There’s a lot going on in the world of battery metals. Back last November, The OP asked about ETFs covering Lithium mining, but it seems that all minerals used in green technology are experiencing something of a boom at the moment.
In Australia, Orocobre and Galaxy minerals have just announced a merger to create a “global lithium chemicals company”. I had the latter on my watchlist for several months and it has risen from 0.7 to 3.84 over the last year or so. However, I already had significant exposure through ALB, the big USA based company so I have not so far bought in. Ah, the wisdom of hindsight. See
https://www.mining-technology.com/news/orocobre-merger-deal-galaxy-resources/More generally, the L&G BATG battery supply chain ETF continues to rise steadily, trading at about 1340p compared with 600p a year ago. I looked at this a while back, when its biggest component was TSLA at about 10% and concluded that much of BATG’s increase might be due to the fact that TSLA alone had increased several hundred percent, pulling the whole fund up with it. However I see that TSLA is now in 9th place at about 3.54%, which seems altogether more reasonable. The top two slots are occupied by Pilbara Minerals and Galaxy Resources, mentioned above. At 6.38% and 4.74% respectively. According to L&G’s factsheet, BATG mirrors the “Solactive Battery Value-Chain Index Net TR USD”, in which
The Index is comprised of (sic) companies which are publically traded on various stock exchanges around the world that are either (i) mining companies that produce metals that are primarily used for manufacturing batteries or (ii) companies that develop electro-chemical energy storage technology (i.e. battery technology) and produce batteries. A “battery” is a device consisting of one or more electro-chemical cells that are capable of generating electrical energy from chemical reactions. A company is only eligible for inclusion in the Index if (1) it is of a sufficient size (determined by reference to the total market value of the proportion of its shares that are publically traded) and (2) it is sufficiently “liquid” (a measure of how actively its shares are traded on a daily basis)further,
On a monthly basis, the weight of each company is assessed and, if any of them exceeds 15% of the Index, the weights of all companies are adjusted so that they are again equally weighted within the Index.Nice to have a definition of what a battery is, but otherwise it’s little bit inscrutable as regards “sufficient size” and “sufficiently liquid”. Anyway, if it is equally weighted, like they say, I do not see how TSLA ended up comprising 10% of the fund at one point.
In case you are thinking that this is all about Lithium, there’s significant activity going on in the Nickel, Cobalt and rare earths sectors. See the discussions in this board on PRE and RBW. The article below highlights some startup nickel miners in Canada along with more on Lithium see
https://www.mining.com/battery-metals-snapshot-eight-companies-developing-critical-metals-for-the-future/I haven’t investigated any of these in detail, so DYOR and you never know, there may be winners among them. That said, I think that a post Covid boom in renewables along with widespread money printing by central banks carries a significant risk of boom-bubble-bust in the longer term, so make hay while the sun shines.
Poseidon, here we come!
S