Now more than ever, the world needs minerals… as we transition a planet in turmoil full of eight billion people from dirty to renewable energies, there’s absolutely no way the demand for minerals does not increase. If anything, we’ll need to invent new ways to scout for minerals, which is already happening. Agencies are now using artificial intelligence to identify, map, and build out mineral supply chains.
This may not sound like much, but it’s a signal that we recognize the need to shift our supply of minerals in-house to facilitate a switch to green energy. For the first time in a while, globalism isn’t cutting it… and this means that not only will we be looking to source and process minerals in America, but this means a cornucopia of opportunity is blossoming around the space. We’ll need workers and businesses and all that goes with that to supply our need for minerals as we move forward.
Fact is, renewable energy systems are more material-intensive than those powered by fossil fuels. We’ll need plenty of them. Minerals like lithium and nickel for batteries, wind turbines, and electric motors, as well as those needed to continue the electrification of the power grid… we’re talking lots and lots of copper and aluminum. Estimates from the International Energy Agency tell us that the typical electric car is going to require six times the mineral resources of conventional cars, and offshore wind plants nine times more than their gas-powered counterparts.
The IEA is also projecting that, by 2040, mineral demand from the switch to clean energy could double, triple, or even quadruple. And we can expect to see this demand shake up the world and shift the balance of powers… see the thing is, in the past, we’ve been really concerned with which countries will have the oil and gas. Now, we play a new game… and this one is to find out who’s king of the minerals. Minerals are distributed differently around the globe than oil and gas, and we’re already seeing the shifting of the guard around these much-needed resources.
Market Opportunity
We can expect to see the global mining market reach a robust $3.35 trillion by 2026, up from $2.06 trillion this year. Both Russia and Ukraine are global producers of raw minerals, and the ongoing conflict between them has heavily impacted prices… for instance, the price of palladium increased a whopping 80% in just a few months between December of 2021 and February of this year. The general minerals market is expected to be the fastest growing through 2026.
The Biden administration is keenly aware of our heightened need for domestic mineral mining and has called for creating a U.S. supply chain to source what we’ll need to move forward. The administration is also facilitating the energy transition by approving new mines on federal land, as well as other initiatives meant to secure minerals for the U.S. and help us detach ourselves from an overreliance on supplies from overseas.
Building off a Trump policy, Biden’s administration is pushing the domestic production of a group of 50 minerals critical to our economy and national security. Currently, these are mostly mined and refined outside the U.S. What the administration would like to see happen is for America to tap into our own rich resource pools, such as Nevada’s lithium, Idaho’s cobalt, or Alaska’s graphite. Although… some have been critical of Biden and his team, asserting that the approval process is much too rigorous and takes too long.
Deals To Watch
Currently in the space, we have our eye on Sedibelo Resources Limited and Ivanhoe Electric. Sedibelo Resources Limited is involved in the exploration, development, operation, and processing of Platinum Group Metals (PGM) mineral deposits in one of the richest ore deposits on earth, the Bushveld Complex (BC) in South Africa. The St. Peter Port, Guernsey-based company is headed by Chief Executive Officer Erich Clarke and was founded in 2011 to produce platinum, palladium, and rhodium and currently sells its ore products via commodities markets, supplying an estimated 34% to 78% of global supply.
The company plans to go public with dual listings on the New York and Johannesburg Stock Exchanges, with the move being coordinated by Evercore Group, RBC Capital Markets, and J.P. Morgan Securities. The company is working on plans for expanding the PPM mine and is developing metals processing capabilities to be operational by 2025, which is where funds from the IPO will likely be funneled. An official date and an estimate of price per share have yet to be announced.
Ivanhoe Electric (IE)a, founded in 2010, is a mineral exploration company headquartered in Vancouver, Canada that owns and develops copper, gold, and other mineral and metal mining projects primarily located in the United States. The company announced plans for an IPO earlier this year, with a dual listing in the United States and Canada, and followed through in June, raising $169.1 million through the sale of almost 14.4 million shares at $11.75 each. The stock has not done well since.
According to the company, headed by billionaire Robert Friedland, proceeds are funding payments to acquire and maintain mineral and property rights, exploration activities, and construction and deployment of its Typhoon electrical pulse-powered geophysical surveying transmitter technology. Currently, the company is working on two projects, the Santa Cruz Copper Project in Arizona and the Tintic Copper-Gold Project in Utah, which they hope can deliver the metals America needs to electrify the economy and support American supply chain independence.
Will tools like AI and initiatives pushing more mining help propel us toward our goals of domestically supplied minerals? They’ll certainly help… but we’ll need more. Luckily, mineral mining and processing are currently at the forefront of conversation. With more states putting laws in place like the one in California banning the sale of gas cars, the continued rise in demand for minerals is about as sure as the sun rising. Will either of today’s highlighted companies land on my Buy List? Catch up with us in next week’s issue, we’ll keep you posted on the mad dash for minerals as it unfolds.