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The ASX welcomed at least 42 resource listings last year, underscoring the many opportunities available to investors in the current market.

“The average ASX-listed resource company has about AU$11 million in the bank right now,” Rob Murdoch of Austex Resources said during his keynote address at the Brisbane Mining Conference last week.

The principal analyst at the independent consultancy firm told investors in attendance that there’s a lot of money around the sector, which has led to increased exploration spending in Australia.

In fact, exploration expenditures rose to AU$974 million during Q4 2021.


However, the influx of money on the exploration side hasn’t equated to more discoveries yet, and that’s due to the growing complexity of drill targets and deposits.

“The only thing is, if we divide the total exploration spend each quarter by the number of new drill intersection announcements, we see a rising trend, it was around AU$1.4 million per announcement,” he said. “But in the last year, it has risen up to about AU$2 million per successful drilling announcement.”

Murdoch said the higher spending totals are the result of several factors, including lingering issues from pandemic lockdowns. “Exploration is getting deeper, so it's getting more expensive. There's more regulation hurdles ... (and) the COVID shutdown and labour shortage also caused problems in getting people to work.”

The seasoned sector analyst warned that some companies may be distracted by their swollen coffers.

“Or do big bank balances equal a lack of focus?” he asked rhetorically. “We have to watch that when companies (have) too much money.”

Where the value lies in the ASX mining sector

In terms of where the money currently is in Australia's mining space, the 50 year sector veteran pointed to gold, which dominates with a 39 percent share of the ASX resource market, up 25 percent since 2018.

In descending order, iron ore, rare earths, fertilizers, kaolin, manganese and silica have also seen increases in market share over the last three years.

The majority of ASX-listed companies ― 66 percent ― have their flagship projects on home soil, with 41 percent located in Western Australia. Of the companies with premier projects outside of Australia, 14 percent are in the Americas, 11 percent are in Africa and 9 percent are elsewhere.

Another factor to consider before investing is which commodities are seeing price increases. Oil and gas, as well as gold, have seen their value grow significantly, with the latter up 56 percent since 2018.

“(Additionally), nickel has gone up 125 percent just in this year alone,” said Murdoch, who went on to note that thermal coal has seen a 98 percent price increase and will play an integral role in Australia's future.

“Thermal coal is going to keep this state going for a long, long time. It's the most critical mineral in the state ... because it makes money for the state,” he added.

Murdoch also pointed to a cyclical resurgence in cobalt, which has found renewed demand in the electric vehicle sector. “If we look at the commodities whose prices have gone up the most year-to-date, it's cobalt," he commented. "There's been a lot of interest in cobalt; it's come back into its own. Of course, it had a bit of a boom and then had a bit of a crash, and now it's come back again.”

Playing the long game in the Australian resource space

As his presentation came to an end, the principal analyst at Austex encouraged investors to take long positions when it comes to resource value.

“The best way to make money out of the market is really to get in early on a drilling intersection, ride right up and don't be scared to go in deeper if they make a good announcement of a new discovery. Because if it is really a good discovery, it will go up higher again," he noted.

Murdoch finished his keynote by praising the market optimism attendees displayed during a quick show of hands, noting that demand will certainly be there to drive the sector higher.

According to Murdoch, the "only negative" that could prevent this market growth is rising inflation.

Don’t forget to follow us @INN_Australia for real-time news updates!

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

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"Buy the dip and hold on for dear life, as the crypto kids say — HODL," said Frank Holmes of US Global Investors.

Frank Holmes: Gold Advice as Price Falls — Buy the Dip and HODL youtu.be

The gold price has tumbled since last week's US Federal Reserve meeting, which saw the central bank raise rates by 50 basis points for the first time since 2000 in an effort to combat inflation.

Speaking to the Investing News Network, Frank Holmes, CEO and chief investment officer at US Global Investors (NASDAQ:GROW), pointed out that the yellow metal's decline is a buying opportunity.

"Buy the dip and hold on for dear life, as the crypto kids say — HODL," he said. HODL is a term that originated in the cryptocurrency community, although it’s since gained mainstream usage through popular memes.

