Critical Minerals Like Lithium and Cobalt Could See Prices Spike Up to 350% Soon - Here's Why
You've probably heard about electric vehicles (EVs) becoming more popular. Major car companies like GM and Ford are investing billions of dollars to build new factories to make millions of EVs over the next few years and this is where Canadian North Resources Inc. (TSXV: CNRI) (OTCQX: CNRSF) is a must watch player in the stock market.
Here’s an important report that you should read from Mineral Report Today on this company:-
7 Reasons Why Canadian North Resources Inc. (TSXV: CNRI) (OTCQX: CNRSF) Could Hold Significant Upside Potential Ahead Of 2024.
But there's one big challenge - these EVs use certain raw minerals that are becoming very scarce. Minerals like lithium, cobalt, and nickel go into making the batteries and motors that power EVs. Without enough of these "critical minerals", it will be impossible for automakers to build all the EVs they want.
Scarce supplies of these minerals is likely to send prices skyrocketing up to 350% in the near future. Lithium prices have already tripled in just the last year. Cobalt is up 60% higher in 2022 compared to 2021. Nickel prices have doubled over the same period.
This massive price boom is being driven by a huge imbalance between supply and demand. On the demand side, major car companies like GM, Ford, and others have announced plans to invest over $100 billion dollars into new EV production lines in the next 5 years which is why I am keeping an eye on this company Canadian North Resources Inc. (TSXV: CNRI) (OTCQX: CNRSF)
As they try to rapidly scale up, their demand for critical battery minerals is growing much faster than mining companies can dig up new supplies. Expanding existing mines or building new ones takes years of planning and billions in investment.
On top of that, most of the world's lithium mining and refining capacity is concentrated in countries like Chile and China. Political policies, trade disputes, and environmental regulations in those countries make it tough for the supply to keep up with global demand.
For cobalt, about 70% of the world's supplies come from the Democratic Republic of Congo in Africa. Unstable politics and shaky infrastructure in that country also limit how much cobalt can be reliably exported each year.
Between huge demand growth and tight supply, economic theory tells us prices of these scarce minerals will keep rising. Some experts think lithium prices could spike 350% above today's levels. Cobalt and nickel are predicted to see 200%+ increases as well.
These eye-popping price hikes might sound like bad news for EV makers or consumers. But it's important to understand they won't last forever. Those extremely high prices we could see in the next year or two will actually encourage major investments into new mines and refineries.
Once new supplies come online in 3-5 years, prices should stabilize and make EV batteries affordable again. It happened before when oil prices spiked in 2008 - high prices cured the scarcity.
In the meantime, governments are realizing they need to take action to secure reliable access to critical minerals. In the US, Congress is considering bills to support more domestic mining and processing. Having stable supplies here at home will be key to meeting our clean energy goals.
So in short, brace yourself for some potential shocks at the car dealership over the next few years due to scarce minerals. But also have faith that high prices today will bring new supplies tomorrow. Patience and smart policies will see us through this critical minerals "supercycle" on the road to an electric future.
Source:https://mineralreportstoday.com/critical-minerals-expected-to-skyrocket-350pct/utm_source=analysethis&utm_medium=influencer&utm_campaign=cnrsf_us&utm_id=cnrsf_us
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