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Electric vehicle revolution to boost demand for 'battery metals'

The auto industry is shifting with the electric vehicle revolution, which is expected to drive up global demand for metals used in batteries such as copper, nickel, lithium and cobalt, according to speakers at the 121 Mining Investment conference in Hong Kong on Oct. 17.

Willem Middelkoop, founder and chief investment officer of Commodity Discovery Fund, believes that copper and nickel will benefit greatly from the growing trend of electric cars.

"There is no shortage in the production of lithium or cobalt. The real problem is copper and nickel," Middelkoop said, noting that the amount of copper used in a Tesla electric vehicle could be as high as five times of that in a traditional vehicle.

Rick Van Nieuwenhuyse, president and CEO of Trilogy Metals Inc., described copper as a "metal of the future" in his presentation on how the copper producer plans to advance its Upper Kobuk Mineral Projects in Alaska through collaborations with the local community as well as with funding partner South32 Ltd.

"We cannot produce, transmit, or use energy without copper at every step," Nieuwenhuyse said.

He warned that supply disruptions are becoming more frequent in the copper sector, with increasing risks from storms, power issues, protests and riots.

"New projects will be deeper and in more remote areas. ... Average reserve grade is declining," Nieuwenhuyse said, noting that maintaining current production levels will require additional capital investments.

Robert Adair, director of international equities with UOB Asset Management, commented on the investment sentiment, noting that a lot of interests are coming back to the industry for real this time.

"But there is a lot of doubts. [Investment in mining] is something people need to be convinced more," Adair added.

Meanwhile, both Middelkoop and Andrew Ferguson, CEO of APAC Resources Ltd., stressed that uranium has been overlooked in the clean energy boom. Nuclear is expected to take a huge part in the new energy mix, according to Middelkoop.

Ferguson added that miners should maintain a degree of discipline and take a longer-term view.