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The Bull Case for Energy Metals Going into 2019

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The Bull Case for Every Energy Metal Going into 2019

The Bull Case for Every Energy Metal Going into 2019

The rapid emergence of the world’s renewable energy sector is helping set the stage for a commodity boom.

While oil has traditionally been the most interesting commodity to investors in the past, the green energy sector is reliant on the unique electrical and physical properties of many different metals to work optimally.

To build more renewable capacity and to store that energy efficiently, we will need to increase the available supply for these specific raw materials, or face higher costs for each material.

Metal Bull Cases

Ahead of Cambridge House’s annual Vancouver Resource Investment Conference on January 20-21, 2019, we thought it would be prudent to highlight the “bull case” for relevant metals as we start the year.

It’s important to recognize that the commodity market is often cyclical and dependent on a multitude of factors, and that the above cases are not meant to be predictive in any sense.

In other words, the facts and arguments above sum up what we think investors may see as the most compelling stories for these metals – but what actually happens in the market, especially in the short-term, may be different.

Overarching Trends

While we highlight 12 minerals ranging from copper to lithium, most of the raw materials in the infographic fit into four overarching, big-picture stories that will drive the future of green energy:

StorySupporting Projection
Solar and WindThe world hit 1 TW of wind and solar generation capacity in 2018. The second TW will be up and running by 2023, and will cost 46% less than the first.
Electric VehiclesOwnership of electric vehicles will increase by 40x in the next 13 years, reaching 125 million vehicles in 2030.
Energy StorageThe global market for energy storage is rapidly growing, and will leap from $194 billion to $296 billion between 2017-2024.
Nuclear150 nuclear reactors with a total gross capacity of about 160,000 MW are on order or planned, and about 300 more are proposed – mostly in Asia.

Which of these stories has the most potential as a catalyst for driving the entire sector?

Based on these narratives, and the individual bull cases above, which metal has the most individual potential?

Let us know in the comments below, or visit Booth #1228 at #VRIC19.

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Base Metals

20 Common Metal Alloys and What They’re Made Of

You can’t find stainless steel, brass, sterling silver, or white gold on the periodic table. Learn about 20 common metal alloys, and what they are made from.

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Every day, you’re likely to encounter metals that cannot be found anywhere on the periodic table.

You may play a brass instrument while wearing a white gold necklace – or maybe you cook with a cast iron skillet and store your leftovers in a stainless steel refrigerator.

It’s likely that you know these common metal alloys by name, and you can probably even imagine what they look and feel like. But do you know what base metals these alloys are made of, exactly?

Common Metal Alloys

Today’s infographic comes to us from Alan’s Factory Outlet, and it breaks down metal and non-metal components that go into popular metal alloys.

In total, 20 alloys are highlighted, and they range from household names (i.e. bronze, sterling silver) to lesser-known metals that are crucial for industrial purposes (i.e. solder, gunmetal, magnox).

20 Common Metal Alloys and What They

Humans make metal alloys for various reasons.

Some alloys have long-standing historical significance. For example, electrum is a naturally-occurring alloy of gold and silver (with trace amounts of copper) that was used to make the very first metal coins in ancient history.

However, most of the common metal alloys on the above list are actually human inventions that are used to achieve practical purposes. Some were innovated by brilliant metallurgists, while others were discovered by fluke, but they’ve all had an ongoing impact on our species over time.

Alloys with an Impact

The Bronze Age (3,000 BC – 1,200 BC) is an important historical period that is rightfully named after one game-changing development: the ability to use bronze. This alloy, made from copper and tin, was extremely useful to our ancestors because it is much stronger and harder than its component metals.

Steel is another great example of an alloy that has changed the world. It is one of the most important and widely-used metals today. Without steel, modern civilization (skyscrapers, bridges, etc.) simply wouldn’t be possible.

While nobody knows exactly who invented steel, the alloy has a widely-known cousin that was likely invented in somewhat accidental circumstances.

In 1912, English metallurgist Harry Brearley had been tasked with finding a more erosion-resistant steel for a small arms manufacturer, trying many variations of alloys with none seeming to be suitable. However, in his scrap metal heap – where almost all of the metals he tried were rusting – there was one gun barrel that remained astonishingly untouched.

