The world is at a tipping point for mass production of low cost batteries, according to thirty one year old geologist, journalist and entrepreneur Simon Moores, who is about the embark on a World Tour discussing critical metals.
This shift will have a huge impact on the raw materials driving it including graphite, lithium and cobalt. For example, at capacity, Tesla’s Gigafactory will consume the total amount of battery grade graphite the world’s consumed in 2013. But it’s not just Tesla: LG Chem, Samsung, BYD and other battery manufactures are all planning “Giga-scale” plants – this is not a doubling of today’s battery capacity but a ten-fold increase, Moores believes.
And he knows what he’s talking about, having helped build Industrial Minerals’ focus on the lithium and graphite sectors from 2006-2014. Moores founded Benchmark Minerals in January of this year in London. Benchmark is an independent publishing business that collects pricing data on niche minerals markets, where a severe lack of information exists. They offer this data through a series of products including Membership ($1000 annually), price and production databases, Price Indices, Forecasting and Market Consultancy. To maintain independence, none of Benchmark’s employees trade any mining stocks.
I had a chance to ask Simon a few questions about Benchmark and the World Tour. What follows is an edited transcript of our conversation.
Where does Benchmark gain its Intelligence?
First hand from the players that buy and sell these minerals. Over the last 9 years, we have built up a strong networking of contacts and relationships around the world. It is this trust that allows us to collect accurate price data from the buyers and sellers of these raw materials that are non-exchange traded.
What has surprised you about your research?
That they are very different to commodities that most investors are familiar with. Metals such as iron ore, copper, coal are pretty much a logistics game whereas speciality metals such as cobalt, vanadium, graphite, and lithium is a processing game. The key in making these materials marketable is whether producers can refine and process the raw material to a high specification which changes for each end user.
Still, within the speciality minerals and metals arena, very many similarities exist such as how they are traded, processed, and how they have all experienced significant price disruption in the last decade.
The majority of these specialty minerals are for the first time experiencing new demand from new markets, batteries being the primary one.
This is causing disruption in these small industries that haven’t changed for a generation.
Why cobalt, lithium and graphite?
All of these minerals and experienced disruption over the last ten years because of the emergence of battery demand in smartphones and EVs.
Cobalt used in batteries has increased three-fold / 300% in 5 years. Today, it accounts for nearly half of all cobalt consumed yet the only discussion centres around its niche industrial uses.
Lithium has seen batteries rise from a niche market in the early 2000s to become the number of consuming market today. Battery demand has seen the lithium market grow from around 110,000 tonnes in 2009 to 150-160,000 tonnes today.
It has also been a familiar story for flake graphite, the battery grade of which almost exclusively comes from China. Exports of this material from China have increased by a CAGR of 27% from 2009-2015.
For us these raw materials are closely tied to the battery industry and have a very positive future outlook, the question is whether they will be able to supply the new battery plants coming online.
The growth for these minerals is already here. The question is how can they adapt to a hi-tech future and whether the will be enough investment into new sources and processing capacity to satisfy the new demand.
What is your business model?
Customers pay for our independent view on the market and data we collect. So we are primarily a subscription and consultancy based business.
We do offer advertising space in our quarterly magazine for those companies that want to have exposure against specific, leading, independent content.
On the same principal, we also offer sponsorship positions at our World Tour seminars.
Who should subscribe and why?
Our content is an independent take on critical minerals and metals used in disruptive technology such as EVs, smartphones, and batteries.
So we don’t write on any subject unless we believe it’s worthy of coverage.
Therefore anybody who is interested in being armed with this intelligence first, should subscribe.
We have a wide range of customers including active mining companies, juniors, financial institutions, traders, and buyers of minerals. The reasons for subscribing really vary from: investment decisions, learning latest price movements, independent opinion on major issues, or first-hand news analysis.
What do we need to know about your world tour?
The Benchmark World Tour 2015 is a series of seminars on the battery supply chain hosted in 8 cities. In each city, we will put on a free, half-day seminar outlining the entire story behind how batteries got to where they are today and where the industry is heading.
It is our belief that the world is on the verge of a form of lithium-ion revolution. This will have a significant impact on the upstream minerals and the downstream applications. Courtesy of our sponsors, this information will be given out free to increase the discussion around the world.
We are targeting major investment hubs between September and October including: London, New York, Toronto, Vancouver, Hong Kong, Tokyo, Sydney, Melbourne. There is more at: www.benchmarkminerals.com/world-tour
We will be in Toronto on Thursday 24 September and Vancouver on 1 October 2015. Everyone interested is more than welcome to attend and can do so by signing up for each individual event on our web site.