umicore. Some of the main metrics to look out for are capacity, or the amount they can recycle in a year, and output purity. Would love to hear others thoughts on this area of the EV and LIB market and which companies you have on your radar that are doing great work in this field. I think it's going to be an important part of civilization moving towards a greener and more electric future.

DISC: am a current holder of NMT.