The metal alloy – now known to the world as stainless steel – was a step forward in creating a corrosion-resistant steel that is now used in many applications ranging from medical uses to heavy industry.

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Base Metals

How AI and Big Data Will Unlock the Next Wave of Mineral Discoveries

Mineral exploration produces massive amounts of data. With AI, geologists can produce geological insights from this data to make the next discovery.

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How AI and Big Data Will Unlock the Next Mineral Discovery

Emerging technologies such as artificial intelligence (AI) and machine learning are rapidly proving their value across many industries.

Today’s infographic comes from GoldSpot Discoveries, and it shows that when this tech is applied to massive geological data sets, that there is growing potential to unlock the next wave of mineral discoveries.

Mineral Exploration: Fortunes Go to the Few

Discovering new sources of minerals, such as copper, gold, or even cobalt, can be notoriously difficult but also very rewarding. According to Goldspot, the chance of finding a new deposit is around 0.5%, with odds improving to 5% if exploration takes place near a known resource.

On the whole, mineral exploration has not been a winning prospect if you compare the total dollar spend and the actual value of the resulting discoveries.

Measuring Discovery Performance by Region (2005 to 2014)

Region Exploration SpendEstimated Value of DiscoveriesValue/Spend ratio
Australia$13 billion$13 billion0.97
Canada$25 billion$19 billion0.77
USA$10 billion$5 billion0.48
Latin America$33 billion$19 billion0.57
Pacific/SE Asia$8 billion$4 billion0.49
Africa$20 billion$23 billion1.19
Western Europe$4 billion$2 billion0.42
Rest of World$27 billion$8 billion0.32
Total$140 billion$93 billion0.57

Figures in 2014 dollars. (Source: MinEx Consulting, March 2015)

Aside from the geographic insights, on the surface this data reveals that mineral exploration does not pay for itself. That said, there are still significant discoveries worth billions of dollars – it’s just the returns go inordinately to a few small players that make big finds.

Much of the money spent on exploration may not have produced the next great discovery, but you can be sure it created massive volumes of data that could be used for further refining of exploration models.

So, What is the Problem?

Every exploration failure or success produces geological insights. The mineral exploration process is the source of massive amounts of data in the form of soil samples, chip samples, geochemistry, drill results, and assay results. Each drill hole is a tiny snapshot into the processes that form the earth.

A single drill hole can create 200 megabytes of data and when there are many drill holes coupled with other types of information, an exploration project can produce terabytes of data. If you wanted to compare your one project to hundreds of others to find the best insights, the amount of data becomes dizzying.

All these data points are clues that can be used to find new mineral deposits, but to sort through them is too much for even an entire team of capable geologists.

Luckily, using today’s technology, this data can now be used to train computers to spot the areas showing similar patterns to past discoveries.

AI-Assistance

The true power of AI will be in its ability to empower technically trained professionals to make decisions in an increasingly complex and data-driven world.

Professor Ajay Agrawal, a noted academic in AI and founder of the University of Toronto’s Creative Destruction Lab, categorizes human activities into five categories:

  1. Data collection
  2. Information retrieval
  3. Prediction
  4. Judgment
  5. Action

He concludes that machines should do the first three and that humans – such as geologists, doctors, lawyers, investment bankers and others – should make the judgment calls and take the actions based on predictive capabilities of AI.

The mineral exploration industry presents a good example of how AI and big data can help technical professionals make discoveries faster, with less money, using a wide variety of data inputs created.

Opportunity Generator and the AI-friendly Future

AI can take the large amounts of data from many different projects in order to spot the right opportunities to further explore, building on decades of geological data from projects around the world.

The right technology can help reduce the risk inherent in exploration and lead to more mineral discoveries on budget, rewarding those that deployed their data most effectively. Companies that are able to harness this power will tip the scales in their favor.

As a result, mineral exploration is no longer so much an art of interpretation – but instead, it becomes closer to a pure science, giving geologists a whole-field perspective of all the data.

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