NetworkNewsWire
Editorial Coverage: The dramatic rise of electric vehicles (EV)
is creating a surge in business for companies mining battery
minerals, especially for companies operating in Indonesia, one of
the world’s top producers of battery minerals.
Bolt Metals Corporation (CSE: BOLT) (OTCQB: PCRCF)
(XFRA: NXFE) (BOLT
Profile), one of the companies working in Indonesia,
recently announced a name change as it rebrands itself a leading
resource developer in this growing market. Other companies in the
surging market include BHP Group Limited (NYSE:
BHP), which has major nickel-production facilities in
Australia and sells 75% of its nickel into battery-supply chains.
Freeport-McMoRan Inc. (NYSE: FCX) has a large
operation in Indonesia producing copper, another key battery
component. The world’s largest producer of lithium,
Sociedad Quimica y Minera (NYSE: SQM) is working
to establish a focus on socially responsible mining. VALE
S.A. (NYSE: VALE), one of the world’s largest nickel
producers, recently launched a new strategy for safe expansion of
its mining operations.
- The popularity of EV is expected to create two- or three-fold
increases in demand for battery minerals over the next decade.
- Key sources of these minerals include Indonesia, home to 25% of
the world’s nickel resources.
- China has taken a leading spot in EV-battery production,
becoming a key market for these minerals.
- Indonesia is developing its own EV industry, creating new
opportunities for miners and manufacturers.
To view an infographic of this editorial, click here.
Electric Vehicles Drive Battery Metal
Market
The last decade saw several big trends in technology. One of the
most dramatic was the rise of the electric vehicle. A pipe dream of
green technologists at the start of the decade, these cars made big
leaps forward. By 2018, global EV sales had reached 2 million
units, and that number is expected to double to 4 million in 2020.
In addition, the once-lofty price of these vehicles is falling, and
their battery packs could be cheaper than equivalent
combustion-engine models as early as 2022.
This momentum is causing huge growth in the market for the
metals used in EV batteries. CRU Mobility and
Energy Futures has predicted that the EV market will need around
1.3 million tons of nickel each year by 2030, compared with
600,000 tons in 2018. Cobalt is facing a similar rise in demand,
with experts predicting a 332% increase in global supply from its
2017 levels, to 314,000 tons per annum.
Changing Brands for a Changing Market
This changing market is driving changes in the companies working
in the industry. This is reflected in the changing strategies and
branding of mining companies such as Bolt Metals
Corp. (CSE: BOLT) (OTCQB: PCRCF) (XFRA: NXFE), which
is going through a significant rebranding that included a name
change from Pacific Rim Cobalt Corp.
To outsiders, name changes like this can look like little more
than window dressing. But for observant investors, and for those on
the inside of these changes, they often represent significant
shifts in focus. While Bolt Metals isn’t dividing or merging with
another company, its name change reflects a steady shift in line
with global markets.
“Rebranding the company is an important step in our emergence as
a resource developer in Asia’s expanding electric vehicle supply
chain,” said Bolt Metals CEO Ranjeet Sundher. “The company remains
focused on acquiring and developing production-grade, battery-metal
projects within the Asia Pacific region, while employing a
vertically integrated ‘mineral‐to‐market’ strategy to leverage
these assets to their fullest.”
Bolt Metals has been moving away from its initial position as a
cobalt producer and into a broader position as a battery-cathode
material supplier. BOLT’s Cyclops mining
project in northern Indonesia reflects this, providing a rich
source of cobalt and nickel.
But it’s the mine’s location, as much as its resources, that is
creates potential for the Cyclops project, a new direction for
Bolts Metals and a reflection of bigger changes in the EV
market.
Indonesia: The New Electric Vehicle Hub?
Indonesia is richly supplied with the mineral resources that the
EV industry needs. This includes 25% of the world’s nickel reserves
as well as other metals such as cobalt. These are crucial metals in
the production of EV batteries and, therefore, in the entire supply
chain for these vehicles.
Bolt Metals’ Cyclops mining operation is designed to tap into
these rich resources. Throughout 2019, the company has been
carrying out surveys and test drilling, as well as assessing
existing records on the mineral resources at a site in Papua
Province, on the north coast of Indonesia. This intense research
has confirmed the
presence of significant high-quality deposits near ground
surface at the site. As Bolt Metals moves forward with plans for
extraction, testing and processing, the company does so secure in
the knowledge that the minerals are not only present but easily
accessible.
