It’s been a frenetic couple of days for Australia’s energy future.
Things kicked off with the 2023 budget and Labor’s new $2 billion hydrogen fund. It’s a policy that’s small, but an important step toward further developing a localised hydrogen economy.
We’re sure Andrew Forrest, with all his hydrogen ambitions, is happy with that.
Then there was Dutton’s budget response, once again pushing for a new nuclear agenda in Australia — a push that seems to finally be lifting the taboo nature of the topic.
Whether we’ll ever see a proper nuclear option on the table still seems like a pipedream…but at least the discussion is being had.
And then there’s the mega-merger between lithium miner Allkem and lithium processor Livent. With a $15.7 billion valuation, it will make this corporation the third-largest lithium producer in the world.
Three very different developments for three competing energy solutions.
So, should you be jumping back into lithium stocks?
Maybe take a chance on uranium miners again?
Or bet the house on the few hydrogen plays available on the ASX?
You certainly could. Or you could choose to invest in the one material that is imperative to all three…
More solutions means more copper
As I mentioned yesterday, copper is still king when it comes to metals.
This common but important material is quickly becoming a scarcer resource than most realise. That’s because demand is not only picking up from sectors like new and renewable energy, but also due to waning supply.
Bloomberg covered the situation pretty succinctly last week, talking to several copper insiders. As one independent geologist put it:
‘There’s no way we can supply the amount of copper in the next 10 years to drive the energy transition and carbon zero. It’s not going to happen,
‘There’s just not enough copper deposits being found or developed.’
This is why Bloomberg estimates demand for copper will outstrip supply. By 2040, they expect to see a 53% increase in the need for refined copper, whilst we’ll only see a 16% improvement in mine supply.
In other words, there is a huge shortfall that is inevitably going to push up prices.
Worse still, the few new mines that are planned are taking longer than ever to bring online. As Bloomberg reports again, the average development time is now more than 10 years:
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| Source: Bloomberg |
All these factors should stress to you just how dire this situation is. Because as our own ex-geologist and commodities expert, James Cooper, is telling people: copper is the sector to invest in right now.
No metal is more important and more at risk of a shortage than it currently.
Red drought
Like I said yesterday, James has been all over this story for a while now.
He saw the signals, saw the market issues brewing, and saw the opportunity…
That’s why you need to listen to what he has to say right now!
Because as the mainstream starts to realise what James already knows, a handful of Aussie miners could be set to takeoff in share price. In James’s own words:
‘Like the last drops of water drying up in a heatwave, the world could soon wake up to find THE metal it can’t live without…is in critical short supply.
‘If that happens — or rather, WHEN that happens — I think there are several stocks that should be top of your watchlist.
‘They’re all Aussie listed…with great long-term prospects.
‘But short term, they’re EXACTLY the kind of stocks the “late money” — that is the speculators, punters, gamblers — could flood into as this story tips into the mainstream news.’
This is why this copper boom is set to be unlike any other, one that’s driven by the compounding forces of not only demand but also supply.
So, if you haven’t already, check out James’s full story on the matter.
A deep dive into why copper is so important, and why it should be a part of your investment portfolio. Because it just might be the best investment decision you’ll make all year…
Regards,
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Ryan Clarkson-Ledward,
Editor, Money Morning
