BlackRock Pumping Capital Into Battery Metals
BlackRock's World Mining Trust aiming capital at tomorrow's green economy, says chairman Ian Cockerill
BlackRock's World Mining Trust, one of the world's largest mining investors, is dialling-up its investment in battery metals, says the Trust's chairman Ian Cockerill, betting that copper, lithium, cobalt and nickel will become indispensable building blocks in tomorrow's green economy.
Having been early investors in lithium, BlackRock is positioning itself for a “boom scenario” in electric vehicles, Cockerill tells Global Mining Observer, as cars jump globally from the internal combustion engine onto the electric grid.
“We're going to see a massive, massive shift... The old traditional clunkers of companies that only produce iron ore, or coal, they're still going to be needed, but you're going to see a proliferation of smaller companies that are more nimble on their feet.”
Cockerill, who built South African gold group Gold Fields into one of the world's largest gold producers, says the mining industry's recent shift towards green technology is about more than hype or green-washing.
“It takes a long time for companies to reposition themselves, because there's an incredibly long lead time to get a mine up and running, so it's not easy for miners to chop and change overnight. But there's a structural change in the market. Electric vehicles are going to come quicker than many people think.”
China, which currently churns-out half of all electric cars, has already set quotas for a fifth of its new car sales to be electric or plug-in hybrids by 2025. European car groups, including Volvo and Jaguar, are also making the switch, pledging to flip all their cars to electric or hybrid models in the next two years.
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Queensland is meanwhile building an Electric Super Highway, with charging stations all the way from Coolangatta to Cairns, a two-day drive up Queensland's idyllic coast. The first “truly non-polluting car”, Cockerill believes, charged off a renewably-fueled network, is a “very real possibility in the next 10 to 15 years.”
Electrification has its doubters. “Any academic who says 100 percent of cars will be electric in the future has been reading too many comic books,” according to Atsushi Horiba, a Japanese businessman who uncovered emissions cheating by German car giant VW. The biggest constraint: a dilapidated grid, unable to handle the vast demand of more than a third of all cars on the planet.
“The grid is like a 120-year-old lady waiting to die,” says Robert Friedland, one of the world's largest copper mining investors. “She can't take a shock.”
The solution may be grid upgrades, meaning yet more metal. Mining giant BHP, one of BlackRock's largest mining investments, says it is playing the “mega-trend” of electrification via its existing investments in copper. Electric cars use four times more copper than conventional vehicles, according to research by UBS.
BlackRock's World Mining Trust, which runs around $1.2bn ($800m), is also a large investor in lithium group Albemarle, which is currently doubling tonnage at the world's largest lithium mine in Australia, and in trading giant Glencore, which has vast positions in cobalt and nickel.
Glencore has been “lightyears” ahead of the market in pre-empting electrification, Cockerill says. “It's a very bold, assertive management team, they place big bets and if you want exposure to battery materials, Glencore has been wide awake.”
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