Critical Battery Metals: Navigating the Nickel & Rare Earths Investment Landscape

Company Interviews

Recording date: 15 April 2024

As the world accelerates its transition to electric vehicles (EVs) and renewable energy, securing reliable supplies of critical battery metals like nickel and rare earth elements (REEs) is becoming increasingly important. However, mining companies focused on these metals face significant challenges in attracting investor capital, largely due to China's dominance in the REE market and new nickel supply from Indonesia.

In a recent panel discussion, CEOs from three companies advancing nickel and REE projects – Namibia Critical Metals, Nordic Nickel, and Alaska Energy Metals – shared their perspectives on the outlook for these critical metals and how they are navigating the challenging financing environment.

One key takeaway is the growing role of strategic partnerships and alternative financing sources. With traditional equity markets proving challenging, companies are increasingly looking to partner with larger mining companies, downstream players like EV manufacturers, and government agencies to fund project advancement. Examples include Nordic Nickel's partnership with BHP and Namibia Critical Metals' joint venture with Japan Oil, Gas and Metals National Corporation (JOGMEC).

Another critical theme is the importance of environmental, social, and governance (ESG) practices, particularly in earning social license to operate. Early, sustained, and authentic community engagement was highlighted as essential to de-risking projects and securing the broad stakeholder support needed to move projects forward.

The panelists also discussed the role of recycling, agreeing that while it will be important, it cannot replace the need for significant new primary production, at least in the near to medium term. "You can't recycle what hasn't been mined in the first place," emphasized Alaska Energy Metals CEO Greg Beischer.

For investors, the panelists suggested focusing on companies with advanced, well-located projects in stable jurisdictions to mitigate development and geopolitical risk. They also recommended considering a portfolio approach to gain diversified exposure across the battery metals suite and taking a long-term view, as near-term volatility is likely but the underlying demand growth and supply deficits are expected to reward patient investors.

Overall, while the investment landscape for nickel and REEs remains challenging, the long-term fundamentals are compelling. With the right strategies around partnerships, ESG, and jurisdiction selection, companies like Namibia Critical Metals, Nordic Nickel, and Alaska Energy Metals are well-positioned to help meet the growing demand for these critical metals and deliver value for their stakeholders.

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Learn more: https://www.cruxinvestor.com/categories/commodities/nickel

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