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Investment manager study shows incredible demand for critical minerals

Ron Walter looks at the critical mineral sector
Bizworld by Ron Walter

A review of global markets for critical minerals suggested this sector can be a “powerful opportunity for investors” in the coming years.

The study by Sprott Asset Management Inc. notes a new commodities super cycle driven by demand for critical minerals is in its early stages.

Sprott is controlled by Canadian billionaire Eric Sprott, who made his fortune investing in gold, oil and other minerals.

The global conversion to clean energy and reduced greenhouse gas emissions provides investors these opportunities. Globally, $1 trillion was invested in clean energy last year.

More than 190 countries have policies and subsidies geared to develop increased clean energy. Investments will increase worldwide demand for electricity by 76 per cent within 17 years.

Even fossil-fuel focused Saskatchewan set policy to make the province important in critical mineral production.

Four trends in the attempt to reduce global temperatures are: a move away from fossil fuels, increased battery storage, transition to electric vehicles and interest in modular nuclear power.

All use critical minerals.

Electric vehicles have reached 16 million units but will be at 350 million in eight years. Demand for critical minerals will grow to incredible levels by 2040.

Lithium demand is expected to grow up to 4,500, per cent, graphite by 2,500 per cent, cobalt by 2,000 per cent, nickel by 1,000 per cent, rare earths by 1,000 per cent and copper by 500 per cent.

Supplies of critical minerals are tight, needing investment in exploration and development.

Not all are equal. Cobalt and graphite are the standard today but research and development is investigating alternatives to them — silicon for graphite.

Cobalt is not only short in supply but 70 per cent of known reserves are located in the politically unstable Republic of Congo.

The Sprott report deals with only 10 pf the 50 minerals listed as critical. The full report is available at

Sprott does not delve into strategies but my take on various options for investors follows.

Conservative-minded investors have prospect of investing in current producers of critical minerals. They may want companies with new or expanding mine production in the near future.

Moderately riskier investors might want to invest in companies developing new mineral deposits.

Or the speculators might want to dive into exploration companies. Caution: this is the riskiest option.

Some well-heeled investors might try all three options.

My most successful tactics have been investing in operations nearing new production, or existing miners with expansion or new development at hand.

CAUTION: Remember when investing, consult your adviser and do your homework before buying any security. Bizworld does not recommend investments.

Ron Walter can be reached at

The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication. 

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