The electric car boom to turbocharge battery’s metal producers are: Moody’s

JOHANNESBURG (Reuters) – Demand for metals used in battery-electric vehicles, could increase six-fold, as with electric cars, with 8% of the traffic on the road and by the mid-2020s, it will deliver huge dividends for the producers in countries such as the Democratic Republic of the Congo, Moody’s said on Tuesday.

FILE PICTURE: artisanal miners are wearing, the crude ore Tilwizembe, a former industrial-copper-cobalt mine, outside Kolwezi, the capital city of the Lualaba Province in the south of the Democratic Republic of the Congo-June 11, 2016. REUTERS/Kenny Katombe/File Photo

The company said the global shift to electric vehicles would be likely to drive up the demand for cobalt, of which CONGO is the world’s number one manufacturer, and just like lithium, nickel, and copper.

However, the weak governance in the central African country would be able to keep the investors and scupper its potential, it added in a research note.

In other countries, would be to take advantage of the benefits of a nudge in the direction of the electric cars, Chile, and the Philippines, followed by Peru, Indonesia and Australia, it said.

The battery tree with the greatest potential for growth in the Congo’s sovereign credit rating because of the value of production of this metal, it would be “very small” relative to the economy.

By 2030, the cobalt production would be the equivalent of almost 16 per cent of DRC’s total GDP last year, more than half the price of the goods, and 133% of the revenue of the government, and a significant boost in the fiscal and current account balances, Moody’s wrote.

But the “very, very poor governance, poor infrastructure, and persistent pockets of social instability remain key obstacles to foreign investment, slowing the country’s ramp-up of production,” she said.

An increased focus on environmental and social issues, as well as the traceability of the metal adds a very different risk LEVELS, Moody’s added.

However, even “very part” exploitation ” of the DRC’s mineral wealth is likely to be a credit-positive impact of the analysts.

In DRC, the economy is in the grip of a volatile battery’s metal prices. It is expected to grow by 4.3 percent this year, compared to 5.8% in 2018, due to the lower copper and cobalt prices, the International Monetary Fund’s forecast.

The decrease in cobalt prices have prompted Glencore to halt output for a two year period from the end of 2019 at the latest, at the Mutanda mine in the DRC, which is the world’s largest cobalt mine.

Among other things, battery, metal, producers, Australia is likely to have a more moderate impact, with production of the battery metals are likely to be more than 5% by 2018, with exports of goods and total government revenue by 2030, according to Moody’s.

Peru will likely increase in the share of the metal market due to new exploration projects, while in the Philippines, it must also be economic gains and higher sales collection.

Canada, China, and Russia would be least affected by the increase in demand for batteries, metal, Moody’s analysts said that due to the size and diversification of their respective economies.

Report by Helen Reid; Editing by Pratima Desai and Jan Harvey

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