Technology & Mining




Technology is a driver of demand for raw materials. A new battery design, a new electric motor, or a change in the composition of steel will all drive demand for one commodity versus another.

It is important to remember that some changes in demand are structural and not price sensitive. With others, demand will be engineered into oblivion in the next product cycle if commodity prices shift.

Significant amounts of copper demand cannot be replaced. However, when copper prices started to increase, copper plumbing disappeared. We have cheaper solutions that are quicker to build, such as plastic.


We have a hard time believing that lithium batteries are the only solution to the battery problem. We also have a hard time being convinced that batteries are going to work as a mainstream solution for automotive demand. Electric cars are very expensive, and the weight-to-power density of batteries is still not optimal.

At some point we will solve the battery problem, and when we do, lithium might be part of the solution or it might be irrelevant. It is very risky to spend hundreds of millions of dollars on a mine where demand can change based on the whims of an engineer sitting at Toyota who does not care about anything except the best price-to-value solution to his problem.

So when you get excited about the next hot topic, remember to ask the question: can it be engineered out of existence? Does a 3x increase in raw material costs completely change how the end product is built?


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