Disruptive Discoveries Journal

What's Not Being Said Amidst the Lithium Ion Battery Hype (Hint: It's a Double Edged Sword)

Chris Berry1 Comment

By Chris Berry (@cberry1)

 

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Amid the Tesla-infused hype surrounding batteries a number of truths have become evident.

 First, battery costs are falling – fast. The overall cost of a lithium ion battery has fallen by over 90% since its commercial introduction in 1990 and the CAGR in the price decrease in recent years per kilowatt hour (kWh) is roughly 14%. Should this rate of decline continue, electric vehicles should be able to compete on total cost of ownership (TCO) with traditional internal combustion engine vehicles within five years. 

Cobalt: The Great Enabler

Chris BerryComment

Originally published on April 15, 2015

 

By Chris Berry (@cberry1)

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With an increasing amount of attention focused on metals used in technology, several issues have become clear. First, some are more important than others. Second, the amount of a metal used in an application isn’t as important as is the cost to procure it. Third, a general lack of transparency in pricing clouds the overall potential opportunities.

Given these challenges, it’s a wonder anyone would care at all about the Energy Metals, but it has become increasingly clear that the demand is there. One metal in particular which offers interesting answers to the above issues and deserves more careful study is cobalt. 

Lithium Extraction Technology: Last Best Hope or a False Dawn?

Chris BerryComment

By Chris Berry (@cberry1)

 

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As the commodities markets continue to struggle, I’ve been outspoken for some time now on the need for companies across the entire value chain to focus on ways to lower costs to remain competitive. While Selling, General, and Administrative (S,G,&A) expenses are likely the easiest places to start “cutting to the bone”, there is a limit here. Having a top tier deposit and great management team is no longer enough when you look at the supply gluts for many of the metals mentioned frequently in our regular commentary.

For an aspiring junior mining company to join the ranks of producers in the lithium space, for example, the project will either need to match or beat the financial metrics of the majors. 

Scandium International Mining Corp. Breaks Ahead of the Pack

Chris Berry1 Comment

By Chris Berry (@cberry1)

 

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Could it be that we’re starting to see some signs of life in pockets of the metals space? One such pocket involves scandium, a metal which I have written favorably on many times in recent years. The size of the global market (possibly 10 to 15 tonnes – about $40,000,000) and number of players (fewer than five) has kept investor interest at bay and really led to the chicken and egg problem I’ve discussed.

Fortunately, that may be changing. Recently, I’ve written about a few potential survival strategies for junior mining companies looking to survive what could be a few more years of sideways to down markets. These include embracing technology to lower operating expenditures or creating your own high tech value chain.

Does the Berkshire Hathaway Model Work in Energy Metals?

Chris BerryComment

By Chris Berry (@cberry1)

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If anything has become clear in the resource space in recent years, sustained value creation is hard to come by. The reasons for this are manifold. Last week I discussed the likelihood of M&A in the Energy Metals space but didn’t allude to how this is likely to happen. There are a multitude of ways for these arrangements to occur, but one in particular seems absent from the discussion. Given oversupply and the great engine of commodity demand (China) slowing, perhaps the time is right for a Berkshire Hathaway-style model in the Energy Metals space.

Is the Fed Really Out of Patience?

Chris BerryComment

By Chris Berry (@cberry1)

 

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It would appear that Chair Yellen’s press conference yesterday in the set the stage for a Fed Funds rate increase in June or September of this year. We remain unconvinced.

 It was interesting to note how financial markets reacted to the removal of a single word (patience) from the Fed’s most recent statement. The Dow, gold, and oil all roared higher and seemingly (for the moment anyway) forgot about the increasingly disappointing economic data in the US including housing starts, retail sales, and industrial production. Export growth also slowed, and you can thank the strong US Dollar for that.