3 Take-Aways From Erik Prince’s $500M Cobalt and Copper Investment Fund

3 Take-Aways From Erik Prince’s $500M Cobalt and Copper Investment Fund

Cobalt copper
January 7, 2019 by Bobby Chaim
255
Last week it was announced that Erik Prince, founder of Blackwater and brother of US Secretary of Education, Betsy Devos, is starting a $500M fund to acquire Copper, Cobalt and other resources used in the manufacture of batteries for electric vehicles. With that in mind, here are 3 take-aways from the announcement: The fund will
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Last week it was announced that Erik Prince, founder of Blackwater and brother of US Secretary of Education, Betsy Devos, is starting a $500M fund to acquire Copper, Cobalt and other resources used in the manufacture of batteries for electric vehicles. With that in mind, here are 3 take-aways from the announcement:

  1. The fund will focus on acquiring undeveloped resources and taking them into production.
  2. The continued growth of demand for electric vehicles and the upcoming shortage of mineral resources is the key premise for the fund.
  3. This announcement aligns with the 82% growth in 2018 in exploration spending in cobalt.

 

The fund will focus on acquiring undeveloped resources and developing them

  • Producers want companies with a development track record
  • Cutting-time-to-production comes with a premium
  • Essentially this de-risks the investment
  • This could create a bidding war for undeveloped resources that have previously been developed. One such company is Declan Cobalt.

Continued growth of demand for EVs and demand for their batteries is core premise of this $500M fund

  • Growth in demand for cobalt, copper and other minerals to jump by 650% by 2027 from EV battery makers alone
  • Growth will tax the ability to deliver enough resources and that creates opportunities for mineral resource companies in this area
  • Expect more such funds to be announced

This aligns with the massive growth in exploration spending in cobalt

  • As demand for cobalt and other minerals grow, exploration budgets are growing
  • Exploration budgets grew by 82% in 2018, the first year of growth in six years
  • It’s still early in this market, with big opportunities ahead potentially

To see more information on the trends driving this market, view our free report: 5 Trends that Will Drive Cobalt Stock Prices in 2019.

 

(Note: In this article we mention Declan Cobalt. Declan Cobalt is a client of TrendScan and members of the TrendScan team own options to stock in Declan Cobalt.)