Mining Is the New Green
POSTED ONJUNE 5, 2022 BY FRANK GREGORY
Hey Influence Trader:
Today is World Environment Day.
It has been 50 years since the 1972 United Nations Conference on the Human Environment. That meeting led to the first host of global agreements to “protect” the planet.
There have been many since. Their impact?
Still waiting to see.
I’m coming to you today from the Denver airport.
I made another trip to discuss mining. It’s the best way to celebrate World Environment Day.
I’ve got a mining project brewing that I’m very excited about – but securities laws prohibit me from discussing it here. (And I also tied in a high-level meeting on a top-secret drone project. Busy week!)
Green Mining
As you know, I’m obsessed with mining as it relates to green energy.
I especially like rare earth metals mining.
Rare earth minerals are critical to all high-tech industries, from cell phones to car batteries.
One of their primary uses is the production of “permanent” magnets, which are used in electric motors and to power your cell phone speakers.
Mining to be green always seems counterintuitive, but production and consumption are both necessary if we want to preserve the planet.
In the end, our production and consumption can have positive environmental impacts.
Obviously, we need sustainable supply chains.
Those have been under stress.
Oil Update
Between actions by the Biden administration and the Ukraine conflict, we are seeing continued energy shortages and staggeringly high prices.
While the Biden Administration was able to pressure OPEC to pledge a 650,000 barrel per day increase in July and August … that will just about offset the loss of sanctioned Russian oil on the worldwide market but due little to impact prices.
In fact, the price of crude jumped another $5 a barrel to $117 after the announcement.
And consumption is expected to increase during the summer travel season.
While OPEC might help a little, the Biden Administration is doing little to help domestic production.
The Environmental Protection Agency (EPA) just proposed giving states and tribes more power to block infrastructure projects, like pipelines, under the Clean Water Act.
Companies are feeling pressure from the administration. That is why many oil leases have not been taken up by oil companies.
It’s just not worth the risk, particularly with heavy ramp-up costs.
In its final year, the Trump administration held an auction to lease more than 23,000 drillable acres in the Arctic National Wildlife Refuge.
But the Bureau of Land Management just rescinded and canceled the lease.
Such moves by this administration are why Chevron (Ticker: CVX) pulled out of a lease on land owned by an Alaska Native Corporation inside the refuge.
For every step forward on oil prices there are two or three steps back.
High oil is one of the factors driving a renewed call for a move to green energy solutions.
Green Transition
My partner Bill “Power Income” Griffo wrote this weekend about the transition to solar power.
I couldn't agree more.
Solar will be an important component of a move to green energy … as will wind and nuclear.
Bill made some good calls in First Solar (Ticker: FSLR) and Enphase Energy (Ticker: ENPH), both of which trading guru Andrew Giovinazzi and I have been watching.
He also made the call on the Invesco Solar ETF (Ticker: TAN) for the broad global solar play.
Bill is a wise man!
Solar, wind and nuclear can’t happen without mining. And it can’t happen here without domestic mining supply chains.
Mining, including rare earth mining, is on the rise. In April, China exported 4,601 metric tons of rare earth permanent magnets. That’s a 7.7% increase over March, and an 18% year-over-year increase.
The price of rare earth magnets is up 47.13% from a year ago.
There’s money in them thar hills!
The problem is that there are not currently many tradable domestic rare earth mining operations – and no permanent magnet facilities.
The only tradeable and operational rare earth mine in the U.S. is the Mountain Pass mine in California, which is owned by MP Materials (Ticker: MP).
My issue with MP is that it is partially owned by the Chinese.
While I wait for other opportunities to develop … some with my help … I’m going to look at end users of rare earth minerals.
Mine Your EV
The electric vehicle industry is one of the big users and domestic companies continue to go all in.
It’s not been an easy road.
Shortages of chips and lithium have hurt sales, but some companies have managed supply chain issues better than others.
Ford (Ticker: F) is one of those companies.
F announced a $3.7 billion investment to boost its EV production, including the much-anticipated F-150 Lightning pickup and the Mustang Mach-E.
The move is expected to add over 6,000 union jobs at three US plants.
F delivered its first Lightning this past week.
According to F’s media folks, the buyer was tired of waiting for his Tesla (Ticker: TSLA) Cybertruck.
While car sales dropped 30% in May over the prior year, F’s sales fell just 5%.
Much of that was due to the jump in its F-Series and Mustang Mach-E sales.
The EV market share has tripled over the past two years – and it’s not just cars.
A consortium of European car makers announced plans to invest $800 million to build 7,000 European charging stations.
General Motors Cruise (Ticker: GM) has become the “first and only company to operate a commercial, driverless ride-hail service in a major U.S. city."
GM’s project was green lit by San Francisco.
The GM subsidiary can now charge fares for driverless rides.
Importantly, Cruise's cars are battery powered.
The EV future looks bright.
And that means that mining and the elements to support EV looks … bright, too.
Cutting Through the Noise for You,
Frank
CATEGORIESPOWER MOVES
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