Commodities to watch as electric vehicle market gains traction

Analysts predict
real growth in
commodities
such as lithium,
cobalt and graphite in the
years to come thanks to
ongoing growth in fields
such as electric vehicles
and fuel cell technology.
According to Cameron
Perks, a consultant at
Industrial Minerals, prices
for lithium as well as
cobalt and graphite have
been soaring, which is
good news for the African
continent since these
resources are found in
several countries.
“Lithium in particular
is a battleground at the
moment. It can be seen in
terms of the prices that
are still at an all time high
and it looks strong going
forward,” he said.
There’s also likely to
be growing demand
for graphite, used in
battery anodes and in the
metallurgical industry.
Participating in a panel
discussion at the annual
Investing in Africa Mining
Indaba in Cape Town
recently, Perks and other
panellists, including Hanre
Rossouw, head of resources
– frontier and emerging
markets at Investec Asset
Management, and Edward
Lauer‚ head of portfolio
optimisation at Eurasian
Resources Group, agreed
that these were the exciting
commodities that would
hold their prices in the
next few years – especially
as demand for batteries
increased.
Lithium, priced at around
$7 per kilogram in June last
year, had already hit the
$20 per kilogram mark in
February this year.
Prices for cobalt, also in
high demand for batteries,
have also risen in
recent months and
are up over
50% when
compared
to the same
time last
year.
According
to Lauer,
the strength
of these
commodities
does not
lie in their
commercial
and residential use – even
though demand is strong
– but in the extended use in
industries such as electric
vehicles.
Currently these vehicles
make up less than 1% of
the total vehicle market but
this will not be the case in
years to come as they become
more accessible and more
affordable.
Perks said there were
around 350 lithium projects
active at present and he
predicted that demand for the
commodity would continue to
around 500 000 metric tons
by 2020.