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G7 Summit: Countries to Switch To Electric Vehicles

June 11, 2021

Over the last 24 hours the Group of Seven countries (G7) have met to discuss targets to switch to electric vehicles.

We think this switch to EVs will be the biggest global wealth creation event since the industrial revolution, oil, railroads, the internet and mobile phones.

The raw materials required for the world’s migration to EV’s needs to come from somewhere.

We are investing in and holding a few companies that plan to produce the materials to make the EV batteries vision a reality, specifically in Europe – the fastest continent to commit to the EV switch.

Here are our three investments in the EV battery metals space:

Vulcan Energy Resources (ASX: VUL)

Euro Manganese (ASX: EMN)

 European Metals Holdings (ASX: EMH)

Over the last 24 hours we have seen increasing mainstream media about the worlds shift to electric vehicles as the G7 countries (Canada, France, Germany, Italy, Japan, UK and the USA) hold a key meeting to discuss their shift to greener vehicles by the end of the decade, as part of a package of measures to combat climate change.

A G7 commitment to a majority of electric vehicles by 2030 will further put pressure on the supply for EV battery metals like lithium and manganese.

Our investment focus: Battery metals in Europe

The European Union’s new “Green New Deal” aims to make Europe climate neutral by 2050. It is leading with electrification of its vehicle fleet.

Europe is the heartland of automakers and all of them are switching to producing EVs.

At Wise Owl, we research and invest in ASX stocks and one of our key investment themes is the new European electric vehicle industry that is growing before our eyes.

Our current European battery metals investments are:

Vulcan Energy Resources (ASX: VUL)

Euro Manganese (ASX: EMN)

 European Metals Holdings (ASX :EMH)

We like to keep up to date with how our investments are impacted by industry and news events.

Here is what has happened just in the last couple of weeks that could provide tailwinds for our investments:

What does this all mean for our European battery metals investments?

Vulcan Energy Resources Ltd (ASX:VUL; FRA:6KO)

VUL is developing Zero Carbon Lithium in Germany, to supply Europe’s rapid shift to battery metals.

VUL continues to impress and just hit a five month high, and a very healthy looking chart that has shaken off a $6.50 capital raise and some “sell in May” weakness:

Joe Biden’s announcement that the US will look to Europe for battery metals supply will exacerbate the global EV metals crunch.

The raw materials to build all these EV batteries have to come from somewhere…

VUL has achieved 90% recovery rate on its recently operating direct lithium extraction (DLE) pilot plant.

This is a key step towards large scale production and will provide key data and proof for the definitive feasibility study and most importantly produce lithium samples for potential offtake partners.

European Metals Holdings Ltd (ASX:EMH; AIM:EMH; NASDAQ:ERPNF) 

EMH is developing the largest hard rock lithium resource in the European Union and its project is at an advanced stage of development.

EMH is racing to become the first local EU battery grade lithium producer to deliver to an emerging local industry.

This week, in a development that triggered a near 10% share price uptick, EMH engaged Minviro, a UK-based and globally recognised sustainability and life cycle assessment consultancy to provide an ISO compliant life cycle assessment (LCA), including a carbon footprint evaluation, of the Cinovec lithium/tin project in the Czech Republic.

EMH now appears to have broken a recent downtrend and appears to be back on the up.

EMH’s Cinovec project is located in the northern Czech Republic, in the epicentre of over a dozen new and planned lithium-ion battery factories, on the doorstep of dozens of potential customers.

As we wrote last week, VW and EMH’s project partner CEZ are talking about building an electric vehicle battery factory in the Czech Republic – just 64km away from EMH’s lithium project.

This looks very promising, and we hope it means that EMH is getting closer to a coveted offtake agreement for its lithium.

Euro Manganese Inc (ASX:EMN; TSX-V:EMN)

Our Czech manganese investment EMN is also very close to EMH and the proposed new battery factory site:

EMN is developing the Chvaletice Manganese Project.

The company’s plan involves the re-processing of Europe’s largest manganese deposit hosted in historic mine tailings in the Czech Republic.

EMN aims to produce high-purity manganese products in an economically, socially and environmentally-sound manner. It will be recycling waste to produce highly refined manganese products.

EMN’s Manganese Project stands to become the only primary producer of battery grade manganese products in Europe, with the potential to provide up to 50% of projected 2025 European demand for high-purity manganese, and 28% of its anticipated 2030 requirements.

Both Tesla and Volkswagen have stated high purity manganese is their preferred alternative to cobalt in electric vehicle batteries.

EMN has been consolidating around the 50c mark for almost 5 months now:

This Wall Street Journal story is now a few weeks old, however it highlights the growing demand for battery metals:

It looks as though all our battery metals companies could be in the right place at the right time with highly sought after projects.

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S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this report is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

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The information contained in this report is current at the finalised date. The information contained in this report is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

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