1/x
Commodity cycle start or end?
Note: I am not commodity analyst, but exploration geo at the bottom of the commodity chain for metals/hydrocarbons.
Sharing some stats in the 🧵
#mintwit #commodity #batterymetals #mining
Commodity cycle start or end?
Note: I am not commodity analyst, but exploration geo at the bottom of the commodity chain for metals/hydrocarbons.
Sharing some stats in the 🧵
#mintwit #commodity #batterymetals #mining
2/x
Reading macro analysts, following arguments emerge.
Current commodity run is:
- supply chain related only
- speculation fueled
- long term secular shortage in commodities
- caused by geopolitics, sanctions etc.
- going to end soon
- going to last a decade
Reading macro analysts, following arguments emerge.
Current commodity run is:
- supply chain related only
- speculation fueled
- long term secular shortage in commodities
- caused by geopolitics, sanctions etc.
- going to end soon
- going to last a decade
3/x
I am personally watching for short term pull back, but support long term commodity price increase trend from supply shortage perspective.
Uncertainties: china, wars, geopolitics.
Below is some data supporting long term commodity bull.
I am personally watching for short term pull back, but support long term commodity price increase trend from supply shortage perspective.
Uncertainties: china, wars, geopolitics.
Below is some data supporting long term commodity bull.
4/x
Previous bull run related to China growth has seen record high investments in exploration.
Why? We had to feed the pipeline of discoveries that was seriously dwindling for years due to under-investments.
Previous bull run related to China growth has seen record high investments in exploration.
Why? We had to feed the pipeline of discoveries that was seriously dwindling for years due to under-investments.
5/x
In mining, 367 Tier 1-3 discoveries were made between 2008 and 2017.
Not bad!
In mining, 367 Tier 1-3 discoveries were made between 2008 and 2017.
Not bad!
6/x
How many Tier 1?
Only 19 😬
That is extremly low for capital spend during this period.
How many Tier 1?
Only 19 😬
That is extremly low for capital spend during this period.
7/x
Capital was destroyed in exploration during the last boom. Same stats for oil & gas.
It is simply getting more difficult to find large discoveries. Cyclicity of mining/oil industry does not help for skills growth and technology development.
Capital was destroyed in exploration during the last boom. Same stats for oil & gas.
It is simply getting more difficult to find large discoveries. Cyclicity of mining/oil industry does not help for skills growth and technology development.
8/x
You can see below that number of Giant (Tier 1) discoveries only increased slightly during the 2000-2012.
Most of projects were in Tier 3 category. Small and very sensitive to commodity prices and inflation.
You can see below that number of Giant (Tier 1) discoveries only increased slightly during the 2000-2012.
Most of projects were in Tier 3 category. Small and very sensitive to commodity prices and inflation.
9/x
When screening for development projects to invest, I can clearly see a scarcity of solid development projects (Tier 1 to solid Tier 2).
Most of them are discovered in 2008-2017 period. As we already know there isn't many.
When screening for development projects to invest, I can clearly see a scarcity of solid development projects (Tier 1 to solid Tier 2).
Most of them are discovered in 2008-2017 period. As we already know there isn't many.
10/x
Exploration will be key to bring new resources.
Unfortunately it takes years and we need to brake through poor success rates - throwing money at it won't fix it, as the previous cycle shows.
Exploration will be key to bring new resources.
Unfortunately it takes years and we need to brake through poor success rates - throwing money at it won't fix it, as the previous cycle shows.
11/x
Another alternative is very high commodity prices that make Tier 3 projects extra commercial and encourage companies to take development risks on those assets.
Probably food for small to mid size developers if they can operate multiple small assets and streamline.
Another alternative is very high commodity prices that make Tier 3 projects extra commercial and encourage companies to take development risks on those assets.
Probably food for small to mid size developers if they can operate multiple small assets and streamline.
12/x
Innovation, talent, capital are all needed if we are to meet the demand for battery metals and build back discoveries inventory.
This takes time.
Charts from Minex:
minexconsulting.com/trends-in-expl…
Innovation, talent, capital are all needed if we are to meet the demand for battery metals and build back discoveries inventory.
This takes time.
Charts from Minex:
minexconsulting.com/trends-in-expl…
• • •
Missing some Tweet in this thread? You can try to
force a refresh
