Gerardo Del Real,
Editor
Jan. 6, 2022
After several days of protests, Kazakhstan President Kassym-Jomart Tokayev has “accepted” the resignation of his entire cabinet.
This after protests erupted following the price hikes of liquefied petroleum gas (LPG) used in the majority of vehicles in Kazakhstan.
Police have been killed, protestors have been killed. Russia-led alliance “peace troops” have arrived in Kazakhstan.
Bitcoin crashed and gold is back below $1,800 because Jerome Powell and team transitory said some things.
Welcome to 2022.
Last month, I explained to you that the world was changing. I explained that the electrification of everything is a trend that will be with us for decades though the outsized gains will be made early in this cycle…Like now.
It’s not a coincidence the green metals stocks are surging and it’s only going to get funner — and more profitable — from here.
Unlike 2016-2017 when money was made, but many lithium stocks got ahead of themselves, this time there is a wave of big capital that will continue to bid assets higher.
The past month has seen billions of dollars come into the lithium space as the majors are realizing that the way forward will require many more deposits of the critical metals necessary.
Rio Tinto recently stated that by 2030 EV makers will need about three million tons of lithium, cobalt, and nickel — compared with the roughly 350,000 tons they consume today.
Companies with discoveries of significance and/or companies with significant resources of graphite, lithium, uranium, copper etc will deliver some of the easiest triple-digit gains I’ve ever booked.
After protests threatened to derail Rio Tinto’s $2.4 billion Jadar lithium project in Serbia, the company decided to buy the Rincon lithium brine project in Argentina for $825 million. The project is owned by private equity group Sentient Equity Partners.
That’s over $3 billion invested between two projects by just one company in less than six months.
Tesla also announced it intends to buy natural graphite from Syrah Resources’ plant in the US.
Tesla plans to purchase 10,000 tons of graphite anode material from the company’s Vidalia processing facility in Louisiana for four years at a fixed price, once it starts commercial production.
This marks the first public graphite deal between a graphite producer and an automaker.
Meanwhile, China’s Zhejiang Huayou Cobalt has agreed to pay a total $422 million to acquire the Arcadia hard-rock lithium mine in Zimbabwe.
It was the second significant lithium move for the Chinese company in a week.
Lithium isn’t the only critical metal China is actively sourcing.
This past month, China also announced that two major rare-earth companies will collaborate in an effort to further solidify its critical metals supply chain.
China Northern Rare Earth (Group) High-Tech, a state-owned enterprise, has agreed to form a strategic partnership with Hong Kong-listed private-sector counterpart China Rare Earth Holdings.
The deal is part of a larger plan to create a new rare earth juggernaut. Minmetals Rare Earth, Chinalco Rare Earth & Metals Co, and China Southern Rare Earth Group Co. will merge into one mega rare-earth company that would be second only to China Northern Rare Earth Group in rare earths output.
China already controls 85-90% of the rare earths processing sector and the consolidation speaks to China’s desire to control pricing for the critical metals necessary for everything from electric vehicles and wind turbines… to missiles and satellites.
Two of the most consequential rare earth metals, terbium and dysprosium, are up some 50% this year.
Expect volatility, expect geopolitical tensions to increase.
And expect me to continue finding ways to profit from the uncertainty and sky-high commodity prices.
Let's get it,
Gerardo Del Real
Editor, Resource Stock Digest