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mining cart in a tunnel

Driven by foreign investment, mining has become one of Argentina's fastest-growing sectors; Australian companies make up a particularly large segment of this industry.

Mining in Argentina has become one of the fastest-growing sectors in the nation’s economy. Argentina’s ample and comparatively underexplored gold and precious metals resources are a valuable opportunity, and will likely drive considerable growth in the country’s mining sector in the coming years.

In comparison to its neighbour Chile, Argentina’s mining sector has a lot of room to grow. Attractive incentives, including favourable mining policies, competitive mining investment laws and mineral-rich geology, have been seen as positive steps towards a strong Argentinian mining industry.

Mining giants are definitely attracted. Barrick Gold (TSX:ABX,NYSE:GOLD) has staked a claim in Argentina alongside its partner Shandong Gold Mining (HKEX:1787), extending the life of the country's largest gold mine, Valadero, with a US$75 million investment. On the other hand, Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO), the second largest metals and mining company in the world, recently acquired the Rincon lithium project. Formerly owned by Rincon Mining, the undeveloped lithium brine project is situated in Argentina's Salta province. It represents the latest in a series of acquisitions and developments in the region by Australian businesses.


Mining in Argentina: A brief history 

Unlike other regions, Argentina's mining sector doesn’t have a particularly long history. A 2016 study released by KPMG International notes that the Argentina mining sector's first significant milestone was the 1813 enactment of the Mining Promotion Law. Designed to encourage exploration, research and production of the country's extensive mineral wealth, this law ultimately laid the foundation for modern-day Argentina's welcoming attitude towards mining.

Argentina went on to adopt the Argentine Mining Code in 1887, a regulatory framework that established state ownership of the country's subsoil while still allowing for private exploration. The fledgling industry developed slowly over the next several years. Although it received some benefits due to increased demand and mineral prices during the First and Second World Wars, this was not enough to inspire significant growth.

It was not until near the end of the 20th century that the sector began to flourish. Constitutional reform in 1994 shifted ownership of natural resources from state to province, while a new regulatory framework attracted considerable investment from both Canada and Australia. Notably, from 1990 to 1999, joint production of minerals increased by 104 percent. During this period, the gross domestic product of Argentina's mining industry grew at a rate of between 5 and 7 percent per annum.

Mining in Argentina soon became the primary target of foreign direct investments. The production of common metals such as steel and aluminium were the primary beneficiaries of this surge of investment.

Unfortunately, growth soon slowed to the point of stagnation, the result of several factors. First, the country's mining code was unnecessarily complex and cumbersome to navigate. Second, socioeconomic strife created more risk than some investors were willing to accept. And finally, the introduction of controversial legislation such as the 2002 Glacier Protection Law alienated the mining sector, leading to multiple high-profile exits.

Mining in Argentina: The revitalization

In 2017, Argentina further deepened its trade relationship with Australia, signing a memorandum of understanding that saw the two countries collaborate on building education, research and capacity across multiple sectors. This agreement, which placed particular emphasis on mining, established a strong foundation for any Australian company looking to conduct exploration or production in the country. The 2019 election of a new president only further moved the dial, with President Alberto Fernández swearing to revise the country's mining code and reconsider its Glacier Protection Law.

Moreover, as the world has continued the push for cleaner energy and carbon neutrality, demand for battery materials such as copper and lithium — both of which are abundant throughout the country — has sharply increased.

Because Argentina is currently at the heart of a global lithium rush, it's easy to forget the fact that it also houses significant mineral wealth in both gold and precious metals. These ample, comparatively underexplored resources represent an incredibly valuable opportunity. It is likely that, alongside lithium, they will drive considerable growth in the country's mining sector.

Political instability in Chile may also contribute to Argentina's rise, as investors seek an alternative to its well-developed mining sector. Ultimately, Argentina has set a goal of US$10 billion in mining exports by 2030.

Mining in Argentina: ASX gold companies

Australian mining and exploration companies have a significant presence in Argentina and exert considerable influence over the country's mining industry.

