The mining sector, traditionally seen as stuck in the past, is now playing a pivotal role in building the green economy.
Yet, investors have been slow to embrace the change.
It’s an understandable challenge for investors, particularly as ESG becomes a portfolio focus.
However, metals such as cobalt, copper, nickel, lithium, vanadium and graphite, crucial for green technologies, are set to make an essential contribution to decarbonisation.
And there are several companies that are looking to change the investment narrative as car manufacturing giants and clean energy pioneers seek more of those materials for their ambitious projects.
Let's look at lithium and graphite in particular.
Lithium and the green strategy
Tesla (NASDAQ:TSLA), under the helm of Elon Musk, recently initiated a new lithium refining facility in Texas. While this may be seen as another step in Tesla's ongoing expansion, it carries a strategic significance in securing the lithium supply chain for local production in North America.
China controls up to 80% of global lithium refining capability but Tesla is not leaving anything to chance.
And while not all car companies will build their own lithium refineries, Tesla's integration of the supply chain has a European counterpart: Cinovec. Owned by European Metals Ltd, Cinovec has aligned with the Czech government to supply refined lithium to car manufacturers in southern Germany.
This alignment of product and supply chain is also seeping down to miners who are starting to view their green energy and battery projects as opportunities to move their products up the value chain, thereby contributing to a greener global economy.
European Lithium Ltd (ASX:EUR, OTCQB:EULIF) is a mining exploration and development company focusing on its wholly-owned Wolfsberg Lithium Project in Austria. Its aim is to be the first local lithium supplier into an integrated European battery supply chain.
On the local front, Lightning Minerals Ltd (ASX:L1M) is focused on fulfilling the critical minerals deficit through the supply of lithium, nickel, cobalt, copper and PGEs.
Infinity Lithium Corporation Ltd (ASX:INF) is helping to facilitate energy transition through the development of its fully integrated San José Lithium Project in Spain and the development of innovative, sustainable lithium processing technologies through its Infinity GreenTech business.
Graphite continues to attract interest
Graphite, another crucial component for electric vehicles, is expected to earn better ratings from the investment community, as companies plan to create a circular economy for battery metals by integrating refining and recycling operations. The circular economy model aims to close the loop, bringing the end of the supply chain back to the start.
Others are building integrated supply chains.
International Graphite Ltd (ASX:IG6) has vertically integrated operations in Western Australia and a strategy to produce a fully purified and coated battery anode material using its own mined resources.
The aim is to ensure it captures the full value of its graphite resource.
Evolution Energy Solutions LLC is a US subsidiary of Evolution Energy Minerals Ltd (ASX:EV1), incorporated to progress EV1’s downstream plans for the production of high-value coated spherical graphite products.
During 2022, Evolution completed a commercial verification program with a US technology partner confirming the suitability of Chilalo fine flake graphite for the production of coated spherical graphite (CSPG) for use in lithium-ion batteries.
Evolution has been working on potential sites for the development of a US downstream operation since 2022.
Volt Resources Ltd (ASX:VRC, OTC:VLTRF) is a graphite producer and an emerging natural graphite anode producer, with a 70% interest in the Zavalievsky Graphite (ZG) business in Ukraine. The ZG mine and processing facilities have been in operation since 1934 and are near key markets with significant developments in lithium-ion battery production.
ZG benefits from an existing customer base and graphite product supply chain.
Looking forward
There is certainly growing interest from investors in battery metals stocks, despite recent price volatility.
As companies within these sectors look to contribute to the green energy revolution while maintaining solid ESG practices, investors are likely to ride the electric train.
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