The richness of Indonesia’s mineral deposits isn’t the only
reason for the country’s growing prominence in the EV supply chain.
Its location on the edge of the Pacific gives Indonesia a direct
nautical transport route to Japan, a major player in developing new
technology, and even more critically to China. China is developing
its own battery industry, becoming a leader in the production of
power cells for all sorts of products. This makes both countries
hugely significant markets for EV minerals, one to which Indonesia
can easily cater.
The Indonesian government is making the most of these advantages
to actively foster its EV industry. In August last year, Indonesian
president Joko Widodo signed a decree setting
out the government’s support for Indonesian EV production. This
support includes reduced tariffs for companies importing equipment
for EV production, thereby making it easier for the industry to
grow. New regulations are creating a profitable space for companies
such as Bolt Metals.
Feeding the Chinese Battery Market
While domestic EV is critical to Indonesia’s strategy, that
doesn’t mean that the country is turning its back on the Chinese
market. On the contrary, major Chinese companies are following a
similar path to Bolts Metal, investing in the Indonesian mineral
industry to ensure the supplies they need for battery
production.
It would be hard to overstate the significance of China in the
global battery market. According to
research by Benchmark Mineral Intelligence, out of 115
lithium-ion-battery megafactories around the world, 88 are in
China. The country has positioned itself as a critical nexus in the
global technology supply chain, and while China’s power has
previously been most obvious in consumer electronics, it has also
played an important part in the rise of EV, as reflected in
deals such as the that between Tesla and Chinese
battery maker Contemporary Amperex Technology Co Ltd.
For companies operating in Indonesia, such as Bolt Metals, this
means a double opportunity in EV exists. On the one hand, there’s a
chance to become involved in the foundation of an integrated EV
market within Indonesia, in which minerals can be delivered quickly
and easily to a fast-growing market. In addition, there is an
opportunity to become involved in exporting to China, perhaps the
largest market for these minerals in the world.
With rich mineral deposits and two substantial markets, Bolt
Metals and other battery-mineral companies in Indonesia are
anticipating a bright future.
A Critical Industry
Since before the industrial revolution, mining has been a
critical industry in many parts of the world. The rise of portable
electronic goods and EV have made battery-mineral mines
particularly important, and many companies have seized the
opportunity to establish a presence in the space.
Working in various chemical business lines, Sociedad
Quimica y Minera (NYSE: SQM) has a presence in 115
countries and over $2 billion in sales. One of its key lines is the
production of lithium, a critical mineral for EV production.
The largest, lowest-cost producer in the lithium
market, SQM is an important player in the battery supply chain.
It’s also a company that takes its wider responsibilities
seriously. It recently had its certificate of
responsible conduct renewed by the Chilean Chemical Industry
Association’s Responsible Care Commission, reflecting its sound
working practices in sometimes dangerous industries.
Headquartered in Melbourne, BHP Group Limited (NYSE:
BHP) is another large, diverse resource company, working
in minerals, gas and oil. Its Nickel West arm mines, concentrates,
smelts, and refines nickel in western Australia. Over 75% of its
nickel goes towards the production of batteries. The company is
currently building a plant to produce nickel sulphate, for use in
the lithium-ion batteries that power EVs. Demand for mineral
resources created a healthy 2019 for the company, which saw its
attributable profit rise by 39%.
One of the world’s largest mining companies, VALE S.A.
(NYSE: VALE) produced 244.6
metric tons of nickel in 2018. Its nickel is extracted from
mines in Brazil, Canada, New Caledonia, and Indonesia, the latter
providing it with access to the same profitable markets as Bolt
Metals. The company faced a challenging year in 2019, thanks to an
accident at one of its mining operations, and this has given it a
renewed focus. In December, Vale announced a strategy for safe growth over the next few years,
which will help in balancing profits with safe, lasting
expansion.
Freeport-McMoRan Inc. (NYSE: FCX) also mines in
Indonesia, where it has access to one of the world’s largest copper
and gold deposits. Copper’s extensive use in renewable energy and
EV means that the company’s three Indonesian mines could become
another major source of resources for Indonesia’s EV developments,
as well as the EV battery industry around Asia and the Pacific.
With EV rising dramatically in popularity, mineral producers are
going to be kept busy supplying a growing battery industry,
creating a more sustainable future for transport.
For more information on Pacific Rim Cobalt Corp., visit Pacific Rim
Cobalt Corp. (CSE:BOLT) (OTCQB:PCRCF) (XFRA:NXFE)
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