Challenger Exploration (ASX:CEL) has also established itself in the gold-rich province of San Juan with the Hualilan project. Consisting of 15 mining leases and an exploration licence application over 26 square kilometres, Hualilan contains a high-grade historical resource of 627,000 ounces of gold that remains open in all directions.

The company has had nine rigs drilling at the project for almost a year, and is due to release its maiden resource estimate shortly. The project will use the same rail shipping methods as the highly successful Josemaria copper project, recently acquired by Lundin Mining (TSX:LUN,NASDAQ:LUMI).

Another ASX-listed explorer in Argentina, E2 Metals (ASX:E2M), which has the El Rosillo and Conserrat projects in Patagonia, counts Eric Sprott as one of its largest shareholders. This follows his decision to cornerstone a capital raise in March 2022. Sprott is a well-recognized investor with a strong history in mining.

When referring to its efforts to promote mining efforts, San Juan’s mining ministry said, “It has become a state policy. We provide the fiscal conditions, social licences and the legal certainty schemes necessary for the full development of mining. Our territory concentrates 50 percent of the country’s mining potential.”

Finally, Austral Gold (ASX:AGLD,OTC Pink:AGLDF) in 2019 acquired a 100 percent interest in the Casposo silver-gold mine through a share purchase agreement with Troy Resources (ASX:TRY). A combination open-pit and underground mine, Casposo began production in 2011. It is currently undergoing care and maintenance, and a reopening date has yet to be announced.

Takeaway

Despite a troubled political history, Argentina is incredibly well-positioned to turn this around, and the country maintains a strong relationship with Australian mining companies. Favourable mining policies and competitive mining investment laws, combined with mineral-rich geology, have the potential to greatly strengthen the country's mining industry.

This INNSpired article is sponsored by Challenger Exploration (ASX:CEL). This INNSpired article provides information that was sourced by the Investing News Network (INN) and approved by Challenger Exploration in order to help investors learn more about the company. Challenger Exploration is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.

This INNSpired article was written according to INN editorial standards to educate investors.

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Challenger Exploration and seek advice from a qualified investment advisor.

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"My fear is that I do think you still have a little bit more downside in gold ... but this (level) is going to be the best buying opportunity," said Gareth Soloway of InTheMoneyStocks.com.

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The gold price is trading lower than some market watchers would prefer, but the top-performing ASX gold stocks so far this year are making leaps.

Click here to read the previous best ASX gold stocks article.

While 2021 was a disappointing year for gold, analysts are optimistic about the outlook for 2022.

The yellow metal passed the US$2,000 per ounce mark as tensions between Russia and Ukraine heated up, but has since pulled back to trade closer to US$1,800. However, diverse factors could combine to push it higher.

Demand for gold jewellery, gold bars and coins, and the metal’s use in the technology sector are still going strong, and supply is also a growing concern due to decreased gold exploration efforts in recent years.


Against this backdrop, many Australian gold stocks are doing well. And with the precious metal generally considered a safe investment, it's worth being aware of the county's top-performing companies.

Here the Investing News Network looks at the best ASX gold stocks of the year so far by year-to-date gains. The list of stocks below was generated on April 29, 2022, using TradingView’s stock screener, and all companies included had market caps over AU$30 million at that time.

1. Xantippe Resources

Year-to-date gain: 180 percent; market cap: AU$107.3 million; current share price: AU$0.01

Xantippe Resources (ASX:XTC) is focused on Western Australia's Southern Cross region, which is widely known for its past gold production. The precious metals explorer's Southern Cross project is made up of 20 prospecting licences and six exploration licences, and holds a number of key priority targets.

In late April, Xantippe confirmed the acquisition of lithium tenements in Argentina with the hope of commencing exploration activities in the third quarter.

2. Minrex Resources

Year-to-date gain: 55.81 percent; market cap: AU$63.05 million; current share price: AU$0.07

Minrex Resources’ (ASX:MRR) assets include five gold and base metals projects in Western Australia, four of which are in the mineral-rich East Pilbara region.

The company started off the year with high-grade gold drill results from its work at the Queenslander gold prospect within its Sofala project. The prospect is centred around the past-producing Queenslander mine.

