Copper Will Make The Sustainable Revolution Possible According To Visionary Investors

Photo: Copper Will Make The Sustainable Revolution Possible According To Visionary Investors

The world is moving towards a very new energy mix. Over the last few years the cost of producing electricity from wind power has dropped substantially. Over the weekend Germany's wind farms produced so much electricity that rates actually went negative. That means that when someone turned on their lights in Brandenburg on Sunday morning, they were getting paid to do it.

At least in theory.

Sustainable power sources have incredible potential that we are just beginning to realize, but it will take a huge investment in infrastructure to make that potential a reality. Not only will there need to be massive amounts of new generation constructed, power grids and electric vehicles (EV's) will need to be designed, fine tuned and widely adopted. The underlying idea here is an emerging demand for high conductivity materials, and copper is a prime material for transmitting all of this new energy.

Both Gianni Kovacevic and Marin Katusa have been early to the sustainable power party, but it would appear that their faith in the advancement of human society has been well placed. Wind power isn't the only generation technology that has been coming down in price, and while Tesla makes headlines in the western world, the EV market in China is rampaging forward. These are trends that are likely in their infancy, and when the magnitude of the shift away from fossil fuels is considered in depth, a number of supply considerations emerge.

Sustainable Dragon Inc.

China's growth has surprised the world, as has their ability to rapidly adapt to a changing world marketplace. But it would appear that China is moving into the position of being the shaper as opposed to the shaped when it comes to EV's. The world's largest automobile companies appear to be alarmed by China's move away from petrol, and by the goals that Beijing is creating for their auto market. They have raised protests over the last year, but apparently, their cries have fallen on deaf ears.

The Chinese government has been working on new laws that would set firm figures on how many EV's would be required to be on the road. The numbers and timetable are large and fast, with a recent report stating that the end to gas powered vehicles in China may be close. This means that if a automobile company wants to sell its products in China, before too long, it will probably have to be an EV.

As it stands today, the market for EV's in China is expanding rapidly. In August of 2017 China saw a record 55,000 EV registrations, which represents a 68% rise when compared to the same month last year. Sadly for foreign auto makers, the vast majority of the EV's registered were made in China. Of course an EV is only as clean as the electricity that powers it, and that is a topic that dwarfs the shift towards EV's in both scale and scope.

Why Green Means Go

Building low carbon electricity has meant the need for subsidies, at least until recently. But now that both China and Europe are moving to build out a low carbon energy infrastructure, companies like Gianni Kovacevic's CopperBank could be in a position to move up in a big way. Cobalt and lithium have been market favorites recently, but copper is the element that will be needed in massive quantities, regardless of the kind of batteries used by EV's and grid back-up systems.

As Mr. Kovacevic has pointed out in countless interviews, half of the world's copper supplies comes from around 15 mines, and if there is any sort of supply problem, the copper market could fall into a deficit quickly. This is just another reason why copper prices may be poised to move much higher, and stay at levels that we currently consider expensive.

If you are interested in learning more about the changes that are happening in the world economy, the Silver and Gold Summit is a great place to be. In addition to Gianni Kovacevic and Marin Katusa, a number of other world class resource investors will be sharing their thoughts. The Summit takes place on November 20th and 21st, in downtown San Francisco, and there will be a lot of great information being shared.