RE: Polar Landscape!31 Oct 2021 00:11
L - that makes you a pretty serious Shell shareholder, and you give a great background of where Shell is coming from relating to mining, and you are well ahead of me in this background, as I am relatively new to Shell & Income Stocks generally. And I agree that they are completely different not-necessarily compatible industries even though there are rudimentary similarities. Without any detailed knowledge at the time I saw Billiton as an attempt to diversify, for a number of very valid reasons at the time. It was also, almost "fashionable" for companies to diversify away from their core activities at the time. Conglomerates like Hanson, BTR and Williams seemed to manage a diverse portfolio of companies quite successfully, so why could they not do the same.
After nearly a quarter of a century trying to make it work, Billiton has to be seen as a dismal failure. Always a learning process, but definitely a skeleton in the cupboard as a reminder to future Boards.
To explain a little better as I have been a bit obscure on the reasoning side in my statements. I don't personally see Shell making an acquisition on traditional lines as say a diversification play, justified by their knowledge of the extraction of gas and liquid fossil fuels & them seeing cross-overs & parallels with what they already do for a living.
I see Shell wanting control & ownership of a significant slice of the raw materials (largely metals) that are mined, processed and ultimately form critical components in manufactured green essentials such as wind-turbines, batteries etc. This includes lithium & all of the Rare Earth Metals etc etc & there is nothing much short of an economic "war" going on to buy up deposits & secure supplies because it currently looks highly unlikely that future demand can be met.
China can see the end in sight for production of its own Rare Metals. They have subsequently bought vast tracts of land particularly in Africa to boost their opportunities to exploit the planets Rare Metal reserves. France has late in the game acquired the rights to exploit Rare Earth Metals often situated in undersea areas. As an isolated example the Democratic Republic of Congo supplies more than half the world's cobalt, which is indispensable for the manufacture of EV's lithiun-ion batteries. Extracting the cobalt is straight out of the middle-ages, 100,000 miners with picks and spades dig in to the earth to find the mineral, particularly around Lualaba.
China has shown how they can exploit the market by blatantly manipulating prices in the marketplace. Essentially starting off with teaser low prices, largely western "green" companies buy, then China restricts supply and puts up prices. Then they offer companies consistent low prices if they manufacture in China.
OPEC + and particularly Putinomics has taught the world how political the energy production and supply arena is. I think the green revolution will just throw up another set of exploitative parameters,