Global EV sales increased a massive 109% for the first half of 2021 year on year– from 1.99 million units to 4.16 million units.
According to a study by Adamas Intelligence, US EV sales alone increased 135% for the period, so it should come as no surprise that policy makers echoed Elon Musk’s 2020 plea to ‘mine more nickel’ and added the key battery metal to its updated list of critical minerals this week.
The announcement has again shone the spotlight on the massive potential upside for those savvy investors backing the right players in Australia’s battery metals sector.
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EV batteries and their components are as varied as the companies that produce them. And the renewed focus on battery ingredients ignores the soaring demand for rare earths such as neodymium and praseodymium (together, NdPr) and dysprosium that are needed in the permanent magnets within the EVs, nor the copper required for electrical wiring.
In the EV battery world, the lithium-ion battery is by far the most common – consisting primarily of lithium, nickel and cobalt.
When quantifying the battery metals on roads around the globe, based on all data measured, Adamas determined that the ‘average battery’ contains 15.8kg lithium carbon equivalent (LCE), 14.1kg nickel and 3kg of cobalt.
Globally in H1 2021, 65,700 tonnes of LCE, built into vehicles, left EV factories – a 155% increase year over year reflecting the huge increase in unit sales, but also a massive 23% average increase in lithium required per unit.
For Core Lithium (ASX: CXO) investors, this is one more feather in the cap. In October, the company commenced construction at the Finniss lithium project in the Northern Territory. It has secured offtakes for 80% of the 175kt lithium spodumene output to partners including Yahua – a key lithium supplier to Tesla. With first production planned for Q4 2022, Core has timed its entry to the market perfectly.
A whopping 58,900 tons of nickel was deployed on roads globally in H1 2021, 115% more than in H1 2020 – in line with the jump in EV sales, and a 3% increase based on increased battery size.
St George Mining (ASX: SGQ) and Lykos Metals (ASX: LYK) have heeded Mr Musk’s call and are actively looking for nickel both at home in WA and abroad.
St George has kept the drill bit spinning throughout the year at the Mt Alexander project in WA. The latest diamond drill program commenced in October, testing the deeper nickel-copper sulphide targets at the West End and Investigators prospects, and investors eagerly await assays.
Since its ASX listing last month, Lykos Metals has completed its first-pass soil sampling program at the Sockovac project in Bosnia-Herzegovina, identifying two nickel-cobalt anomalies, and has also secured a second license at the project. The company plans to twin historic holes from the late 1960s that showed high-grade mineralised intercepts of up to 15% nickel, 3% copper and 10% zinc.
There is also 115% more cobalt on the roads for H1 2021 year-on-year. Cobalt has a spotted history, tied to cases of human rights abuses in Democratic Republic of Congo. This has caused EV manufacturers to look for alternate sources, and even alternate metals.
But despite this, the average EV battery has 3% more cobalt than the corresponding period.
This has opened another door to Australian producers that can ethically source the metal, and Lykos’ soil sampling program at Sockovac confirmed two coherent nickel and cobalt anomalisms at the project.