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BP's latest investment another step toward M&A in battery minerals

Oil major BP PLC has invested US$20 million in "ultra-fast charging" battery developer StoreDot Ltd. as international companies are moving to secure a foothold in the infrastructure needed to power electric vehicles, with oil companies in particular seen to add battery metals miners to their acquisition target list.

BP which already has over 70 electric vehicle charge points at retail sites globally after investing US$5 million in rapid charging systems manufacturer FreeWire Technologies in January — announced the new investment May 22 in StoreDot, which has developed a lithium ion-based battery technology which enables ultra-fast charging for the mobile and industrial markets.

Using this technology, StoreDot is developing a new type of electric-car battery that will aim to achieve a charging experience that is comparable to the time spent to refuel a traditional car. Prior to this, the company aims to commercialize its "flash battery" for mobile communication devices as early as 2019.

The British oil company's latest move comes barely a fortnight after it signed a memorandum of understanding May 10 with China's Nio Capital to explore opportunities in advanced mobility.

Paul Howard, resources analyst at Perth-based corporate advisory Hartleys whose coverage includes Mozambique-focused graphite junior Battery Minerals Ltd., among others — told S&P Global Market Intelligence that BP's move could well be a precursor to targeting battery metals miners.

"With reports saying peak oil demand will be 2030, electrification will obviously be the major driver afterwards, and consumers will move from combustion engines to battery-driven ones. So for BP to remain sustainable they would want to be getting involved in battery minerals," Howard said.

However, he said the challenge ahead for oil companies considering such a move was picking something to invest in now that will have a sustainable future.

"What's in a lithium-ion battery today may not be the case in 20 years, as they're talking about solid state batteries in 20 years' time that don't actually contain graphite, for example," Howard said.

"[Battery producers] talk about NCM 111 batteries — one portion each of nickel, cobalt, and manganese and now they're changing to NCM 811. Then again, Porsche is apparently using a different battery completely from other car manufacturers, so it all depends on what prevails."

As for which commodities to target, mining economist John Sykes, MinEx Consulting's strategist, said many of the ASX's minerals sector initial public offerings in the past 18 months have involved cobalt one way or another, or those companies have entered cobalt plays shortly after listing.

"Copper is [also] always a desirable exploration target, it's a major commodity, vital to infrastructure, power (again, including renewable energy), construction, and industry, but good new discoveries are vanishingly rare," he told S&P Global Market Intelligence.

"BHP Billiton Group is [also] in the process of converting Nickel West to a focus on the battery industry from its traditional focus on stainless steel."