Two-tier market for raw materials: BHP Group, Power Metallic Mines, BYD

BHP Group and BYD continue to focus on sustainability

Anyone buying an electric vehicle today wants comfort, driving pleasure, and a positive ecological footprint. This was already evident several years ago in the EIB Climate Survey conducted by the European Investment Bank. At that time, 67% of respondents said they would opt for an electric or hybrid vehicle when buying their next car. Additionally, 78% of respondents believed they were "doing everything they could to combat climate change" in their everyday lives. Even though the figures certainly look a little different today - after three years of recession, war, and fears about the future - the motives for buying an electric vehicle are still heavily shaped by climate protection. Clean sources of raw materials and appropriate supply chains are crucial. Mining companies like BHP Group have been investing in more sustainable mining methods for years. Automakers like BYD are not only diversifying their sources of raw materials, but also focusing on minimizing the environmental footprint of their supply chains. In this context, BHP has even proposed a two-tier pricing system for raw materials – suggesting those who produce sustainably should be able to command higher prices.

The electrification of mines – Power Metallic Mines is ready to connect

In practice, such a system has long been established in free markets. As industrial companies are required to disclose their supply chains in terms of CO2 emissions and the issue of supply security is becoming increasingly acute due to tariffs and other trade barriers, certain raw material companies have long been able to charge higher prices than others. The fact that this development is continuing despite the current challenging market conditions is demonstrated by the recently announced cooperation between BHP, BYD and CATL to electrify mine operations and significantly reduce diesel consumption. Together, the three companies aim to advance the use of battery-powered engines even for heavy mining vehicles and locomotives.

The joint strategy makes sense for both BHP and BYD: The fields of activity of both companies are increasingly overlapping. Mining companies are increasingly focusing on the production of intermediate products for industry, as these promise higher margins. Major industrial companies are also increasingly investing strategically in mining to secure access to raw materials and ensure that their production facilities do not come to a standstill due to supply shortages. The Canadian mining company Power Metallic Mines is well-positioned in both directions.

Top geology, infrastructure, and tax advantages: NISK is more than just nickel

The core business of Power Metallic Mines, which was called Power Nickel until a few months ago, is resource exploration. The focus is on the NISK project in Quebec. The property offers high-grade polymetallic deposits including nickel, copper, cobalt, platinum group metals, and precious metals. Power Metallic aims to make NISK Canada's first CO2-neutral nickel mine. The conditions are favorable: the project offers high metal grades just below the surface, good infrastructure such as roads, railways, and clean hydroelectric power. The location in Quebec, where the government reimburses up to 50% of exploration expenses through tax credits and the overall business environment for mining companies is also very supportive, also speaks in favor of NISK and Power Metallic Mines. All in all, the conditions are ideal for making a positive ecological impression on potential partners and ultimately on the market.

In early 2025, Power Metallic Mines raised CAD 50 million to finance its ongoing comprehensive exploration program. After reporting positive geological sample results in the summer, the Company expanded the NISK project by acquiring an additional property. There are now increasing signs that Power Metallic Mines could also mine palladium and platinum economically in addition to nickel, which the Company believes is a unique selling point. Demand for nickel and copper is strongly driven by e-mobility, while platinum group metals are used in fuel cells, medical catalysts, and modern electronics.

Are Power Metallic Mines shares interesting again after a breather?

In the long term, analysts expect nickel demand to continue to rise. According to the McKinsey Metals Report, demand for high-purity nickel, which is what the NISK project stands for, could outstrip supply by 15% annually until 2030. After a rally in the first quarter, Power Metallic Mines shares have fallen back. The ongoing drilling program, the promising prospects for the NISK project and the trend toward sustainably mined raw materials should continue to support the share price.