Scott Patterson of The Wall Street Journal is reporting that mining projects are being delayed after a plunge in battery-metal prices. He writes:
America’s transition to electric vehicles is running into an unexpected snarl.
A surprising crash in prices for lithium, cobalt and other metals used in EV batteries is hitting mining companies, which are suspending or delaying new projects and expansions. The disruptions are threatening to deepen shortages of those materials in coming years and hit the brakes on the Biden administration’s timeline for weaning the country off gas-powered cars.
“This situation is a bit dangerous because the mines aren’t going to get built,” said Anthony Milewski, chief executive of nickel producer Nickel 28, who is a longtime investor in battery metals. “We should be building those mines now and we’re not.”
Battery-grade lithium prices are down more than 60% this year, while nickel, graphite and cobalt have lost about 30%, according to Benchmark Mineral Intelligence. A big factor behind the declines: a weaker-than-expected economic recovery after Covid-19 lockdowns in China, the world’s largest consumer of metals.
The sliding prices mark a turnaround from when carmakers rolled out ambitious plans to switch their fleets to EVs and metal prices rocketed higher in what many analysts believed would be a yearslong supercycle. […]
Milewski, Nickel 28’s CEO, said the steep fall in metal prices could also spark another phase of the boom-bust cycle. Falling prices can make EVs more affordable, which in turn could boost demand for batteries—and drive metal prices higher again.
“Low prices are a cure for low prices,” Milewski said.
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