Demand for electric vehicles to grow over coming decades
‘We will not stop until every car on the road is electric,’ – Tesla founder and chief executive Elon Musk.
The electric car market will move from early deployment to mass market adoption over the next ten to 20 years. A total of 750,000 new electric vehicles (EVs) were registered worldwide in 2016, when the global stock of EVs surpassed two million for the first time. The US accounted for the largest portion of global EV stock until 2015, when China surpassed it with about a third of the global total.
Some countries have already emerged as leaders in the EV space. Norway had the highest global market share in electric vehicles in 2016, while China was the fastest growing market.
That global stock is forecast to rise to between nine million and 20 million by 2020, up to a ten-fold increase from current levels, and between 40 million and 70 million by 2025, according to the International Energy Agency (IEA).
Electrification to place demand on global electricity networks
The move toward EVs, as well as electrification of other transport, is set to place pressure on electricity generation around the world. However, the IEA believes the additional electricity needed to power the rise in EV demand is ‘sizeable but largely manageable’.
The IEA forecasts EVs and plug-in hybrid electric vehicles (PHEVs) will consume just 1.5% of total electricity demand by 2030, representing growth of just 6% from present levels. This is mainly because of larger lifts in demand for electricity from industry, commercial and residential sectors over the same period.
Transition to renewable energy to spur demand for battery storage
Although renewable energy is generating more of the world’s electricity than ever before, it still only accounts for about 8% of global electricity generation, according to oil major BP. However, renewable sources account for a major chunk of new electricity generation coming online, with around 40% of all new power generation capacity around the world made up of renewable sources such as solar, wind, hydro, geothermal and renewable waste, like biomass.
Renewable energy still suffers from one major downfall over than the likes of gas or nuclear power. Harnessing power generated by the likes of wind or solar has still not been mastered, and unless the power is used as soon as it is generated much of it is currently wasted. This also means renewable energy sources can be intermittent, unable to produce power when the wind isn’t blowing or the sun isn’t shining.
This has spurred on the development of energy storage, with many companies, big and small, creating batteries that will allow renewable energy sources to reach their full potential.
What companies are developing energy storage solutions like batteries?
There are plenty of companies developing energy storage solutions, some as a side activity and some as a core focus, and investors have a choice between big existing players and smaller stocks.
Big players developing energy storage solutions include the likes of Tesla, SunPower, SolarEdge Technologies, Sunrun, E.ON, EDF Energy, Lockheed Martin, National Grid, FirstEnergy and Panasonic.
Smaller players that investors can consider are Redt Energy, Good Energy and Bushveld Minerals.
Electric vehicles and energy storage batteries: what metals are needed?
Copper, already an important metal for numerous industries, is touted as the primary metal to see a jump in demand as a result of higher demand for batteries in the future. The other three metals that will also be key are lithium, nickel and cobalt, with other metals that will be needed including graphite, manganese and vanadium.
Let’s take a look at those four crucial metals, the current supply and demand, where they are produced, and what companies are mining them.
What countries produce the most copper?
Chile has long been the biggest producer of copper in the world, producing more than double than the second biggest producing nation, Peru. However, the amount of copper coming out Chile has declined annually since 2013, according to Statista, while output from Peru has been steadily rising.
The vast majority is consumed by end markets in Asia, where 69% of refined copper ended up in 2016. End markets in Europe consumed 18% of the world’s refined copper that year, followed by North America at 10%, Latin America at 2%, Africa at 1%, with the balance consumed in Oceania.
What companies produce copper?
There are a swathe of big miners that have copper in their portfolio, such as BHP Billiton, Anglo American, Rio Tinto, Glencore, Freeport-McMoRan, Southern Copper, Vedanta Resources, Antofagasta, KAZ Minerals.
Smaller players with copper assets include Anglo Asian Mining, Georgian Mining, Ortac Resources, Strategic Minerals and SolGold.