3. Aston Minerals

Year-to-date gain: 38.1 percent; market cap: AU$164.19 million; current share price: AU$0.15

Gold and nickel-cobalt explorer Aston Minerals (ASX:ASO) is moving forward at its Edleston gold project, located in the Cadillac-Larder Lake fault zone of Canada's Abitibi greenstone belt. Edleston is its flagship asset, and according to the company, it is the first in over a decade to drill in this area.

Aston continues to focus on gold at Edleston, but its Boomerang nickel-cobalt target has come to the forefront in recent months, with the company announcing the results of its maiden hole there in early December.

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Marlee John, currently hold no direct investment interest in any company mentioned in this article.

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All eyes are on the US Federal Reserve as the central bank makes an effort to tame inflation.

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"I'm sorry," she told the Investing News Network, when asked what's next. "(We're headed into) a hyperinflationary depression, because they have to burn off all of this debt — and this is a global issue."

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Maiden RC Drill Program Commences at Korhogo Project
Mako Gold: Exploring High-Grade Gold Deposits in Côte d'Ivoire
Mako Gold: Exploring High-Grade Gold Deposits in Côte d'Ivoire

Mako Gold Limited (“Mako” or “the Company”; ASX:MKG) is pleased to advise that it has commenced a 2,000m maiden RC drilling program at the Korhogo Nord Permit which, with the Ouangolodougou Permit constitute the Korhogo Project1 . The permits collectively cover 296km2 hosting 17km of faulted greenstone granite contact as shown in Figure 1. Both permits are 100% owned by Mako and are readily accessible from the Mako Field Office.


HIGHLIGHTS

  • 2,000m maiden Reverse Circulation (RC) drill program commenced on first high-priority target at Korhogo – Mako’s second project, in a previously undrilled land package
  • Primary target is a 2km-long +20ppb gold anomaly with high-grade cores over 60ppb gold coincident with faulted greenstone-granite contact
  • Additional targets identified for further exploration including auger and follow up RC drill testing
  • The 100% Mako owned Korhogo Project has no previously recorded drilling and covers 296km2 of prospective tenure located within 15-30 km of Barrick’s 4.9Moz Tongon Gold Mine
  • Exploration at Korhogo is on strategy for Mako -ensuring the Company continues to target discoveries on greenfield exploration projects, whilst moving its flagship Napié Project towards a Mineral Resource Estimate (MRE).
  • Drilling completed at the Gogbala Prospect on the Napié Project where a MRE is on-track for June 2022

Mako’s Managing Director, Peter Ledwidge commented:

“Mako is in the privileged position to be able to commence a maiden drilling campaign on its second project, whilst finalising its MRE on its flagship Napié Project. This leverages the core skillset of the management team; namely making discoveries on highly prospective greenfield projects in West Africa. The commencement of drilling at Korhogo marks an important milestone in the growth of the Company as we progress to the drilling phase on the project. Our previous work at Korhogo has culminated in the identification of several high-priority targets. We are pleased to commence drilling on the first target, a 2km-long +20ppb gold auger anomaly with high grade cores over 60ppb Au, coincident with a faulted greenstone/ granite contact. We look forward to announcing results from drilling at Korhogo as well as Napié, where we have completed our drilling ahead of the upcoming MRE

Korhogo is located in a fertile greenstone belt that hosts Barrick Gold’s 4.9Moz Tongon gold mine and Montage Gold’s 4.5Moz Kone gold deposit, both in Côte d’Ivoire, as well as Endeavour’s 2.7Moz Wahgnion gold mine just across the border in Burkina Faso (Figure 5).

Previous work completed by Mako includes airborne magnetics/ radiometric geophysics, soil geochemical sampling, and the recent 11,000m auger drilling program1 . Interpretation of the results on these previous programs has identified several high-priority targets. The maiden drilling program will focus on the first target, a 2km-long +20ppb gold auger anomaly with high grade cores over 60ppb gold, coincident with the faulted greenstone/ granite contact shown in Figure 2.

