Green Metals Are the Future

Hello friends. I hope you're doing well in the markets and the markets are treating you kindly. Friends, this is a video which is in a way an extension of the video that I made yesterday about whether the metals rally is pausing, sustaining or is it over? Actually, it's loosely connected, but this will also bring up investment opportunities at later date.

I am talking about what is now called green metals. You see, once the covid lockdowns were enforced, humanity, especially urban dwellers, rediscovered the joys of hearing the chirping of birds, witnessing a whole lot of flora and fauna which they were not aware of and we went down for walks, bicycled and basically went for walks in the park.

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We suddenly realise that the air was a whole lot cleaner. Our respiratory inflammations over a whole lot less and the environment was a lot healthy. Now ESG, which stands for environmental responsibility, environmental sustainability, and good governance. I am not talking of corporate governance, but I am talking of governance from the point of view of the environment is concerned this as an idea as a concept existed even before covid hit us.

But the pandemic brought the activists out in the open and to the fore. To that extent you will recollect how recently, environmental activists actually went to court and brought a whole lot of big oil companies down on their knees, where their greenhouse gases, carbon emissions, and common footprint reduction was concerned.

The companies had to give an undertaking to the court that they would reduce the environmentally damaging emissions substantially in the absolute near term. So today's citizen is very well aware of what he wants.

He or she is aware of the risks to both themselves and their future generations and wants to avoid the threat of a disease and ill health. Now, why am I talking about this in a video, which is all about metals?

It's because the mining industry contributes approximately 10% of global warming, it is a polluting industry. You have to dig into the bowels of the earth, bring out a whole lot of a task and sludge and a whole lot of environmentally polluting particles along with the metals, of course, and you're burning a lot of energy to be able to dig into the earth itself. So you are letting out a whole lot of carbon into the atmosphere.

So 10% of the global warming in the universe is contributed by the mining industry. Now just like a certain segment of the population insists on eating organic fruits and vegetables, fruits and vegetables, that are cultivated without the use of pesticides and harmful chemicals, they are even willing to pay a premium for consuming such foods, there are industries, there are companies.

Apple comes to the fore as a frontline big ticket, tech company which is very conscious about where the metals that they are buying to manufacture their telecom hardware is being sourced from. How it is mined. How it is produced, how it is being put in smelters, the mining companies really polluting the atmosphere beyond permissible levels. If so, Apple refuses to buy metals from such companies.

So environmental awareness, even in the mining industry, is now getting to be a widespread feeling just like your conflict diamonds. A certain segment of the population absolutely refuses to buy conflict diamonds because of humanitarian reasons.

So big companies like Rio Tinto, BHP Billiton now these are marquee names in the global mining industry. Now these are companies that are making sure that they are going to be environmentally conscious and restrict the pollution so as to adhere to the lofty standards, which are demanded by companies like Apple.

Now within the metals, the greenest possible metal is aluminium. The reason why I am saying it's green is because it can almost entirely be recycled. There is no lost in recycling aluminium and recycling existing aluminium pieces saves 95% of energy as compared to mining new supply of aluminium.

To that extent other metals that are green are cobalt, stainless steel, and tantalum. Now they are also almost 100% recyclable but the problem lies in how their mined and how the smelters procure energy to provide heat to make these metals in the process of kind of putting them into bars ingots, wires, etc.

So the future will entail companies basically deriving and devising ESG compatible methods to produce these metals. Will it drive up costs? Are organic fruits and vegetables more expensive than inorganic ones? Yes, yes, of course.

Now all these processes are going to be cost accretive which is why I think a part of the reason why metal prices have gone up is also because of adhering to some amount of ESG. It's not a widespread process yet, but we are getting there and the more you get there, the more you will see that the price cost addition is adding on to the manufacturing cost, which, partially, I'm using the word partially here, explains why cost of making and procuring metals is going higher.

It's not the supercycle, which I don't subscribe to anyway. I will admit that we are in a bull market where industrial or base metals are concerned. Now easy money printing, ESG, green metal technology, etcetera are the reasons why prices going up.

I believe in a 360 degree world view, and I have always told you in my videos everything happens in the financial markets for a reason and because these markets are financial, the reason itself must be financial.

So there you have it. I've shared my ideas about what is making metal prices go up. What are green metals? How in the future you will be buying products, especially cell phones, watch straps, etcetera, etcetera, which will be stamped ESG compatible or green products just like to have vegetarian and non-vegetarian foods being marked with red or green dots. I hope this brings you up to speed with metals of the future. Green and red.

With this, I bid goodbye to you in this video not before reminding you to click like on this video if you liked what you saw. Click on the bell icon to receive instant alerts about fresh videos being put up out here.

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I wish you have a very, very profitable day. Thank you for your patience and till we meet again in my next, this is Vijay Bhambwani signing off for now.

Take care. Bye.