Download as PDF, PPTX
Uploaded byKirill Klip
Benchmark Lithium Supply Presentation 2015 By Andrew Miller
This document discusses opportunities and risks in battery raw material markets. It notes that niche minerals like lithium, graphite and cobalt differ from commodities in that they have several grades, refined processing is key, and specifications are still developing. While industrial markets are slowing, technology markets around batteries, energy storage and electronics present major growth opportunities. However, the raw material supply chains for these niche minerals are unprepared for surging demand from new technologies. Understanding the complexities of niche mineral projects and markets will be important to take advantage of the opportunities.
More Related Content
Similar to Benchmark Lithium Supply Presentation 2015 By Andrew Miller
Benchmark Lithium Supply Presentation 2015 By Andrew Miller
- 1. Benchmark | World Tour 2015 Niche Minerals vs. Commodi;es: Opportuni;es & risks in baCery raw material markets Andrew Miller, Benchmark Mineral Intelligence, UK amiller@benchmarkminerals.com | www.benchmarkminerals.com
- 2. A new genera;on of growth markets Source: Penflip, Benchmark Mineral Intelligence 1800s 1st Industrial Revolu;on • Metallurgy • Steam power • Cement Raw materials: Coal, clay, limestone 1900s 2nd Industrial Revolu;on • Electrifica;on • Transporta;on • Chemicals Raw materials: Iron ore, petroleum 2000s 3rd Industrial Revolu;on • 3D prin;ng • Aerospace • Advanced materials • BaCeries
- 3. Global economic slowdown • Slowing growth in emerging economies • Slowing economic development limi;ng sales into tradi;onal end-‐markets • Industrial markets slowing – new lower equilibrium? A new genera9on of growth markets
- 4. Source: The Wall Street Journal • China’s economy underperforming for first ;me in a genera;on • 2015 GDP growth target lowered to 7.3% Long-‐term objec;ves remain: • Develop downstream markets • Protect domes;c resources • Secure low-‐cost resources abroad • Value-‐added economy • The materials China has needed over the past 20 years will change on the next 20 years China’s evolu9on
- 5.
- 6. Explora;on Mining Processing Trading End-‐markets Supply chain dis9nc9ons
- 7. • Explora;on commonplace in commodi;es • New for niche minerals / specialist products – since 2009 • Explora;on widening • Lithium: Argen;na, Chile, Bolivia, USA, Canada, Ireland, Mongolia, Australia + • Graphite: Canada, Australia, Mozambique, Madagascar, Sweden + • Rare earths: USA, Canada, Australia, Greenland, Mongolia + • Cobalt: USA, Canada, Russia + Explora9on
- 8. Commodi9es • Extrac;ng material in bulk • Distribu;on and logis;cs key • Large-‐scale opera;ons • Resource loca;on diverse Niche Minerals • Small opera;ons • Focus on processing • High produc;on costs • Specialist products Mining
- 9. Extrac;on Processing Separa;on & refining Distribu;on Logis;cs Source: Gapso Analy;cs, Benchmark Mineral Intelligence $ $ $ $ $ $ = Niche Minerals $ = Commodities Processing
- 10. Trading • Exchange traded • Subject to financial instruments • Markets more fluid • Short-‐term fluctua;ons • Non-‐exchange traded • Tradi;onally annual/ bi-‐ annual contrac;ng • Rigid markets • Supply-‐chain security to force moderniza;on Commodi9es Niche Minerals
- 11. Trading Price divergence • Commodi;es ;ed closely to industrial markets • Slowing growth in emerging economies paint bleak picture • China’s currency devalua;on to limit any short-‐term recovery • Several micro and macro impediments to recovery
- 12. -‐40% -‐30% -‐20% -‐10% 0% 10% 20% 30% Nickel Tin Copper Aluminium Cobalt Graphite Lithium Prices: Commodi9es vs. Niche Minerals (Jan ‘15 – Sept ’15) Source: London Metal Exchange, Benchmark Mineral Intelligence Trading • Niche minerals proving more resolute • Fortunes have become removed from tradi;onal markets • Slow turning circles, but greater upward pressure • Diverging trends already emerging
- 13. Commodi9es: • Homogenous requirements • Focus on volumes and reliable supply • Industry specs established Niche Minerals: • Several grades – differing specs • Refining process key • Specs s;ll in development End-‐markets
- 14. • Industrial markets to seCle at new lower equilibrium • Technology markets the new areas of notable growth • Evolu;on in the way we create, store, distribute and consume power • Forecasts predic;ng growth in orders of magnitude • Raw material markets under prepared for surge in demand The technology economy
- 15. Evolving industry dynamics Supply-‐chain visibility • Fear of supply disrup;on – e.g. China rare earths • The need to secure raw material supply chains reaching cri;cal level • Tradi;onal vs emerging markets • Supply chain visibility impera;ve • Pressures for sustainable sourcing
- 16. The Karooshy Price Vola;lity Curve Evolving industry dynamics
- 17.
- 18.
- 19. Differen9a9ng between the disruptors Project variables: 1. Grade 2. Loca;on 3. Infrastructure 4. Management team 5. Industry experience 6. Customer base
- 20. Differen9a9ng between the disruptors
- 21. Conclusions 1. Niche minerals differ from tradi;onal commodi;es on several levels 2. The emergence of new hi-‐tech markets will require larger volumes of refined material 3. This new supply is becoming a cri;cal issue 4. To maximise these opportuni;es, a full understanding of niche mineral complexi;es is required 5. New investment models will be needed to benefit from new growth sectors