Drilling has commenced on the first of four fences of heel to toe RC holes (where the bottom of one hole when projected to surface is the collar of the next hole), covering approximately 900m of the highest auger anomalies (Figure 3).


Click here for the full ASX Release

This article includes content from Mako Gold, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.

MKG:AU
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Australian lithium miners continued to move ahead with their projects during the year's third financial quarter.

After hitting all-time highs in 2021, lithium prices started to stabilise in 2022's first quarter.

China’s lockdown measures to battle COVID-19 have disrupted the supply chain and impacted domestic demand in recent weeks, but this is expected to be temporary, according to William Adams of Fastmarkets.

“The lithium market is very tight. We don't see that easing anytime soon,” he said during a recent webinar about risks in the battery metals market. “We think the underlying fundamentals and the trends are still very strong.”


During the third quarter of the financial year, Australian lithium miners continued to move ahead with their projects, and despite the increased volatility in the markets, many ASX lithium stocks saw share price gains as well.

Perth-based Pilbara Minerals' (ASX:PLS,OTC Pink:PILBF) production for the quarter was 81,431 dry metric tonnes (dmt), slightly down compared to the previous three months, but within guidance. The company said the main factor impacting output was higher COVID-19 cases, which resulted in staff and contractor shortages.

“COVID-19 has (and may continue in the near term) to cause operational delays, including staffing shortages for both shut-down and operating staff (mining and processing),” the company said in a statement. Even so, Pilbara has decided to maintain its production guidance in the range of 340,000 to 380,000 dmt.

During its fourth battery material exchange auction, the company saw the highest bid ever at US$5,650 per dmt for a cargo of 5,000 dmt of spodumene, showing the critical shortage in lithium raw material supply.

Western Australia-focused Pilbara, which owns the lithium-tantalum Pilgangoora operation, has partnerships with Ganfeng Lithium (OTC Pink:GNENF,SZSE:002460), General Lithium, Great Wall Motor Company (OTC Pink:GWLLF,HKEX:2333), POSCO (NYSE:PKX), CATL (SZSE:300750) and Yibin Tianyi.

Shares of Pilbara were trading at AU$2.53 on May 10, down 28.13 percent year-to-date, but up more than 100 percent compared to this time last year.

For its part, leading Australian lithium and iron ore miner Mineral Resources (ASX:MIN,OTC Pink:MALRF) saw its Mount Marion mine’s production reach 104,000 dmt during the quarter; it also shipped 94,000 dmt of spodumene concentrate. The company is maintaining its full-year production guidance at 450,000 to 475,000 dmt.

In April, Mineral Resources and partner Ganfeng agreed to optimise production and upgrade Mount Marion's processing facilities. Spodumene concentrate capacity at the operation is expected to increase from 450,000 dmt per year to 600,000 dmt annually.

“The decision to upgrade the plant reflects an expectation that the lithium market outlook will remain extremely strong for the foreseeable future,” the company said in a press release. A second stage increase, expected to be completed by the end of 2022, will see capacity rise further to reach 900,000 dmt.

Aside from Mount Marion, the company holds interests in Wodgina in partnership with another top producer — Albemarle (NYSE:ALB). The companies decided to restart Wodgina last year as a result of soaring global lithium demand. The mine produced its first spodumene concentrate on May 12.

“(We have) also agreed to review the state of the global lithium market towards the end of this calendar year to assess timing for the start-up of Train 3 and the possible construction of Train 4,” the company said. Each train has a nameplate capacity of 250,000 dmt of 6 percent product.

Mineral Resources’ share price was down 10.71 percent on May 10, trading at AU$52.71. That said, the stock is up 9.11 percent year-on-year.

During the March quarter, Argentina-focused Allkem (ASX:AKE,OTC Pink:OROCF) outlined its plans to increase lithium production threefold by 2026 and become a top three chemicals supplier.

In Western Australia, the company owns the Mount Cattlin mine, which produced 48,562 dmt of spodumene concentrate and shipped 66,011 tonnes in the March quarter.

