Securing a Made in America Supply Chain for Critical Minerals
Prices of base metals like copper, and the so called critical minerals, like cobalt, continue to soar. Geopolitical tensions have also increased, hurting globalization and ultimately punishing the consumer. The Biden-Harris administration in the US have also announced a move called “Securing a Made in America Supply Chain for Critical Minerals”. The goal of this is to reduce dependency on foreign sources of “critical minerals” – a very strong catalyst for penny stocks that mine these exact critical minerals.
The announcement mentions the growing need for these minerals due to the green revolution:
As the world transitions to a clean energy economy, global demand for these critical minerals is set to skyrocket by 400-600 percent over the next several decades, and, for minerals such as lithium and graphite used in electric vehicle (EV) batteries, demand will increase by even more—as much as 4,000 percent.
Further reading of this announcement’s Fact Sheet shows a list of notable companies and how they plan on using more “domestic” sources. Here’s an extract of Tesla’s commitment:
Tesla intends to source high-grade nickel for EV batteries from Talon Metals’ Tamarack nickel project under development in Minnesota. Talon Metals and the United Steelworkers (USW) have established a workforce development partnership for the project to train workers on next-generation technologies in the local community and from mining regions in the U.S. facing declining demand. As part of this partnership, Talon has agreed to remain neutral in any union organizing efforts by USW.
The conclusion one can reach here is that greater pressure to source battery metals from “domestic” or “friendly” sources will be greater over time. Geopolitical conflict adds further fuel to the fire, as Russia is now off-limits and that will decrease supply as a result.
Metals across the board have seen movement upwards as a result of this. Cobalt continues to rise and is currently at $38/kg:
Copper has recently breached all-time-highs, and while it has pulled back a little, there is a supply shortage and it is a very important metal in the green transition:
Richard Adkerson, CEO of Freeport McMoran, believes we will have a shortage of copper (echoing what Goldman Sachs has said as well):
How to play this:
The new policy by the White House will have a direct impact on any assets in North America that supply critical metals. A great way to capitalize off of this is to find early stage penny stocks that supply exactly what the White House considers to be critical minerals. We remain very bullish on GZD.
We like Grizzly Discoveries (TSXV: GZD) and their Robocop and Greenwood properties. Their Robocop property lies on the Purcell Supergroup, which has played host to past-producing stratabound Copper-Cobalt mines. Robocop has shown high grades of both copper and cobalt. Cobalt is extremely valuable in the production of electric vehicle batteries. It is an expensive and rare component, of which more than 65% of the global supply originates from the Democratic Republic of Congo. Robocop has had sample grades like 1.41% Cu, 0.62% and 0.134% Co, 1.19% Cu, with silver credits.
GZD is trading at an extreme discount at 8.0 c. Our research shows this stock to be worth at least 15 c using conservative estimated and based on the inevitable continuation of the demand increases for both copper and cobalt. You can read our full report here: https://www.tsxvresearch.com/research/gzd-cobalt-copper-tsxv/