• 15 hours S&P 500 Officially In An Earnings Recession
  • 19 hours Miners Are Weathering The Trade War Storm
  • 22 hours UK Credit Card Interest Rates Are Skyrocketing
  • 2 days From Frenzy To Flop, The Death Of This Year’s Most Hyped IPO
  • 2 days Are Smart TVs Spying On Us?
  • 2 days Is Fossil Fuel Divestment A Waste Of Time?
  • 3 days A Russian Billionaire’s Space Quest To Save Humanity
  • 3 days Markets Take Breather As Consolidation Continues
  • 3 days Economic Woes Weigh On Copper Prices
  • 3 days World's Largest IPO At Risk Following Drone Strikes
  • 4 days Gold Is Beating Buffett’s Berkshire Hathaway
  • 4 days What’s Behind The Silver Sell-Off?
  • 4 days The Retail Apocalypse Is Accelerating
  • 4 days The Top Tech Stocks Of The Year
  • 5 days America’s Workforce Elderly Workforce To Double By 2028
  • 5 days Toyota Tests Solar-Powered Prius
  • 6 days Why The Gold Rally Flatlined
  • 6 days The Uranium Sector Can’t Catch A Break
  • 7 days Upcoming Fed Meeting Has Investors On Edge
  • 7 days Global Gold Sector Outlines Responsible Mining Principles
Are Copper Naysayers Missing The Big Picture?

Are Copper Naysayers Missing The Big Picture?

The price of copper came…

Protests Threaten $5 Billion Peruvian Copper Mine

Protests Threaten $5 Billion Peruvian Copper Mine

Ongoing anti-mining protests in Peru…

Miners Are Weathering The Trade War Storm

Miners Are Weathering The Trade War Storm

While overall Chinese trade is…

Mining.com

Mining.com

Mining.com

MINING.com is a web-based global mining publication focusing on news and commentary about mining and mineral exploration. The site is a one-stop-shop for mining industry…

Contact Author

  1. Home
  2. Commodities
  3. Industrial Metals

Lack Of Funding Could Lead To Battery Metal Supply Shortage

Battery

In the second quarter this year, cobalt and lithium prices dropped to the lowest point in more than two years, driven by short-term oversupply which is taking longer than anticipated to correct.

Mining Intelligence analysed the effect of the lithium and cobalt price decline and the flow of investments into exploration campaigns and development programs.

Both indicators suggest that future supplies of primary battery metals required to meet rising demand from EV manufacturers and other industries will not be met if the market stays in a slump.

The Mining Intelligence Data Application reveals that in Q2 2019, drilling activities focused on exploration and resource evaluation of lithium and cobalt deposits, dropped to the lowest level in two years. Number of completed drillholes dwindled by more than 50% from the peak reached during Q3 2018.

Companies reacted quickly to the deteriorating market conditions and curtailed drilling operatively to prevent excessive cash burn.

(Click to enlarge)

Another important indicator is capital raisings, which is a barometer of investor confidence. The amount of capital raised through equity placement reflects the sentiment in the mining industry, as this capital is the main source of liquidity to finance exploration and development activities by juniors and emerging producers.  Related: Space Crime And Scandal Overshadow SpaceX Failure

This indicator shows that investors lost confidence in battery metal sector. In Q2 2019, capital raised on stock exchanges by lithium and cobalt players dropped sharply from the stunning $801 million raised in Q2 2018 to a record-low level of $34 million in Q2 2019.

(Click to enlarge)

Despite recent softness in the lithium and cobalt markets, an industry consensus is that long-term demand fundamentals are strong. Projected lithium demand will grow approximately ten-fold by 2031 from the current level (Figure 3).

Though miners will have to increase drilling activities soon to keep pace with demand, there is no indication of that on the horizon. 

(Click to enlarge)

By Mining.com

More Top Reads From conil.me:

Back to homepage

Leave a comment

Leave a comment