The boost in the demand for electric vehicle (EV) is benefitting the mining sector, Mining.com reported. As consumers transition from gas-powered vehicles to EVs, the industrial market for certain types of metals as raw materials for batteries also increases. Several mining companies are starting to benefit from the trend.
EV dominance by 2040
But before heading into the mining industry, the electric-vehicle industry may have a bright tomorrow as according to National Geographic, more and more people might use EVs by 2040 as 90 percent of gas-powered vehicles in the U.S., Europe, and other developed countries are gradually replaced.
If this happens, the global consumption of oil could receive a daily reduction of 21 billion barrels and also significantly trim down carbon dioxide emissions per year by at least 3.2 billion tons.
Nickel, lead and lithium are the most common raw materials for manufacturing EV batteries. Orocobre Ltd. is one of the mining companies that recently reported an increase in its revenues. The company is focused on lithium and borax. In December last year, it reported an increase of 11 percent in its net income. It also forecasted that prices of lithium will rise further.
Other miners from the U.S. and Australia such as FMC Corp and Mineral Resources Ltd. also posted significant revenue increase and higher trading volumes in their stocks.
More gainers include Mineral Resources, FMC, and Galaxy Resources, Ltd. as they reported recent revenue jumps of 16 percent, 30 percent and 60 percent, respectively. Investors are bullish about the long-term future prospects of metals used for manufacturing batteries.
Rising industrial demand
According to Orocobre CEO Richard Seville, all the mining companies will increase the contract pricing with car producers this year. The rise in the global demand for metals as raw materials is driving the prices up. The car manufacturers are now investing heavily in lithium in anticipation of the EV boom. Currently, all car manufacturers do not have long-term contracts with lithium miners, creating competition among the manufacturers that can be taken advantage by the mining firms.
Governments of developing economies like China are also driving up the prices of lithium and other metals for batteries, per The Irish Times. Carmakers like Volkswagen and Tesla are racing to corner the market for EVs. They want to have some advantage in terms of the supplies of the needed raw materials.
As an emerging globally powerful economy, China will be one of the biggest consumers of lithium. Goldman Sachs predicts that China could become the biggest supplier of electric vehicles in the world with a forecast of as much as 60 percent by the year 2030. The country supplied 45 percent of EVs to the global market in 2016.
Ramping up production
With such forecast, the mining sector responded by increasing production. Lithium miners like Albemarle Corp. and Sociedad Quimica y Minera de Chile SA are now making extra efforts to supply the industrial demand. The average global price of the metal rose by nine percent in the past month.
The TopRanked.io Weekly Digest: What’s Hot in Affiliate Marketing [uMobix Affiliate Program Review]
This week, we're covering everything from hustle culture to spying on kids, making this affiliate digest look like it has...
Stanford University Returns Millions from FTX
Between November 2021 and May 2022, Bankman directed donations of more than €5.5 million from FTX Group to Stanford University....
Biova Project Launched an Equity Crowdfunding Campaign on Mamacrowd
Biova Project makes deals with players in large-scale distribution and production to recover, store, and transform unsold food, or food...
Novo Nordisk Plans to Open a Tech Headquarters in Spain
Novo Nordisk increased its profit by 42.5% in the first half of 2023, reaching 39,242 million Danish crowns (€5.26 million)....
Immorente Invest Maintains its Financial Stability
Although the occupancy rate has fallen from 92% to 90.2% compared with the end of 2022, the company expects this...
Biotech1 week ago
Asabys Partners Leads a €14 Million Round in Gradient Denervation
Markets2 weeks ago
Markets Are Looking Iffy, but That’s Seasonal
Biotech5 days ago
Vertex Obtains EMA Validation to Expand Indications for Kaftrio
Crowdfunding2 weeks ago
58 Crowdinvesting Platforms Authorized Under the New Regulation in Europe