Battery Metals rebound

Date: Jan 22, 2019

Battery materials, including cobalt, lithium, nickel and copper, have been the most compelling ‘good news’ story in mining for the past four years, but 2018 will likely be remembered as the year when that enthusiasm faced its first real test.

Cobalt, for one,  hit almost $100,000 a tonne,  but then came under serious pressure in the second half of the year as demand failed to match some of the more optimistic projects and a wave of new supply, induced by higher prices, is looming on the horizon.

It has been a similar story in lithium, where new projects are being developed from Australia to South America, prompting price declines of more than 50% from their peak in late 2017.

White & Case survey’s results, however, show the industry sees most of these metals rebounding this year, particularly lithium and copper, with 43% of respondents selecting the industrial red metal as their top pick.

Faith in coal will be shaken further this year, the survey reveals, with more than 50% of senior executives predicting that the commodity will be the most impacted one by China’s continued polices to reduce air pollution. Rio Tinto has sold all its coal mines, while BHP and Anglo American have said the fuel will struggle to compete for capital against commodities such as copper.

New entrants to the market are also constrained as banks and investors become warier of funding coal projects, even though the commodity remains the second-largest global source of primary energy, behind oil, according to the International Energy Agency (IEA).

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