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Carmakers will have to spend big to guarantee metals supply

Carmakers will have to spend big to guarantee metals supply
June 2, 2021
Carmakers will have to spend big to guarantee metals supply

That is easier said than done. Despite their flaws and previous tendencies to throw away billions of shareholder dollars, miners are pretty good at getting the market what it wants. It can take some time – see most bull and bear markets for evidence of this – but the professionals will deliver. 

The difficulty for companies like Volkswagen is dealing with the existing players. Earlier this year, Johnson Matthey (JMAT) announced an exciting new venture for its battery cathode business, with a new plant being built in Finland.

It just has to buy its nickel from Russian Norilsk Nickel, which has a poor environmental record. The company says it does not really have a choice. 

The upcoming Britishvolt plant in Northumberland, forecast to produce 300,000 batteries a year in just six years, will have the same quandaries.

There is one thing the automotive industry could really send down the supply chain – capital, which is what the Chinese state has been doing for years. 

As well as spending big on recycling options, which would really make EVs greener, putting capital into projects could see lithium, cobalt, nickel and copper supplies keep up with demand.