Fundamental Research Corp. Report on Battery and Critical Minerals


  • The Electric Vehicle (EV) revolution, fueled by the pursuit for a greener planet, is expected to impact the supply chain of multiple commodities. The most commonly discussed EV-related commodities are nickel, cobalt, lithium, and graphite. In this report, we review three relatively under-followed commodities - Rare Earth Elements (REEs), niobium, and fluorspar. EVs are expected to be their biggest long-term demand driver.

  • We are projecting a large supply deficit for REEs and fluorspar; both are currently used in EVs. Niobium demand is currently driven by steel, but niobium batteries (which are under development), if commercialized, will push the market to a significant supply deficit. Commodity price projections are beyond the scope of this report.

  • EV sales surged 168% YoY, to 2.65M, in H1-2021. The International Energy Agency (IEA) forecasts 145M EVs on the road by 2030, up from just 11M in 2020.

  • Neodymium-Iron-Boron rare earth magnets (NdFeB or neo-magnets) are an essential component of EVs, due to their superior strength per unit weight and volume. Each EV requires approximately 10 kg of REEs.

  • Fluorspar’s use in EVs is currently a niche market. In Lithium-Ion Batteries (LIBs), fluorspar is used along with lithium as the electrolyte. An EV battery is estimated to contain 0.9 kg of fluorspar. There are ongoing studies for the development of Fluoride-Ion-Batteries (FIBs). Although FIBs are far from commercialization, preliminary tests indicate superior results.

  • Niobium has a wide range of uses from jet engines to superconducting magnets. Studies indicate that niobium-based EV batteries enable faster charging times, longer range, and improved safety for LIBs.

  • China is the largest producer of REEs and fluorspar. Brazil is the largest producer of niobium. China’s dominance, and rest of the world’s reliance on China, are prompting North America to take initiatives to improve the global supply chain of battery and critical minerals. We believe high-quality REEs and fluorspar projects outside China will be sought after.

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