Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
I think the main point for me which makes a huge difference is that Zinnwald is in Germany. Cinovec looks fantastic and I do hold shares in EMH, but the company currently seems to be going nowhere due to Czech politics. I think that the German government are much more likely to want to get a source of lithium up and running in their country than the Czech government seem to be. For me, Bacanora is a fantastic long term investment even if they had nothing to do with Zinnwald. Zinnwald is a bonus, but looks like being a valuable bonus.
I remember the times when BCN were viewed as slow moving and EMH were going to be much more efficient and up and running at around the same time or earlier - how times have changed.
My buy of 4400 at 12:28 also showing as a sell for some reason ....
Slightly long post here, but I like looking at these sorts of figures and it keeps my belief in this share despite being heavily down. These numbers here are from the insideevs web site and show the annual global sales of EVs for the last few years, with the annual percentage increases:
2018 - 2018247 (64%)
2017 - 1227117 (58%)
2016 - 777497 (41%)
2015 - 550297 (72%)
2014 - 320713 (229%)
2013 - 97507 (85%)
2012 - 52607
If you assume that the rate of increase will roughly continue, you get the following figures over the next few years, based firstly on the lowest rate of increase (41%)
Option 1 @ 41%
2018 - 2.01m (50KT)
2019 - 2.85m (71KT - increase of 21KT)
2020 - 4.01m (100KT - increase of 29KT)
2021 - 5.66m (141KT - increase of 41KT)
2022 - 7.98m (199KT - increase of 58KT)
2023 - 11.28m (282KT - increase of 82KT)
2024 - 15.86m (396KT - increase of 115KT)
2025 - 22.36m (559KT - increase of 162KT)
And secondly with the second lowest rate of increase (58%)
Option 2 @ 58%
2018 - 2.01m (50KT)
2019 - 3.19m (79KT - increase of 29KT)
2020 - 5.04m (126KT - increase of 47KT)
2021 - 7.96m (199KT - increase of 73KT)
2022 - 12.58m (314KT - increase of 115KT)
2023 - 19.87m (496KT - increase of 182KT)
2024 - 31.40m (785KT - increase of 286KT)
2025 - 49.61m (1240KT - increase of 455KT)
The figures in brackets are a rough estimate of the number of Kilotonnes of LCE that are required for this number of EVs. I have based this on 25Kg of LCE per battery which I think is probably a low estimate as the range of EVs increases.
So, the way that EV growth has happened so far means only a fairly modest annual increase in the demand for lithium. But, over the next few years that starts to become pretty significant. In 2019, battery manufacturers need to find around another 25KT of LCE to keep up with demand. But, in a few years time, this becomes an additional several hundred KT to find. And this is only looking at EVs and not considering other uses such as grid storage.
I will be holding onto my existing shares here and increasing my holding when possible as I just cannot believe that a potential low cost producer at the stage Bacanora is at will not go into production somehow whether a takeover, JV or going it alone.
I agree Strangerstill. Although the value of my BCN shares has gone down significantly and I currently have quite a large paper loss, the IIs, offtake agreement and the size of Bacanora make me believe that in the long term this will be a fantastic investment. The demand for Lithium is increasing at a significant rate and I will look forward to seeing Tesla's sales figures for the past quarter which must be starting to be a significant concern to the established car manufacturers.
From the CityAM article - "The lender said electric vehicles would have to make up around 13.7 per cent of the market by 2025 to "clear the market" and offset supplies compared with expectations of a nine per cent penetration rate."
From my figures (based on the ev worldwide sales figures from insideevs.com and global car sales figures from statista.com) there were approx 1.2m EV sales worldwide in 2017 against approx 80m total sales - ie approx 1.5% of cars sold in 2017 were EVs
According to InsideEVs, the growth rate over the last few years has been 85%(2013), 229%(2014), 72%(2015), 41%(2016), 58%(2017) and approx 66% for the first 5 months of 2018.
If the growth rate continues as it has, even assuming that it sticks to the lowest rate of the last few years (41% from 2016), then I make that about 18.7m EVs sold in 2025 - ie about 20% or more of the overall car sales.
So, it seems that Morgan Stanley are predicting that the rate of adoption of EVs is going to slow significantly over the next few years? That seems highly unlikely to me given increasing range, falling costs, issues with air pollution etc etc. If the reason for the 'volatility' is supposed to be due to oversupply of Lithium because only 9% of car sales are going to be EVs in 2025 then I think the market has got this wrong.
Does anyone keep an eye on the insideevs site (don't think I can post a link)? I think it is interesting and has just announced a global year on year increase in the sale of EVs of 94% for January. I find a lot of the share price movements of BCN incomprehensible, but the underlying idea that there is a huge increase in the demand for Lithium already happening and likely to continue makes me very happy with this investment. Just wish I had bought some more yesterday morning ...