Metals & energy transition: copper, lithium, nickel

Copper is the key metal of the energy transition, alongside steel. Properties: excellent electrical and thermal conductivity, malleability, corrosion resistance. No credible short-term alternative.

Exploding usage: - Electric vehicles (EV): an ICE car contains 23 kg of copper, an EV contains 80 kg (×3.5). With 50+ million EVs sold/year in 2026 (+30 %/year), auto sector copper demand rises from 2 to 5+ Mt/year by 2030. - Electric grids: renewables (wind, solar) are decentralized, requiring long-distance electricity transport via copper cables. +20 Mt cumulative by 2040 per IEA. - AI data centers: each hyperscale data center consumes 100-500 tons of copper (high-density cabling, liquid cooling).

Supply side: 60 % of global production comes from Chile and Peru. No major new deposits discovered since 2010, existing ones aging. Goldman Sachs and Citi anticipate a structural deficit from 2025-2026, projecting $7,000-12,000/ton (vs ~$9,500/ton in April 2026).

Listed players: Freeport-McMoRan (FCX), Southern Copper (SCCO), BHP, Rio Tinto, Antofagasta (ANTO), Glencore (GLEN).

A modern EV battery (NMC 811 or LFP) contains: - Lithium (Li): ~10 kg per vehicle. Demand tripled between 2020 and 2025. Top producers: Australia (50 %), Chile (24 %), China (15 %). - Nickel (Ni): 40-50 kg in NMC chemistry, 0 kg in LFP. The shift to LFP (BYD, Tesla) reduces per-unit nickel demand. - Cobalt (Co): 5-10 kg in NMC, 0 in LFP. 70 % of global production comes from DRC (Democratic Republic of Congo), 80 % refined in China. Risky concentration.

Chemistry evolution: - NMC (nickel-manganese-cobalt): high energy density, expensive, first-gen Tesla, BMW, Mercedes. Losing share. - LFP (lithium-iron-phosphate): less dense, cheaper, more stable, no cobalt. Dominant in China (BYD), adopted by Tesla Model 3/Y standard. Global market share went from 30 % in 2022 to 55 % in 2025. - Sodium-ion: emerging alternative, no lithium. Commercialized since 2024 by CATL in China for low-end vehicles.

Price impact: lithium went through a dizzying cycle — from $80,000/ton early 2023 to $10,000/ton late 2024 (post-Chinese EV bubble crash) then stabilization at $13-18,000 in 2025-26. Very cyclical.

Listed players: - Lithium: Albemarle (ALB), SQM (SQM), Ganfeng Lithium, Tianqi Lithium - Nickel: Vale (VALE), Norilsk (sanctioned), BHP - Cobalt: Glencore (GLEN) — dominant global player

3 approaches, by increasing risk:

1. Diversified metals ETFs (lower risk): - iShares S&P GSCI Base Metals (BMET): copper, aluminum, nickel, zinc exposure - WisdomTree Industrial Metals (AIGI): same basket - Global X Lithium & Battery Tech (LIT): entire lithium ecosystem (miners + battery producers) - iShares MSCI Global Metals & Mining (PICK): 200+ mining companies globally

Accessible via standard brokerage, not PEA. Fees 0.30-0.70 %/year.

2. Mining majors stocks: - BHP — world's largest mining group, copper, iron, nickel, coal exposure. ~5-8 %/year dividend. - Rio Tinto — #2 globally, iron + copper + aluminum + lithium (2024 Arcadium acquisition). - Glencore (GLEN) — copper + cobalt + trading leader. - Freeport-McMoRan (FCX) — pure-play US copper. - Eramet (ERA, PEA-eligible) — nickel + lithium, French stock.

3. Junior miners (risky but leveraged): Small exploration companies developing a single deposit. Can 10-50× on confirmed discovery + major partnership. Can also disappear. Reserve to max 5-10 % of metals-dedicated portfolio.

Pragmatic recommendation: for 90 % of retail investors, a mix of Eramet on PEA (5-10 % of PEA) + BHP / Rio Tinto on standard brokerage (5-10 % of standard brokerage) gives balanced exposure to the energy transition theme without excessive individual risk.