George Donne - A Rock and a Hard Place: Challenges for Miners in the EV Supply Chain
Updated: May 10
The huge rises in commodity prices for lithium-ion battery raw materials has seen a flood of small exploration and development companies fight to get into the space. Talk of a new commodity supercycle driven, by the global shift towards decarbonisation and lofty EV production targets set by major automotive OEMs, is a huge value prize for a sector that has been starved of capital and investor interest for over a decade.
However, joining the supply chain for EV batteries brings with it a number of consequences for small miners, who will bear most of the initial burden of supplying critical minerals to the OEMs. It is these small exploration companies with minimal human and financial resources, and not the major diversified miners who will shoulder the responsibility for finding the new sources of the vast quantities of battery metals (e.g. lithium, manganese, nickel, cobalt and graphite) required for us to transition to a zero-carbon future.
To make the successful leap from an explorer to part of an OEM supply chain will require meeting challenges that few in the small-cap mining sector, let alone the broader mining industry, have seen before. These companies are not only going to be required to act as both miners and chemical companies, if the OEMs are to break the dominance of China in downstream processing, but also pioneers in sustainable and low carbon operation, if the OEMs are to meet their net-zero targets.
With soaring prices, sky-rocketing demand dynamics and ESG-style investors keen on participating in the green revolution, life should be good for the mining industry. However, poor public perception, consistent geopolitical challenges, low investor risk-appetite and unprecedented technical and sustainability hurdles will mean that the odds will continue to be stacked against the vast majority of minerals projects ever coming into production unless fundamental changes are made.
Fig 1. Source: Visual Capitalist
 https://elements.visualcapitalist.com/lithium-prices-surge-on-ev-demand-from-china/  https://www.mining.com/battery-metals-snapshot-eight-companies-developing-minerals-critical-for-a-low-carbon-future/  https://www.mining.com/europes-green-deal-requires-massive-amounts-of-battery-metals-study/  https://elements.visualcapitalist.com/visualizing-chinas-dominance-in-clean-energy-metals/  https://www.mining.com/web/serbian-government-revokes-rio-tintos-licences-for-lithium-project/  https://www.mining.com/mexico-passes-mining-reform-nationalizing-lithium/
VP Business Development, Giyani Metals Corp
George has over 20 years’ experience in natural resources across investment banking, private equity and public company management. He is currently VP Business Development for Giyani Metals Corp, as TSXV listed battery metals company developing a battery-grade manganese project in Botswana, overseeing IR, commercial negotiations and corporate financing. George also holds a CFA Level 4 Certificate in ESG Investing.