Electric Vehicles and the current commodity cycle
Denis Buchanan, Emeritus Professor at Imperial College London, shares his insights into electric vehicles, his top commodities, and advice that he would give students looking to enter into the resources sector.
Dennis Buchanan is Emeritus Professor at Imperial College London. He has 39 years’ experience teaching mining geology, mineral exploration and mineral project appraisal and is responsible for the MSc in Metals and Energy Finance.
I caught up with him before his presentation at Mines and Money London.
Electric vehicles have been a key driver of this commodity cycle. What opportunities will this create?
Considered the down-stream developments in the materials science field where the electrochemical properties of both existing battery metals and other potential elements in the periodic table that could influence mineral and metal exploration investment strategy in the future.
Name the 3 commodities that you believe are currently undervalued or show the possibility for greatest upside?
EV Batteries are made up of Cell Housing, Module Periphery and Cathode requiring 29% aluminium. Cathode requires 3.1% Co and Anode requiring 9.2% Copper.
What is the book (or books) you’ve given most as a gift, and why? Or what are one to three books that have greatly influenced your life?
Given as a gift, Davis, Mark H.A. (2019) Mathematical Finance – A very Short Introduction. Oxford University Press.I read it straight through in a couple of sessions. Obviously this only allowed me to skim the surface but even on that level it works really well. It was also most entertaining – on several occasions I found myself chuckling at the turn of phrase such as the reference to the “gory details” of the sub-prime mortgage market in Chapter 8 got me onto Amazon Prime and watching “The Big Short” again.
What advice would you give to a smart, driven college student about to enter the “real world”? What advice should they ignore?
The natural resources investment community often make little distinction between mining and petroleum – both sectors are non-renewable commodity-based and are associated with products that have over the last few years demonstrated historically high levels of price volatility. There are of course similarities and differences and in reducing risk it is important to recognise the differences. Also recognise the link between inherent uncertainty associated with resource estimation for petroleum and minerals using a quantitative approach, and the manner in which these are integrated into the stochastic concepts inherent in quantitative finance.
Ignore the advice that “Cash is King” or that “It will be alright on the day so crack on with the development of the project”.
What are bad recommendations you hear in your profession or area of expertise?
Take the first job offer you get even if you have yet to complete your degree.
Dennis Buchanan will be speaking at the upcoming Mines and Money London, taking place at the Business Design Centre, 25-27 November.