Movers and SHAKERS
Ford's Announcement is Another Reason for Copper Investors to Smile
Ford Motor is gaining on Tesla in the hearts of EV and ESG investors. The company gave both fans and investors in the growth of electric vehicle technology, along with those supporting green energy acceptance, a reason to cheer this week. The iconic company, known for its contribution to manufacturing technology one hundred years ago (1928), which made automobiles available to average families, may again make history by ushering in an era where electric Mustangs, Explorers, and even Broncos are within the price range of the American middle class. An announcement by Ford on May 26 committed the company to spend $30 billion on electric vehicle manufacturing by 2025 and for 40 percent of its global fleet to be all-electric by 2030.
The EV movement had already shifted into high gear before the announcement. And, with the strongest economies of the world now aligned in supporting carbon reduction policies, ie: electrification, a revolution has begun. As with other dramatic historical shifts in technology, investing in the components or industries that produce the goods to make the components is an ordinarily lower risk than betting on any one car company (final product).
EV growth has brought a focus on demand for the elements used to produce batteries, such as lithium and cobalt. The focus should also be on how the onslaught of demand for copper will be filled. There are many competing tech revolutions increasing the demand for the metal. New needs for copper are coming from the growth of solar and wind energy, along with EVs and EV charging stations. As it relates to just cars, here’s how just one car changes demand. An average gasoline-powered car uses about 44lbs of copper, mainly as wiring. A hybrid car uses about 88lbs, and a fully electric car uses roughly 176lbs of the metal. As part of the increased demand, add about 45lbs for each charging point.
In all, 5 times more copper than a conventional gas-powered car is needed. Copper has the best conductivity of any non-precious metal and is being called upon to electrify the green renewable energy revolution
How to Get Copper Exposure with Stocks
When the price of copper rises, copper mining companies benefit from production without increasing their costs. This makes buying miners a strategy worth considering. Yesterday Noble Capital Markets released a research note on Chakana Copper Corp. (CHKKF) and (PERU:CA). The report includes the latest company results, the analyst's views, and price targets. Also available on Channelchek related to CHKKF is the average daily volume of shares traded which is important to gauge liquidity. Up to the minute, data can also be found on Channelchek for other copper mining companies. The domestic miner Nevada Copper Corp. (NEVDF) is U.S. based mining company currently trading at $0.21 which is in the lower quartile of its 52-week trading range. Western Copper & Gold Corp (WRN) is a Canada-based exploration-stage company. It is engaged in the acquisition, exploration, and future development of resource properties. WRN is currently trading near the top of its 52-week range at $2.61.
Other copper mining candidates can be found at Channelchek.com under the “Company Data” section.
There’s a revolution going on with a move toward putting more electric cars on the road. Although Tesla tends to grab the spotlight, there are many other new car companies that are involved. Meanwhile traditional auto manufacturers all have goals to increase their EV offerings. Coupled with what is going on in wind and solar, which increases demand for copper, investors may want to look toward investing in what now appears inevitable.
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