Source:Investing News
Battery metals lithium and cobalt tend to get the most attention in electric vehicle (EV) discussions, but according to Byron King, rare earths are “the real secret to EVs.”
Speaking at the Prospectors & Developers Association of Canada (PDAC) convention, King, who is editor of Rickards’ Gold Speculator at Agora Financial, said, “first of all, there are rare earths in the batteries; and second of all, the traction motors … those traction motors run on strong rare earth magnets.”
He added, “and you’re talking about moving from a few ounces of rare earths in a car to several pounds of rare earths in a car once you go electric — now, do the math.”
China is the world’s top producer of rare earths by far, which has caused opacity in the market and made it difficult for non-Chinese companies to make headway in the space.
Acknowledging those challenges, King commented, “it’s not so much a mining play as it is almost a chemistry play — it’s a downstream refining and processing play. But it’s going to happen because it has to happen, because the Chinese side of the supply is drying up.”
King also touched on the gold space, including recent M&A activity. He quipped, “if you can’t wait for Wrestlemania in April in New Jersey, and you’re really into it — you really want to see that Wrestlemania — you should keep watching this whole Barrick Gold (TSX:ABX,NYSE:GOLD)/Newmont Mining (NYSE:NEM) thing, because that is what’s going on.”
He added, “it’s an ego-driven, corporate C-suite, big-banker kind of play — one big company trying to take over another … I don’t think it reflects well on overall governance of big companies in the sector.”