“Strong conditions in the spodumene market are supporting advanced discussions for spodumene concentrate pricing in the June quarter of approximately US$5,000 per dmt SC6 percent CIF on sales of approximately 50,000 tonnes,” the company told investors in a note.

In Argentina, Allkem operates the Salar de Olaroz and is developing the Sal de Vida lithium brine. Additionally, in partnership with Toyota Tsusho (TSE:8015), Allkem is building a 10,000 tonne per year lithium hydroxide plant in Naraha, Japan. The company also owns the James Bay lithium pegmatite project in Canada.

On May 10, shares of Allkem were changing hands for AU$10.95, down 2.23 percent year-to-date, but up over 55 percent year-on-year.

Although its main focus is nickel, Independence Group (ASX:IGO) joined the lithium party last year after it bought a stake in Tianqi Lithium’s Australian assets. The companies, in joint venture, now control the majority of the biggest lithium mine in the world — Greenbushes.

Production at the mine was up 5 percent quarter-on-quarter at 270,464 tonnes of spodumene concentrate. By 2025, Greenbushes is expected to add around 800,000 tonnes per year to its output capacity.

IGO has seen its share price decline 4.63 percent year-to-date, trading at AU$11.34 on May 11. However, the stock is up 47.27 year-on-year.

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

person holding lit light bulb over desk next to ascending stacks of coins

At the recent RIU Resources Round-Up event in Sydney, Harry Fisher of CRU Group shared key factors battery metals investors should keep an eye out for.

After 2021's big price increases for raw materials, all eyes are on what may happen next in the electric vehicle (EV) market ― the main driver of demand for battery metals such as lithium and cobalt.

EV sales had a stellar year in 2020, even as the world suffered through the brunt of the COVID-19 pandemic, and 2021 brought strong sales numbers as well.

“EV sales doubled last year alone, and we're expecting them to surpass 10 million this year,” Harry Fisher of CRU Group told the audience at the RIU Resources Round-Up in Sydney last week.


CRU Group is forecasting that EV penetration will reach 20 to 22 percent by 2026 ― that would translate to an additional 17 million in annual sales compared to today.

“Since 2017, we've had more than 50 percent annual growth for EV demand each year, and over the next 20 years EV battery demand will increase by more than 10 times,” Fisher said.

The analyst shared with the audience the main themes he believes will continue to be front and centre in discussions surrounding the battery metals industry.

“We've seen incredible price performance, particularly for lithium, and also for cobalt and nickel, in the last really 18 months, but even more so this year,” Fisher said. “I don't think many of us expected prices to go as high as they have gone, particularly for lithium and nickel.”

Lithium prices have increased north of 400 percent since 2021, with nickel prices on the London Metal Exchange reaching a historical high of more than U$100,000 per tonne earlier this year. These high levels have been hitting EV producers, many of which have increased prices.

“In the last week or so, we've seen that the battery producers' Q1 margins have fallen substantially, so they're really feeling the heat of this, and that is starting to have some tangible effects in the market,” Fisher said.

All in all, CRU is expecting prices to level off the current peak, but to remain strong in the medium term on the back of demand from the EV sector.

Another big theme to keep an eye on is the increasing regionalization of supply chains. Even though EV and battery makers in Europe and North America have made announcements about setting up gigafactories, there has not been a lot of movement in the upstream and the midstream parts of the supply chain.

Around 40 percent of lithium supply comes from South America, with another 45 percent coming from top-producing country Australia. For cobalt, 70 percent of supply comes from the Democratic Republic of Congo. But all that output ends mostly in China ― which controls over 70 percent of the midstream.

“That's obviously not ideal from a supply security perspective, but it also means the supply chains aren't particularly efficient from a cost perspective,” Fisher said. “Also, from a safety perspective, moving around battery chemicals, precursor batteries — it makes a lot more sense to have the upstream and midstream closer to market.”

With EV demand expected keep soaring, there’s a lot more that needs to be done to strengthen supply chains.

“We need to start seeing more investment to support the EV markets, and to prevent them from relying solely on China and Asia for all of their battery materials,” Fisher said.

Don't forget to follow us @INN_Australia for real-time news updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

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