Gerardo Del Real
April 7, 2023
Commodity Wars. Not many have noticed but we are in the early stages of a large-scale commodity war where assets with scale, high margins, and in top jurisdictions are starting to receive billion-dollar buyout offers while the companies that have those assets are refusing to sell.
The past few months have seen an escalation in rumors and rebuffed offers.
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Rumors from late February that Tesla is considering directly buying Sigma Lithium (NASDAQ: SGML) sent the stock to new highs. Shares have tripled in the past year with no sign of slowing down.
Australia-based Liontown Resources (ASX: LTR) has been courted aggressively by Albemarle (NYSE: ALB). In late March, Liontown was offered US$3.7 billion for the flagship Kathleen Valley project in Western Australia and the Buldania Project in the Eastern Goldfields Province of Western Australia.
Kathleen Valley is a world-class lithium deposit with a Mineral Resource Estimate of 156 Mt at 1.4% Li2O. It is scheduled to go into production in 2024, and Liontown has secured offtake agreements with both LG and Tesla.
Liontown (ASX: LTR) very publicly said no thank you… we’re worth much more… stick around and find out.
And just this week, copper and zinc giant Teck Resources (NYSE: TECK) rejected an ….wait for it… unsolicited $22.5 billion bid from Glencore (OTC: GLNCY) sending Teck shares up some 20%.
There’s a giant commodities bull market brewing that’s going to continue to make fortunes for people positioned correctly. It’s not just me saying it.
BHP Xplor VP Sonia Scarselli said recently that BHP's (NYSE:BHP) program to support mineral explorers will expand beyond copper and nickel to prospective uranium and lithium projects.
She went on to say that “the mining industry in general is suffering from a decade of underinvestment in exploration and must hurry to catch up if it is to meet the demand challenges of decarbonization.”
I couldn’t agree more and am going to make sure to profit from it.
Oh yeah, gold looks ready to go after new all-time highs this year. It’s going to be a fun ride.
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Gerardo Del Real
Editor, Daily Profit Cycle