The Metals for Your EV Are Stuck in a 30-Mile Traffic Jam
Comment of the Day

November 04 2022

Commentary by Eoin Treacy

The Metals for Your EV Are Stuck in a 30-Mile Traffic Jam

This article from Bloomberg may be of interest to subscribers. Here is a section: 

Zambia, too, has ambitious expansion plans. The region could add nearly 1 million tons of annual copper production over the next decade, according to Adam Khan, copper supply analyst at CRU Group, and others are more optimistic still.

“Copper is the new oil,” Zambian Finance Minister Situmbeko Musokotwane said in an interview. “This is a very good opportunity for us.”

There’s no doubt that the region’s copper will be needed. To meet the global target of net-zero by 2050, the world may need to double supplies of what S&P Global calls “the metal of electrification.” “The green-energy transition is the biggest purchase order in history for the commodities industry,” said Benedikt Sobotka, chief executive officer of miner Eurasian Resources Group.

To be sure, logistics are not the only impediment. Corruption is rife, and disputes with governments are common. One of the largest copper and cobalt mines, Tenke Fungurume, hasn’t been allowed to export any material since July because of a dispute between its owner CMOC Group and Congolese state mining company Gecamines.

Eoin Treacy's view

The COP27 Conference opened in Egypt today and the number of articles highlighting the plight of climate affected populations both domestically and internationally has increased significantly over the last week. The above article focuses on the supply issues of transporting resources to the coast and the additional challenge posed by the plans to increase supply before infrastructure has been built. Meanwhile Glencore was fined £281 million for bribing officials in Africa. Never mind that it is impossible to do business in the region without local partners.

Difficulties with metal supply chains are already changing battery chemistry economics. LFP (Lithium iron phosphate) batteries are already the predominant market in China. They offer more safety, last longer and charge faster. The downside is they have less range and don’t do well in the cold. The primary benefit is they do not require either nickel or cobalt.

However, until prices come down enough to make these models more attractive than a conventional internal combustion engine car, most consumers will be reluctant to migrate. Governments, focusing on emissions and energy independence, like the UK, remain eager to force migration through tariffs on city driving.

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