In today’s Money Morning … commodities are the obvious moment … The demand for EV is re-creating the scene … bigger and better battery metal boom … and more …
Just over three weeks ago I stated that the next decade will be largely focused on India for Australian investors.
The previous and still evolving free trade agreement we have concluded with the country is only the first step. I expect that we will see that India will soon become a new major trading partner – just as China has been for Australia for the last decade or so.
This is one of the big trends that I think every investor should be aware of. Because if all goes as well as they could, it will probably give some of the greatest money-making opportunities you have ever seen …
As for the sectors to be monitored, commodities are clearly important.
As I said last time, coal, wool and rare earths are just some of the immediate winners. But how AFR As reported yesterday, “critical minerals” may be set to boom first.
Obviously, Barry O’Farrell – India’s High Commissioner – is going to send our booty to a state-owned Indian consortium. It is reported that this deal will lead to the fact that this unnamed organization will acquire a stake in one of our most important minerals.
If this is true, it could be the instigator of a new, India-led boom in Australian miners.
The demand for EV puts the stage back
As O’Farrell said AFR, India has one of the world ‘s largest EV industries. It will take much more raw materials to grow.
Quote the person directly:
‘It already has the world’s largest two- and three-wheeled EV industry, and it wants to challenge China in terms of battery storage. Australia, for its part, may cancel the sale of new resources.‘
For this reason, regardless of whether we see that some of these rechargeable metals will become a key program of the free trade agreement or not, we expect demand to continue. As the Indian economy continues to grow, Australian goods could become one of the key building blocks.
The icing on the cake here is also that India, as well as Australia, has quarreled with China. It seems that China is burning bridges around the world, which will open up opportunities for alternative solutions.
India’s own trade minister Pius Goyal has spoken out very rudely on the issue. How AFR notes:
‘«There is a lot of disappointment in China, ”said Indian Trade Minister Piyush Goyal. “Our deficit has grown and grown, despite the fact that our political relations are bad.
‘“There is no appetite for China left,” Mr Goyal said. China has promised investment, but instead of the roads and infrastructure India wants, China has focused on startups and technology. “They promise a lot, but they don’t.”‘
Bigger and better metal battery rod
All of this means we can probably expect a lot of mining stocks to continue to thrive. For example, lithium can continue to go crazy, as we have long discussed here Morning money.
But you should also look for opportunities in more niche metals. Materials such as graphite, vanadium and manganese are very promising but much less well known. These are just a few examples of the kind of unknown “critical minerals” that can become very valuable.
Or, as my colleague Selva explained earlier this week, old staples, such as copper, are also worth a look. This base metal, along with nickel, has long been tied to its use in battery technology.
You can read all about it here if you missed it.
The general point is that as long as there is a demand for EVs, there will be a demand for these metals. For India, if they fulfill their plans to distance themselves from China, it will leave a big gap in supplies that needs to be filled.
As I said, I believe Australia can be an ideal alternative to meet India’s needs.
And with a shaky Chinese economy now would be the perfect time for a commodity boom led by India.
Editor, Morning money
Ryan is also the co-editor Exponential stock investor, a stock newsletter that tracks promising stocks with low capitalization. For information on how to subscribe and see what Ryan is telling subscribers right now, Click here.