Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

Investment in critical minerals in web of doubt, industry says

Published 07/15/2024, 06:10 AM
Updated 07/15/2024, 06:16 AM
© Reuters. FILE PHOTO: A worker of Sigma Lithium Corp SGML.V takes samples at the Grota do Cirilo mine in Itinga, in Minas Gerais state, Brazil April 18, 2023. REUTERS/Washington Alves/File Photo
TTEF
-
STLA
-

By Eric Onstad

PARIS (Reuters) - Many companies are reluctant to invest in critical minerals and energy transition projects due to uncertainty about consumer demand for EVs and government commitment to zero-carbon goals, industry players said.

The long-term picture is intact of a world needing large quantities of materials such as lithium, cobalt and copper to enable the world to give up using fossil fuels.

The timing of the next several years, however, is in question, they said at the World Materials Forum in Paris last week.

Both the European Union and 12 U.S. states aim to ban new petrol car sales by 2035, but there has been a push-back about those targets.

"I think there is a lot of doubt right now that this will happen," Mathias Miedreich, former CEO of Belgium recycling and battery materials group Umicore, told the conference. "That makes it very difficult to invest."

In May Miedreich stepped down from Umicore, which lowered its 2024 profit forecast the following month due to weak demand projections for battery materials due to a slowing EV market.

Sales of new battery-electric cars in the EU dropped 12% in May from a year earlier.

"Financing was not a big issue a few years ago," said Stephane Michel, president of TotalEnergies (EPA:TTEF) Gas, Renewables & Power unit. "You can still find capital now, but you have to have the right project."

TotalEnergies is part of the ACC EV battery joint venture including automakers Stellantis (NYSE:STLA) and Mercedes, which last month paused plans for German and Italian plants.

An executive with a major European chemicals group that supplies battery materials said many companies are assuming that there will be a delay of about two years in the energy transition with 2030 projections now being moved back to 2032.

"That's the view now, but it could change and be more serious, it's hard to say," the executive told Reuters, declining to be named because he was not authorised to speak to the media.

© Reuters. FILE PHOTO: A worker of Sigma Lithium Corp SGML.V takes samples at the Grota do Cirilo mine in Itinga, in Minas Gerais state, Brazil April 18, 2023. REUTERS/Washington Alves/File Photo

An executive of a global company involved in EV battery materials said demand for critical materials in China and Asia was holding up better than in the Europe and the United States.

"The question is where do we put our next capacity. You have to be very agile, the market is moving very fast," he said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.