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Tech Metals Insider Introduction

Wednesday July 31, 2013 13:32

Editor's Note: The demand for new gadgets like smartphones, tablet computers and even electric cars is generating a lot of interest in the tech metals industry. This relatively new group of metals and minerals is a combination of precious metals and rare earth elements. Kitco News sees the need for reliable information about this growing commodities sector. For this reason Kitco has partnered up with Bodo Albrecht an independent analyst with 20 years of experience in the precious metals industry. Stay tuned for this weekly new feature on kitco.com! Tech Metals Insider - one more reason to come to world's premier gold site.

Welcome to Tech Metals Insider, a new series on facts, figures, history, applications and trends of technology metals. A blog series aimed at demystifying rare earths, specialty and precious metals by explaining their uses, markets and trends in plain English.

What are technology metals? The term is used in different ways by different people. I will use it to collectively describe metals that are primarily used in industrial applications. This includes precious metals, specialty metals and rare earths. The three groups are inseparable, and with emerging technologies such as mobile communication, electric vehicles and fuel cells demand for the latter two has exploded. This movement is irreversible, it is likely to continue but alas, outside of ETFs containing shares of metal producers the metals themselves used to be inaccessible to the investment community. Until now.

In this series, let me take you on a journey of understanding the world of technology metals, meet the people that drive it and learn about trends and technologies. The series is geared at investors wishing to participate in these developments, be it by making better decisions in the precious metal markets or by expanding portfolios to new metals and materials with similar qualities.

The earthquake yet to come will be caused by the automotive industry which today uses 80% of all platinum group metals (platinum, palladium and rhodium) as well as a fair share of specialty metals and rare earths in electronic components, LEDs and such, as well as ever-increasing quantities of battery materials in hybrid, electric and hydrogen powered vehicles. As one of BMW’s “Electronauts” I was able to gather first-hand experience on the pros and cons of electric vehicles. That’s mine in the picture.

As a result I was drawn into a circle of like-minded pioneers, researchers and writers debating whether electric or hydrogen might be the way of the future. Would this be a battle of the giants, like VHS vs. Betamax? Each would have significant impact on metal markets:

  • Either way, the conventional combustion engine is on the decline: smaller size, higher fuel economy, supplemented by KERS (kinetic energy recovery systems that turn the friction of your breaks into electricity) and electric hybrid engines mean smaller and much less catalysts than in the past. Not tomorrow, of course, but not too far out either.

  • If the electric vehicle is the answer then battery materials will see a shortage, and become very valuable.

  • If it’s hydrogen then the world will need platinum or palladium again to produce membranes that enable the engine to operate. Still, hydrogen vehicles are likely to require batteries for energy storage.

But does it have to be an either – or? Or is there a market for both, will the technologies coexist? What role does the housing market play where fuel cells have made an entrance as well? What about the electric plane that just circled the planet? The dynamics of these developments are incredible, they will change our world, our lives, and they will most certainly worthwhile to participate in as an investor. Many reasons to join me in this journey.

Who am I? I am Bodo Albrecht who, after 20 years with one of the largest precious metals company in the world launched BASIQ, a consulting business supporting the industry with market intelligence, security solutions and metal management tools. I am a geek, I like things that are fast, and I have a passion for precious metals. I’m the one who, two years ago, told Kitco News viewers it was time for the precious metals industry to prepare for rain after the sunny days (pardon the quality, it was an ad-hoc interview Daniela surprised me with).

And guess what – it’s raining, and people are looking for their umbrellas. The good news: the sun will shine again. Make sure you’re around when it happens!

By Bodo Albrecht
tminsider@eniqma.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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