John Lee: World Demographics Will Derail the Commodities Supercycle
Tom welcomes back, John Lee, President and CEO of Silver Elephant Mining and Director of Battery Metals Royalties Corp.
John discusses how coal has been a number one commodity worldwide recently. While many want to get away from coal, it continues to persist. Many less developed countries simply don’t have any other alternatives. He is also cautious on uranium because as the number of operating nuclear reactors continues to decline. It takes many years to build a new nuclear plant, while a coal plant can be online in just a couple of years for a reasonable price.
The resource business is rapidly changing and ESG is becoming a big factor in the industry. ESG programs bring many government incentives, but also considerable strings. The playing field for these policies need to be fair and level.
The sanction policies against Russia are only creating wealth for middlemen who can maneuver around these edicts.
John discusses how difficult the silver market is to assess and forecast. Often it doesn’t trade on fundamentals, and investment demand is mostly a retail market. Also, there is a lot of substitution of the metal with cheaper alternatives. It’s probably best to look at how gold is performing to see where silver will head. The silver market could remain irrational for some time.
He believes the dollar may continue to have strength as most other currencies will fare poorly. He is not a dollar bear at this time.
John notes the tightness in the nickel market and why that is likely to persist. Companies like Tesla need huge amounts of nickel. Elon was the first to secure supply direct from producers a couple of years ago. Now, other companies are following suit. There is a lot of speculation in the sector, and we witnessed what can happen during a major short squeeze. Newer battery technology could offset some of the nickel demand, but that will take time. Governments aren’t likely to interfere in the nickel markets because they need this to meet their green energy goals. Nickel has very interesting dynamics, and John remains very bullish on this metal.
Lastly, he discusses his thoughts on the bond markets, debt and interest rates. Problems are going to manifest as the ten-year yield has broken out of it’s forty year trend.
Time Stamp References:
0:00 – Introduction
0:37 – Coal and Uranium
4:48 – Green Energy
8:15 – E.S.G. Trends
15:19 – Russian Sanctions
19:34 – Silver Markets
25:09 – Gold, Silver Ratio
27:37 – Euro, Yen, & Dollar
31:29 – Commodity Supercycle
37:36 – The Nickel Squeeze
48:34 – Nickel Demand
54:27 – Rates & Inflation
1:01:06 – Wrap Up
John Lee, CFA, is CEO and President of Silver Elephant Mining and Director of Battery Metals Royalties Corp. He is an accredited investor with over twenty years of experience in mining. Mr. Lee specializes in M&A, and he has negotiated and financed Pulacayo silver acquisition (Bolivia) in 2015, Gibellini vanadium (Nevada) in 2017, Sunawayo silver (Bolivia) in 2020, and Minago nickel (Canada) in 2021. John graduated from Rice University with bachelor’s degrees in Economics and Engineering.