- United Kingdom announces that nation plans to outlaw sale of gasoline-powered vehicles by 2030, full decade ahead of original deadline
- Electric vehicle sales are set to rise by 50% YoY in 2021, with global EV penetration rates forecast to touch 31% by 2030
- Electric vehicles require nearly 80kg of copper during production process versus approximately 25 kilos for internal combustion engine powered vehicle
- Surge in long-term copper demand bodes favorable for Josemaria Resources, with company reportedly attracting attention of global mining giants in recent months
On November 18, 2020, the United Kingdom made the fateful and unexpected decision to ban the sale of new internal combustion engine vehicles in the country from 2030 onwards (https://ibn.fm/6BkSt) — a step that the British Government felt was necessary to achieve its longer-term carbon emission target goals. While the political statement attracted a great deal of attention from environmental sources, it also quietly heralded a titanic shift in copper demand prospects over the next few decades – one that would bode particularly favorably for the prospects of Josemaria Resources (TSX: JOSE) (OTC: JOSMF), a Canadian natural resources company currently working on the development of its flagship Josemaria Project in Argentina’s San Juan province. In essence, a gasoline-powered vehicle is said to require approximately 25 kilograms of copper during its manufacturing process; however, the figure soars astronomically when looked at through the prism of an electric vehicle. The equivalent electric car would need nearly 80 kilograms of copper to build, largely due to the increased use of electronics and cabling included within the vehicle (https://ibn.fm/92zbC).
Passenger vehicle sales topped 77.5 million units in 2019, the last year for which normalized data is available. In an eventual future where 100 percent of those vehicles were to be electrified, automobile manufacturers would look to consume approximately 6.2 billion kilograms of copper per annum (assuming 80 kilograms of copper per vehicle); to put that astounding figure into perspective, total mined copper production in 2019 amounted to an estimated 20 million metric tons (20 billion kilograms) with Fitch estimating that global copper mine production would increase by a relatively anemic 3.1% per annum over the next nine years to 26.8 million metric tons by 2029 (https://ibn.fm/UvLJi).
The Josemaria project is a large scale, undeveloped deposit located in Argentina’s San Juan Province with proven and probable reserves of 6.7 billion pounds of copper, 7 million ounces of gold and 30 million ounces of silver. During a recent presentation at the Metals & Mining Live Virtual Investor Conference (https://ibn.fm/Z5ckG), the company revealed that its Argentina-based mine was forecast to generate an average annual production of 136,000 tonnes of copper, 231,000 ounces of gold, and 1,164,000 ounces of silver over its 19-year life span with commercial production set to commence by 2026.
The remarkable forecast for Josemaria’s annual copper production – a figure equivalent to nearly 0.7% of annual global copper production, has led the company to attract attention from the rest of the industry. A recent “Dear Retail” article (https://ibn.fm/dSYBx) speculated that Josemaria Resources was on a short list of potential acquisitions that mining giant Barrick Gold may be looking at. The article (https://ibn.fm/UUhUW) noted that Barrick currently owned a copper mine in Zambia as well as interests in two additional projects—one in Chile and one in Saudi Arabia. However, the company’s copper output was relatively small and certainly “no match for copper giants like BHP, Glencore, Freeport-McMoran and Anglo American.”
With electric vehicle sales expected to grow by 50 percent year-on-year in 2021, investment bank analysts have now predicted that global EV penetration rates could rise to as much as 31 percent of the global automotive market by 2030 (https://ibn.fm/j0l0v). In such a scenario and in a potential future where the growth in copper demand and supply present a decidedly asymmetric imbalance, a mining project with the characteristics of the Josemaria Project could present an unmissable commercial opportunity for global mining giants.
Regardless of whether Josemaria Resources chooses to develop the Josemaria project on its own or opt to recruit the assistance of a larger mining partner, the company seems to be in an enviable sweet spot – possessing an unexploited copper mining asset at the cusp of what may perhaps turn out to be one of the strongest copper bull runs in history.
For more information, visit the company’s website at www.JosemariaResources.com.
NOTE TO INVESTORS: The latest news and updates relating to JOSMF are available in the company’s newsroom at https://ibn.fm/JOSMF