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EV sales growth is good news for a critical minerals spike

The date of: 2020-11-03
viewed: 3


European electric vehicle sales are expected to triple to about 10 per cent of all vehicles this year and could make up as much as 15 per cent of total market vehicle by 2022 according to a new report by green policy think tank Transport & Environment.

That’s good news for the critical minerals sector.

This is thanks to the European Union’s emissions standards, which are due to become more stringent next year.

From 2021, phased in from 2020, the EU fleet-wide average emission target for new cars will be 95 grams of carbon dioxide per km, which equates to a fuel consumption of about 4.1 litres per 100km of petrol or 3.6 l/100 km of diesel.

Peugeot, Citroën, DS, Opel and Vauxhall, Volvo, Tesla and BMW Group are already complying with these targets while Renault, Nissan, Toyota and Ford have a small gap of just 2g of carbon dioxide per km.

T&E added that while EVs could make up 20 per cent of all automobile sales in four years if current regulations are not revised, more ambitious targets would be required to drive further growth.

Europe isn’t the only region pushing EVs. China is looking to have new energy vehicles (NEV) make up 25 per cent of all sales by 2025.

And it is not satisfied with the domestic market either with UBS analysts saying that Chinese players would seek to aggressively enter overseas markets.

This growth in EV demand and growing awareness of the importance of supply chain security – particularly for critical minerals – is music to the ears for miners and junior explorers in the battery metals and other EV related spaces.

The Australian government has also recognised the importance of critical minerals, publishing a report that highlighted 200 mining projects covering 24 critical minerals.

EV battery metals

Piedmont Lithium (ASX:PLL) stole the limelight since reaching a deal in late September to supply Tesla with 160,000 tonnes of spodumene concentrate per annum for an initial five-year term.

This represents about a third of its planned spodumene concentrate production and could be increased at Tesla’s option.

Pilbara Minerals (ASX:PLS) has entered into an agreement to acquire the Altura Mining’s (ASX:AJM) lithium operation in Western Australia for $US175m ($247.8m).

This will consolidate the two neighbouring operations to unite the greater Pilgangoora orebody.

Pure Minerals (ASX:PM1) has inked an offtake-potential project funding deal with the world’s biggest electric vehicle battery maker, LG Chem.

This Memorandum of Understanding (MOU) – a non-binding agreement that comes before a legal one – is for the supply of 10,000t nickel and 1,000t cobalt each year from Pure’s TECH Project in Queensland.

In October, Vulcan Energy (ASX:VUL) completed 3D and 2D seismic surveys that are expected to shortcut exploration and development times for its lithium brine project in Germany’s Upper Rhine Valley.

It is now working to model high brine-flow rate fault zones from the data that it plans to use to upgrade the confidence category in some resource areas.

A pre-feasibility study for its project, which seeks to produce both renewable geothermal energy and lithium hydroxide from the same brine source, is on track for completion by end 2020.

Rare Earths

Arafura Resources (ASX:ARU) revealed in September that customers in Europe, China and Japan had all confirmed that its final rare earth oxide products from its Nolans project in the Northern Territory were within their specifications.

This paves the way for the company to escalate commercial negotiations with potential customers.

Arafura’s Nolans project key critical minerals are neodymium and praseodymium, which are used in the manufacture of neodymium-iron-boron permanent magnets used in practically all offshore wind power turbines and are also common in the motors of electric vehicles.

In August, European Metals (ASX:EMH) kicked off advanced resource drilling at its flagship Cinovec hard rock lithium project in the Czech Republic to convert existing indicated resources to ore reserves.

This will also obtain ore samples for the next phase of metallurgical testing.

Hasting Technology Metals’ (ASX:HAS) drilling at its Yangibana project have returned shallow, high-grade intersections at the Fraser’s North and South prospects.

Notable results include 3m at 7.28 per cent TREO from 8m and 8m at 3.51 per cent TREO from 31m.

Drilling results from the North now confirm contiguous new mineralisation up to 250m from the Fraser’s Pit limit while all mineralisation in the South remains open down dip and along strike.

In Uganda, drilling has confirmed a material extension of mineralisation east of the current resource boundary at Ionic Rare Earths’ (ASX:IXR) Makuutu project.

The drill program is aimed at validating the exploration target of between 270Mt and 530Mt grading 0.04 per cent to 0.1 per cent total rare earths oxides (TREO), quantifying the potential of the 26km long Makuutu mineralisation corridor and providing data for an upcoming resource expansion.

Makuutu has a current resource of 78.6Mt grading 840ppm TREO.

Northern Minerals (ASX:NTU) recently set aside a $5m exploration budget for work including over 16,000m of drilling at its Browns Range project in WA’s Kimberley region.

This program will seek to increases resources and mine life. Results from exploration and the pilot plant test work will also feed into a new feasibility study to evaluate the potential for a commercial, larger scale heavy rare earths plant.

Meanwhile, Pensana Rare Earths (ASX:PM8) is carrying out exploration at its new Coola project adjacent to its advanced Longonjo NdPr project in Angola.

This is designed to test defined targets prospective for a range of high technology critical minerals including rare earths, scandium, niobium, tantalum, hafnium and fluorspar.

RareX (ASX:REE) continues to intersect consistent thick, high-grade mineralisation at its Cummins Range project with the latest assays returning a top hit of 109m at 3.6 per cent total rare earth oxides (TREO) and 0.44 per cent niobium from 24m.

The latest results confirmed the northwest trending channel of mineralisation encountered in previous drill holes and extended the zone of high-grade mineralisation by 60m to 130m below surface.

Red Mountain Mining (ASX:RMX) has added the Mt Mansbridge rare earths project in Western Australia that is prospective for heavy rare earths and nickel-cobalt to its portfolio.

The Mt Mansbridge project covers 280sqkm of the Kimberly region of WA southeast of Halls Creek, and is 40km from Northern Minerals’ flagship Browns Range project.

A reconnaissance program is underway to prepare an exploration program to validate priority drill targets and the potential for critical minerals such as rare earths.

Drilling at Mt Mansbridge is expected to start in the January 2021 quarter and will focus on heavy rare earth elements.

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