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.
By Chris Berry (@cberry1)
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Given the importance of copper as a proxy for global economic growth, the recent rebound in the metal may indicate signs of a bottom. The chart below shows the recent price performance with copper up 18% from its low earlier this year of $2.45 per pound.
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.
By Chris Berry (@cberry1)
For a PDF version of this note, please click here.
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.