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Anthony Milewski: Nickel Just Shot Up 10% In One Week!

Anthony discusses the recent move in nickel that followed the LME Week in London. The themes tend to change from year to year and this year electric vehicle battery metals were a core focus. Nickel sulfide was of major interest with a significant deficit being projected. Newer battery chemistries in development are increasingly reliant on nickel. The price moves are real and are currently factoring in actual demand that exists in the market today.

The lithium market is also extremely tight. If you agree with the consensus view on E.V. penetration rates, then the cobalt is a market is already going into deficit.

Copper is also attractive as there appears to be a deficit looming in 2019. This growth seems to be coming from improving worldwide economic conditions. 6% to 10% of future copper demand will come from electric vehicles. This doesn’t count any upgrades needed to the worlds electrical grids. He thinks large investment funds will be pushed towards copper and the price could exceed that of the last commodity supercycle.

The nickel market is bifurcated into two classes. There is low-grade class 2 nickel called pig iron this is relatively abundant. Class 1 nickel sulfide deposits are rarer and are what the chemical industry needs for batteries. These deposits are fewer in number and far more constrained.

Anthony discusses the various small, large and mid-cap companies that he likes in the nickel space. He prefers the leverage you get from small-cap companies, but there are greater risks. He feels the best strategy is to invest broadly across the space.

Talking Points From This Week’s Episode
• Battery technology and E.V. growth will demand additional class 1 nickel.
• Copper is likely to rise as worldwide GDP improves.
• Additional copper is needed in electric vehicles manufacturing.
• Cobalt market is already entering a deficit and the lithium market is extremely tight.

Mr. Milewski is the Chairman of Cobalt 27 and an MD at Pala Investments. He has spent his career in various aspects of the mining industry, including as a company director, advisor, founder, and investor. In particular, he has been active in the battery metals commodities including investing in nickel, lithium, and cobalt and actively trading physical cobalt. In 2016, one of the industry’s leading publications, “The Mining Journal,” named him as a Future Mining Leader.

Mr. Milewski has managed numerous mining investments at various stages of development, including exploration, development, production and turnaround situations, and across a broad range of commodities. He has served as a director of both public and private companies. Mr. Milewski is a member of the investment team at Pala Investments Limited, and prior to joining Pala Investments, he worked at Firebird Management LLC.

Mr. Milewski previously worked at Renaissance Capital and Skadden, Arps, Slate, Meagher & Flom LLP in Moscow, where he focused on advisory and transactional work in metals & mining and oil & gas sectors. He has lived and worked in Africa and Russia, including a year as a Fulbright scholar, and has spent considerable time in Central Asia.