• 18 hours Chinese Stocks Rebound After Regulatory Scare
  • 2 days Apple Stocks Falls After Blowout Earnings Report
  • 2 days The 5 Biggest IPO Disasters Of 2021
  • 3 days Crypto-Based ‘Shadow Financial Market’ Spooks Regulators
  • 7 days Ireland Balks At Biden’s Global Tax Plan
  • 9 days Robinhood To Trade On Nasdaq Targeting $32B Valuation
  • 13 days Facial Recognition Is Watching You
  • 14 days Biden’s $3.5T ‘Human Infrastructure’ Workaround
  • 14 days The Fed’s $3 Trillion Headache
  • 17 days Why Bitcoin Could Struggle To Recover After Epic Crash
  • 18 days Wells Fargo Back In The Spotlight Over Personal Loan Cancellations
  • 18 days Delta Variant Real Threat To Economic Recovery
  • 22 days JEDI Drama Continues With Microsoft Contract Cut
  • 24 days DiDi Shares Take a Beating From Chinese Regulators
  • 24 days Thousands Of Companies Hit In Latest Ransomware Attack
  • 25 days Jobs Report Has Big Numbers, But Still Big Problems
  • 25 days Robinhood’s ‘Mission’ Questioned in $70M Fine
  • 29 days Didi Just Went Public, And Uber Is Loving It
  • 29 days Islamic Finance On Track To Hit $3.7 Trillion
  • 31 days The Lumber Bubble Is Bursting
Chinese Panic Buying Could Fuel A Copper Rally

Chinese Panic Buying Could Fuel A Copper Rally

Copper was once again approaching…

EV Metal Index Soars To Record Heights

EV Metal Index Soars To Record Heights

The MINING.COM EV Metal Index,…

New Breakthrough Could Transform Rare Earth Mining

New Breakthrough Could Transform Rare Earth Mining

Researchers at the University of…

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 Safehaven.com:

Back to homepage

Leave a comment

Leave a comment