Currently, the construction industry is the largest consumer of copper in the world, accounting for 44% of total consumption in 2016. Transportation consumed 19% of global refined copper, followed by electric and electronic products at 18%, consumer and general products at 12%, and industrial machinery and equipment at 7%.
What countries produce the most lithium?
Australia has been the largest producer of lithium since 2013, with output climbing annually every year since. Production saw a particular spike in 2016, after surging 30% from the year before. Lithium output in Chile rose by over 17% year by year in 2016, while Argentina has also seen a healthy level of growth over the past four years.
More: lithium rise to persist as electric vehicles take to the air
There are four main types of deposits that producers source lithium from. The vast majority of global production comes from brine deposits, accounting for 63%, followed by hard rock deposits producing 32% of global lithium in 2016. About 3% comes from soft rock deposits, while 2% comes from geothermal deposits.
Read more: lithium and the new technology
What companies produce lithium?
The larger companies involved in lithium production include SQM, Albemarle, FMC and Lithium Americas.
Smaller producers inclide Orocobre, Galaxy Resources, Neometals, Kodal Minerals, IronRidge Resources, and Bacanora Minerals.
Watch: Bacanora CEO Peter Secker on how Asian demand for battery metals boosts prospects
There is already a substantial demand for lithium in traditional battery markets, used for the likes of smartphones and electronic devices (for example). Batteries consumed 29% of all lithium in 2016, while 27% was used to create glass and ceramics. Industrial greases consumed 12% of global lithium that year, followed by air treatment at 5% and polymer and medical uses each accounting for 4% of global consumption.
What countries produce the most cobalt?
Worldwide cobalt production is currently heavily concentrated in the Democratic Republic (DR) of Congo, which currently produces about ten times more cobalt than any other country. Although cobalt output dipped in DR Congo in 2017, production was still about one million tonnes higher than back in 2013.
There has not been any notable growth in output from any country over recent years, but the likes of the Philippines and Papua New Guinea have only been producing notable levels of the metal since 2016.
Cobalt has historically been produced as a by-product by miners rather than a primary material. The metal is often associated with the likes of copper and nickel. Only 2% of global production came from operations primarily mining cobalt, while 38% was produced as a by-product of nickel and 60% as a by-product of copper.
What companies produce cobalt?
Big names in the cobalt space include Glencore and Vale.
There are many smaller players involved in cobalt, including China Molybdenum, Transition Metals, Royal Nickel, First Quantum Minerals, Katanga Mining, Amur Minerals, Regency Mines, African Battery Metals, Aura Energy, Strategic Minerals, Sula Iron & Gold and Alexander Mining.
Lithium-ion batteries is the biggest end market for cobalt at present, responsible for 49% of total consumption in 2016. Manufacturing of super alloys consumed 18%, hard metals 8%, ceramics 6%, catalysts 5%, wear products 4%, rubber additives 4% and magnets 3%.
What countries produce the most nickel?
The Philippines may be the single biggest producer of nickel, but output has been declining in recent years after the government ordered multiple mines to shut down by early 2017 for breaching laws and regulations.
Nickel is produced from two types of deposits. In 2016, 62% of global nickel production came from laterite deposits with the other 38% coming from sulphide deposits.
Read more: electric vehicle growth is driving nickel prices
Based on the values of imports, China is the single biggest consumer of nickel, having accounted for 23% of global consumption in 2016, followed by the US at 9%. Other major consumers included Japan at 8%, the Netherlands at 6%, Germany at 6%, and the UK at 5%.
What companies produce nickel?
Major miners of nickel include Norlisk Nickel, Vale, BHP Billiton, Anglo American, Eramet, Jinchuan Group, Sherritt International and Sumitomo Metal Mining. Smaller miners include Cadence Minerals, RHI Magnesita and URU Metals.
The primary use for nickel in 2016 was in the creation of stainless and alloy steel products, accounting for 68% of consumption. Other major end markets that year included non-ferrous and super alloy manufacturing consuming 16% of global nickel, followed by electroplating at 9%, casting at 3%, while batteries consumed just 3%.