Global Energy Metals (TSX.V) has widened its scope to maximise its exposure to the rapidly-growing battery metals sector.
Speaking exclusively to MiningMaven, the Canadian explorer and developer’s chief executive Mitchell Smith said that the trend toward green technology is accelerating at a faster pace than ever. And the biggest driver by far is the electric vehicle (“EV”) boom.
Pick any forecast, and it will paint a picture of a not-too-distant future where roads around the world are lined with these fossil-fuel-free automobiles. For example, Bloomberg New Energy Finance expects 500 million EVs to be in use by 2040. Even OPEC foresees a global fleet of roughly 320 million of the vehicles by this point.
But to get to this stage, a lot of money needs to be spent.
The UK’s RhoMotion recently suggested that global investment in the EV supply chain will be well more than USD$1 trillion. Meanwhile, Bloomberg expects automakers to invest some US$300 billion over the next five to ten years on EV development and production.
A major part of this expense will arise from the purchase of the raw materials that are needed to create these EVs. And digging even deeper, the most sought-after part of this will be metals like nickel, cobalt, and copper used to create the electric batteries that power these automobiles.
Currently, there is an over-reliance on unstable, third-world jurisdictions when it comes to sourcing these battery metals.
Take cobalt as an example.
This metal is critical to many EV batteries. However, its supply is often limited and disrupted as a result of a considerable over-reliance on mining in DRC – an African country rife with political instability and human rights violations.
The dire need for reliable sources of battery metals in safe, pro-mining jurisdictions as the EV revolution continues to increase is becoming increasingly apparent.
As Smith put it to us: “Supply chains need to be diversified into jurisdictionally safe parts of the world. Places like Australia, or like North America, or parts of Europe that have materials that can be produced. We cannot over-rely on one area, especially one that isn’t stable.”
Today, the companies and people in power are starting to take action.
Global carmakers from early-stage startups to automobile giants like Volkswagen, Ford, BYD, Toyota, and Tesla are all beginning to lock in supplies of raw materials needed to produce their lithium-ion batteries. Meanwhile, first-world countries are placing more and more strategic importance on controlling and building a shorter, localized supply chain of battery minerals.
Look at the U.S and Canada as examples.
The governments of both countries have placed several minerals deemed essential to the growth of the battery metals as critical and are working together to develop and implement a critical minerals strategy.
At the end of September, President Trump even put into effect an Executive Order requiring the Secretary of the Interior to identify critical minerals and making it policy to reduce US vulnerability around critical mineral supply disruptions.
“A strong America cannot be dependent on imports from foreign adversaries for the critical minerals that are increasingly necessary to maintain our economic and military strength in the 21st century,” he said at the time.
This, Smith tells us, is exactly where Global Energy is positioning itself.
“We are true believers in electrification, and we think that it's one of the biggest investment opportunities of the generation. We want to be here to be a part of that in the biggest way possible, and to be able to maximize that exposure. Our focus is on the supply chain for battery metals like cobalt, nickel, and copper because that is really the foundation upon which this path to electrification and new energy storage is based.”
In the past few months, the firm has taken two major steps to maximise its exposure to battery metals and the need for simple and safe supply chains in first-world jurisdiction.
First, in July, the company announced the sale of a portfolio of royalty interests on its Australian cobalt assets to Electric Royalties in exchange for a stake in the business.
In doing so, it retains exposure to the enormous potential on offer at its Millenium Cobalt Project and two neighbouring exploration-stage cobalt assets in Mt.Isa. However, the firm and its investors also gain exposure to Electric Royalties’ strong and diversified energy mineral asset royalty portfolio.
“Electric Royalties has a much wider, diverse portfolio of assets that we also get added benefit from including lithium, vanadium, manganese, and graphite. These will all benefit from the electrification trend, so I think that having that exposure is really important,” Smith tells us.
A map of Global Energy's portfolio of projects around the world
Second, earlier this week, Global Energy announced that it had established a new wholly-owned U.S subsidiary called U.S Battery Metals Corporation.
This gives the company a strong presence in the country at a time when the sourcing of a localized critical battery metals supply chain has become essential to the future of the EV industry and is on the forefront of national, political, and economic agendas.
Global Energy’s first port of call was to place its Lovelock Mine and Treasure Box projects into this new vehicle. The firm recently increased its interest in these two highly prospective, Nevada-based exploration properties to 85% after work confirmed their prospectivity for nickel, copper, and cobalt.
“This increased stake further establishes our very strong footprint in Nevada, which is one of the world's best jurisdictions in which to do mining. It really gives us a chance to build on historic work, and prospective work we have already one to unlock some value through exploration,” adds Smith.
Author: Daniel Flynn
The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.
MiningMaven Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance