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On Today's Bloomberg Intelligence Show, we dig inside the big business stories impacting Wall Street and the global markets.
Each and every week we provide enough research and data on some of the two thousand companies and one hundred and thirty industries our analysts cover worldwide.
Today we'll take a look at how one company is looking to fix your terrible board meetings.
Plus we'll discuss how the energy transition will drive a significant uptick in demand for metals.
But first, we got the Olympics coming up this summer in Paris. How cool was that going to be? But good luck try to get a hotel room there or trying to get accommodation to anywhere. You know, who would know about this stuff. Airbnb. Dave Stevenson joins us. He's the chief business officer for Airbnb. Dave talked to us about your business in Paris for this summer. What are you guys seeing.
You know, one of the great things about having airbnbs in Paris is that the actual the volume of airbnbs have gone up pretty dramatically. We have forty percent more active listings than we had a year ago. And by having those extra listings, we're actually able to keep prices reasonable because we're able to add so much capacity to the stays there. So there are still places available. You know, we're only twenty four days out, but you know you
can keep booking. There are airbnbs ready for guests to come from around the world.
Yeah, because you know why everyone's leaving Paris. Yeah, all the preachers to like, get me out of here, and they're going this outh of France anyway, sorry, go ahead.
So David, well, it's how bad they're actually able to earn, you know, two thousand euros on average for a host in Paris, and so yeah, many people do leave and share their homes and welcome people from other countries to come to the vilops.
Talk to us about where the where you're seeing travelers come from to Paris.
Yeah, it's interesting. Some of our top countries are the US, UK and actually people from other areas of France coming into Paris for the Olympics. We're also seeing some interesting trends where people are staying. You know, the Olympics are actually not only in Paris, They're kind of spread around the country and so you know, we're seeing people staying in airbnbs in Lelle where some of the basketball is
being played. You know, We're seeing them in Leone where some of the football, you know, soccer matches are being played. You're seeing Spaniards and Brazilians stan Bordeaux because their national teams will be playing soccer out there. So we're not just seeing people come in Paris, They're staying in airbnbs all around the country.
That's interesting. I did not know that you also transition recently from CFO to CBO. Is that so chief financial officer to Chief business Officer?
How is that?
Like?
What how does your job change with that title?
Yeah, no, I'm the Chief Business Officer I'm also the head of Employee Experience, so the head of HR, which I've been doing now for three years, but the chief business officer, you know, I'm focused on growth of a
company and expanding into new and new business areas. So we're expanding beyond the kind of core stays business here at Airbnb into things like services and experiences over time, and so me and my team, that's what we're focused on, growing the existing business and expanding into new ones.
So for just the business in general, how is travel this business as we crank up here in the US for fourth of July, and then of course in Europe they have their big travel during the summer, particularly August. Give us a sense of kind of where you're seeing the business these days.
Yeah, you know, we're seeing more people travel this summer than they ever have before on Airbnb. Continency, great growth, yes, strong growth, especially from your Americans travel to Europe. You know, we continue to have a strong dollar, which enables strength there, and we're actually seeing you nice strength and people even traveling from US into Asia.
US into Asia, okay, which is not rippin' dollar. Yeah, you just won't even go anywhere pretty much. What about the opposite, is anyone coming to the US. We're making any money on Airbnb here in the US anymore.
Absolutely.
I mean, the people are still traveling from overseas in the US. You know, actually the majority of our travel still is actually domestic travel in any given country. So we're kind of talking a lot about people moving around the world, but a lot of the travel is just people going. You know, in the US, it's a lot of beach destinations. You're seeing great traveled down to Florida, up onto the East Coast, you know, onto the Jersey
Shore and other places. So you know, people are still traveling out to the beaches to visit with family and enjoy the fourth of July.
Dave, what's a typical or prototypical Airbnb customer look like?
You know, there we have customers of all kinds. You know, it's everything from young gen Z, millennials to families. You know, a large number of our people in travel in airbnbur group travel. Multiple people travel together because you get more you might get multiple bedrooms, you have multiple amenities, often with a kitchen, you know, maybe a washer and dryer. It's one of the things reasons why we've recently launched some of these group travel features to enable more people
to stay together more easily. We have things like shared Wishless, shared messaging capability, and that's helping in Paris where over fifty percent of the people traveling to the Paris Olympics have three or more people, and so the group travel is a key benefit of staying on Airbnb.
That's a good point. What are there trends that you're you think you're going to be dealing with in twenty twenty five, kind of after we get through the Olympics.
You know, I think we're going to continue to see strength and travel. I think one of the things we've seen since the pandemic is that people realize how much they miss being able to kind of travel, be with family and friends, that experiences are maybe more important than things. I think that trend will continue, and we're going to see people wanting to spend time with family and friends doing things together.
So that's the big.
Trend that we'll see in twenty twenty five, continued experiences.
Our Thanks to Airbnb Chief business Officer Dave Stevensim.
We now moved to the cloud space. ZECH, a cloud based software company, is now trying to fix any potential dread that you may have for an upcoming board meeting.
The company distills hundreds of pages of corporate documents and to interactive websites for boards to expedite meetings, and even has an AI product. And recently ZECH announced it close a seven and a half million dollar investment led by Salesforce Ventures.
For more and all this, we were joined by ZECH co founder Edward Norton. We first asked him more about what ZECH is trying to do.
We're trying to make the experience between management of organizations, and I say that meaning corporations or nonprofits because obviously we've got a couple million nonprofit organizations in this country that have governance and boards and stuff like that. We're trying to take what we feel is an increasingly toxic dynamic and reform it into being what it's supposed to be, which is a relationship that that propels in organizations, supports,
you know, brings additional leverage positivity to an organization. And we you know, I've definitely had some people say to me, like, you have an interesting day job, why would you get involved in.
And your day job Just for folks that on the radio, Edward Norton Actor has been in a bunch of movies and all that kind of stuff.
Yeah, the and I and I will I will admit that, you know, on the surface, like a software platform for for board governance features seems pretty esoteric. But it grew out of it grew out of my own experiences over the last thirty years, not dissimilar to years from serving on the board of arts organizations, serving on you know,
conservation organization boards. And then as I built my own companies, and I've built a few software companies that that we had our own boards, people like Fred Wilson from Union Square or you know, Excel or gray Lock or these firms. We were on the management side and we were experiencing
what it meant to have a board. And then when I sold one of my companies and I joined the board of GoFundMe, the company that acquired us, you know, I started sitting on corporate boards and my partners and I really started feeling that there was this elephant in the room, which is that is that companies go through four to eight times a year. They go pencils down to get ready for this thing that essentially to them
feels like a hall monitoring moment and board members. On the other hand, when I was a board member, the thirty six hours before the meeting, you get a ninety page PDF and you're supposed to read it in the airport terminal, and then you go to the meeting and get it read back to you. You know what I mean, Like there was just and so.
You're looking to make it a more what interactive visual engaging experience.
I think we say two things. One is quantitatively, board meetings are an enormous waste of time for everybody, and that has to do with the amount of redundant time waste on setting these meetings up and the presentation materials. And that can be crushed down by having cloud based AI powered tools that make it like a tenth the time for a company. On zech a company can set up for a board meeting in one tenth the time
that they were using to prep before it. Board members should get to read something that's you know, you wouldn't read in the New York Times or Bloomberg on a PDF. You read it in a mobile friendly scroll right that we expect that now, and so everything about the user interface should be easier for both sides of the table.
But also think about this, think about how much time, how many professional, talented people with time is valuable sit there in board meetings, approving minutes, approvals, approving stock option packages, things that they ought to be able to do from the airport lounge in advance. So we built governance function that can be interactive and mobile.
And also so your customer is the board.
The customer is the company and the board. You know, yeah, both sides, management and board members suffer in different ways, and we've tried to reform it. But when you crush the redundant inefficiency of time waste, you improve the quality of the meeting too, because a board meeting should be a forward looking experience, not a You don't want to spend hours looking backward. Everybody can ingest the looking backward
part before the meeting. You want the meeting to be propulsive and additive to where the company or the organization is trying to go. And the best thing about what people are saying to us is not just oh, we really love the user interface. It's much easier, it's easier to read. We love that they're saying to us. This has radically improved the quality and the value of the meeting itself and what we're getting out of our board.
So you guys just raised about seven and a half million Series A led by Salesforce Ventures, including some other guys as well.
What are you gonna do with it?
And what's sort of your angle here?
Well?
You know, I think if you look at I mean, first of all, Salesforce to this day is still I mean, they still are the greatest innovator in cloud based corporate tools. And I've known Mark Benyoff a long time, even though I never told him that we were doing this with his own team until it was done because I didn't I didn't want to, you know, I didn't want it to come from the top down. The Salesforce team is
really phenomenal. But you know, our fantasy was to work with Salesforce because really nobody, nobody understands the business of cloud based corporate tools better than they do. And I also like their ethos as a company. I think they have a great customer service ethos there. But you know, if you look at think about today, would you ever get a FedEx package with with signature tabs on your legal documents?
No?
You get it in DocuSign now.
Right, You don't.
You don't manage your cap table in Excel spreadsheets anymore. You use Karta, and we've we've made this evolution towards Lots of aspects of corporate function have gone into the cloud, but this really critical function hasn't. And we think that
on a business level. To be honest, if you look at you know Karta, which is a seven billion dollar private company, and docu sign is a fifteen billion dollar public company, there's an enormous market in relatively low priced corporate software tools, and we really thought this was a good business. We think there's a very large marketplace of companies and nonprofit orgs that need to reform this critical piece.
All right, thanks, is that co founder Edward Norton. Coming up, we're going to break down the Supreme Court decision to overturn the Chevron Rule and how that could put climate targets at risk.
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This is Bloomberg Intelligence with Alex Steelen Pohlsweened on Bloomberg Radio.
Last week, the Supreme Court overturned a nineteen eighty four decision known as a Chevron rule that experts say, we'll make the EPA's job to regulate methane and carbon dioxide emissions more challenging, potentially putting US climate targets at risk for more. We spoke with Bloomberg Intelligence senior ESG Climate analyst Andrew John Stephenson.
If you think about the Clean Air Act, that's the biggest thing the EUP has ever done. It started in nineteen seventy with one document that said basically, go to it. We need to reduce the amount of air pollution in the air. We need a lot of different levers to pull to make that happen. We're kind of deferring to experts to do that. And you know, they did it
for about twenty years. And then they had another revision Clean Air Act too, and that's the one that we're enjoying today with when they basically said, you did a decent job, let's keep going, Let's keep driving down the air pollution. And you know, here we are today with the cleanest there we've seen in you know, since the nine early nineteen hundreds basically, so it's been very, very successful.
Yeah I'm not that old, but I remember first going the Los Angeles earlier in my career and you could see the smog. Literally it was brown, it was orange, kind of funky. Now you rarely have ever have any problems out there, so I kind of have been a fan at EPA. It's given the Chevron ruling. What does it mean for climate in your part of the world. What's it mean for the energy industry?
I mean, it's troubling on a couple fronts. The first is with respect to the oil and gas industry. The big oil companies have done a basically a fantastic job of driving down a big chunk of their pollution from methane. So methane is really the thing that you really want to address when it comes to the oil and gas industry, which is just sort of leaking natural gas into the atmosphere.
And the bigger companies have done a fantastic job, but the smaller companies, basically are the private companies, haven't moved on it. And so the leadership we've seen from Exon Mobile and others. Has been really transformative in terms of
what's happening for the bigger companies. But unless the APA does work to kind of push along the rest, and we're talking about still half of the production comes from small companies that are private, we're not going to get anywhere near where we need to go on from an emission standpoint from the oil and gas industry. So that's sort of one. The second is really with respect to the power sector. So the power sector, we need more power.
We've basically gone from having a coma power growth over the last decade and now because of AI and evs, we have power demand somewhere around two and a half percent a year and that has to be filled with something. And it looks like gas is going to be a candidate in the next several years because there's just so
much demand that needs to come online. And there was a ruling at least from the APA that the gas companies that they were going to build a new power plant would have to capture that gas, and that doesn't look like it's going to happen.
So because of the ruling, I mean the power coma that was actually a grit I'm going to steal that. I hope that's okay. So you were a ESG climate analyst, so that's environmental, social and governance. Does the social and governance part of your job get affected by the Supreme Court decision?
Well, so people, some of the people think of the environmental it does conclude chemicals and things like that. Obviously that's going to be a bigger problem the social If you think about health, that's really what's going to happen with respect to this ruling. So we are going to have poorer health. I mean, the ability for judges to make decisions that are very complicated, I mean you're talking about I mean I just mentioned the Clean Air Act.
That's a fifty year project with thousands of people working on it to have an opinion on how to get from A to B. And we are now expected to have judges have an opinion that is just wildly professional in a number of areas, and that includes things like PF the kind of forever chemicals. So that's going to affect health and food safety. So there's a lot of things on that side that are going to be affected as well.
So do we have any experience on kind of how this works out side of the regulatory agencies? Are the judges? Are they making reasonable rulings when applicable?
So yeah, I mean the pushback was that these are the judges and the agencies. There's no interaction and there's quite a bit that goes on and I think the agency you'll only win about seventy percent of the time. So the judges actually have had input into this, but you're really relying and it can swing both ways. Which is the really kind of conterintuitive part is that you could have a judge that the sides it needs to be more stringent, right, so it can go in different directions.
And I mean it's ultimately been deferred to the Chevron defense and they say, okay, well let the agencies deal with it. And now we have that kind of open air, open terrain. So it's very difficult to see how things move as smoothly and in such an organized fashion as we've had previously.
Yeah, cause the other side will say, well, judges do this all the time, like they're ruling on different cases that they don't have an expertise about all the time. What's the difference for the companies that you cover? Which companies will be the most impacted.
So the companies that are really if you think about what's going on with the growth of you let's just talk about power for a second. The companies that are really taking up a challenge with respect to you know, power demand going up and dealing with it. Really on a kind of the clean energy front. There's two benefits.
You get.
You get paid for capex right when you're a utility company. So the more of that capex that goes into renewables and grid and things like like that, you get basically one hundred percent of that money is you can earn a return on it, whereas if you build a gas plant you only get about half that because half of the cost of the plant is in fuel and you
don't get paid for that is a utility. So the companies like Constellation Energy are still expected to do very well next Era Energy because of the IRA, are getting very strong incentives to continue to produce as much clean energy as they can, and they're going to there if you look at their stock prices, they've reflected that in the last little bit. But from the other side of the equation, which is the oil and gas industry, the leaders are already the leader, you know, and they've performed
exceptionally well. If you look at the group that is the lowest methane producers have done very very well against the other.
Guys, all right, thanks to Bloomberg Intelligence Senior ESG climate analyst Andrew John Stephenson.
We next take a look at the Swedish Swiss company ABB.
ABB is a technology leader in electrification and automation, enabling a more sustainable and resource efficient future.
Guests hos Chessman and I were joined by ABB chairman Peter Vassar. We first asked Peter where the focus this company is these days.
It's clearly it's the energy transition, which is not only the hard to abate sectors, it's in general the move from a more fossile driven energy system into an electric energy system. And there we obviously contribute with our products and systems, which gives us energy savings between twenty and
forty or even fifty percent. So that's one angle. The other one is all linked to new technologies around automation and robotics, because we are we're leading company in both areas, and that has to do with the reshuring bringing things closer home again where the markets are but also in some countries dealing with the demographics because we have less and less people working in the working age, and therefore
robotics and the automation becomes very important. And the last one is AI, which will revolutionize obviously all what's related to automation. In the future.
We'll talk to us more about what you think is the best way to try to scale manufacturing. When it comes to the EVE charging space.
I think what we really need on the emobility side, let me put it this way, is really work on two fronts. One is a technical side on the charging side, but the other one is also on the user friendliness side, so that they become actually more reliable, they are much more modern. On the manufacturing side, I think we have had clearly in some countries and regions there was some scarcity of manufacturing capacity, which I think have been sold.
Was not an issue for ABB in that sense, but it's the product evolution which is very key.
Now.
On the other side, I think one that should not forget that the whole network of electrification needs to be up to speed. You cannot just actually consume much more energy. You also need to build the transmission lines that the power actually comes in where we have got let's say the charge is installed either for private passenger cars or for buses, ships, trains, whatever you want to call it.
So I think we need much more infrastructure investments on the one side, and really really to actually get the EV charging and the passenger cars based on electrification much more developed in the future.
Peter, who are some of your bigger customers that you're working with these days?
We are here in the United States, so we have all kind of factoring companies in that sense. But on the industrial side, any any company you can think of, which are they are in manufacturing space, for example, they use our actification products, they use our automation products. So you have all the industrial companies and that's where we make the difference. The other side, utilities are very key. As I just said, they need to make sure we have an off supply.
And I know, I'm just looking at our PGeo function where I can see where your revenue comes by geography, you're everywhere. You see certain parts of the world that are more in front of you know, kind of making the transition then some others.
Yeah, I think I would say that Europe has started this rather early with the new green deal in Europe, but also moving into a very different energy systems paid some price with the wars in Russia. So energy prices have gone up and that some rethinking has taken place. I think here in the US you quite clearly see the demand is there in all industries now supported by the various acts you have here, either the Inflation Act or then also the Industrial Act, and that is driving investments.
Now.
It's much earlier days than in Europe. For example, Hia is a little bit of mixed back, I have to say. So you see some countries at the leading edge, like smaller countries like Singapore. In China, which is our second biggest market after the US, you see actually a lot of efforts now being put in place to change the electric system in China. A lot of TV cards are coming in and you can see that those really are now generating the growth in China by city subdued compared
to the US at this stage. So indeed, we are operating across the world in more than one hundred countries. We get good insights at the moment. The driving forces are really the US and Europe, with let's say Asia apart from India, are lacking somewhat.
So where else do you go to expand from here when you already are in so many places.
It's quite clearly US is our key number one market and that's where we have a developing We have over the last ten years, we have put more than fourteen billion dollars into the US in terms of investments. We have got forty manufacturing sites in twenty states. We're operating in all states with our services, et cetera. So that's a key market. We see the electrification market in the US as key, but also the industrial one, which has a lot to do with bringing home let's say, manufacturing
capabilities and capacity. And then the second one is clearly India, which at the moment is in terms of growth outstripping all other countries in a big way. They are very low in manufacturing capacity and that's where a lot of
investments now for the high end manufacturing goes in. And then the third one will be Europe quite clearly as the European Change INDI energy system, but also the demographic issues which we have in Europe which will take out about fifty million kind of working people over the next ten years and that needs to be replaced by automation and robotics, so there's a lot of Freema spins on going there.
Thanks to Peter Vasser, chairman of ABB.
Coming up on the program a conversation with Next Era Energy CEO John Ketchum and how the demand for power is dramatically increasing.
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries. You can access Bloomberg Intelligence via b I go on the terminal on Paul Sweeney.
And am Alex Steel and this is Bloomberg.
This is Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio.
We begin with a look at the company Next Era Energy. It's ticker is NEE. Next Era Energy is a leading clean energy company headquartered in Juno Beach, Florida, and it provides clean, affordable, reliable electricity to approximately five point eight million customer accounts or more than twelve million people across Florida.
For more on how the demand for power is dramatically increasing, we were joined by Next Era Energy President and CEO John Ketchum. We began by asking him more about what his company does.
We're made up of two businesses. One we own the nation's largest rate regulated utility, Florida Power and Light, and two we are the world's leader in renewables when solar battery storage. A unique combination bringing those two companies together.
But you still have like nuclear and gas too, right like it we do for the utility.
Side, we do so we covered all. We're in every part of the energy value chain, not only renewables. We have six gigawatts of nuclear and one the best operators in the country on the nuclear side. And we also own gas fire generation. Seventy two percent of our generation fleet in Florida's actually natural gas fired. So we view ourselves really as a very credible source in being able to advise our customers on what the lowest cost option is for generation.
Owning a utility electric utility in Florida would seem to be a tough business with all the weather down there. What happens when these storms come through? How do you guys? You have to almost be in a constant state of emergency almost to be able to react.
We are battle tested. That's one of the great things about our company is that nothing catches us up by surprise and it comes from a culture of continuous improvement and innovation, and we practice and we drill, and we've had what forty nine hurricanes in the last twenty or thirty years. We're never caught by surprise. We're a company that is used to managing through diversity and that's one of.
The strengths catch by surprise.
So there was an investor presentation that you made and you did you where you outline your forecast this year through twenty twenty six. You're also twenty twenty seven midpoint profit forecast. That's the one that analysts said that falls short of our estimates. Yeah, and I guess the question is if data demand and data power is going to drive so much demand for your stuff, why isn't that midpoint higher.
Well, here's what we see, and we talked a lot about this at the analyst day. There are three things that I think really differentiate next Era as part of our value story. One, we're seeing an inflection point and power demand. Two it's going to be met by renewables because it's low costs, fast to deploy, and it's clean. And no companies better positioned to meet it than we are. And our business model has always been what I would
call a replacement cycle. We were building new renewables to replace higher cost coal plants, higher costs, less efficient gas fired units, oil fired units. We now have this new opportunity that's really emerged in the last six to nine months, which is what I call our growth cycle opportunity. It's a new demand that has come and it's across industries. It's not just data centers get a lot of discussion,
but it's industrial electrification, reshoring, and manufacturing as well. But when you think about it, we're having all these discussions with these customers now. Take data centers, for example, it takes two to three years to build a data center, so they won't need the power until twenty twenty seven. We might sign a contract today, but the power comes in twenty seven, which means it contributes in twenty eight.
And so we're trying to explain to investors, Look, we have a tremendous long term growth outlook, but a lot of this growth cycle demand is really going to start materializing and producing revenues and earnings in twenty seven, which means it really starts to contribute in twenty eight.
As you walk through me Manhattan. You probably see some empty office space here. I think they all move down to your state. Talk to us about how that's impacted your business in terms of demand and maybe what you have to invest back into your grid.
Yeah, and that's what's great about our business right is the Barbell approach. We've got the nation's leading great regularly utility in Florida and the world's leader in renewables in Florida. We're seeing tremendous growth over the next twenty years. We're projecting a forty four percent increase in GDP. We have one thousand people a day moving to the state of Florida. Four of the five fastest growing metropolitan areas in the
United States are in Florida. Florida, we're a country, it would have the fourteenth largest economy in the world, and we're there to power all that growth. So our growth story is not only about what I just discussed about all this renewable demand that we see power in AI and industry and manufacturing across the United States, but it's also all the growth that we see right in our own backyard in Florida.
Talk to me about rates. So you're going to need to invest a lot, right, Like there's maybe an enormous investment cycle, as you mentioned, like the growth cycle for utilities, Right, what is it like on the regulated side of going back to the government and saying, Okay, guys, I got to invest it, you've got to raise the rates.
Yeah.
And so what we do is we have done a terrific job of taking cost out of our business. So when you look at what we've been able to do over the last twenty years, our O and M on a dollar per megawate hour basis is seventy percent seventy percent lower than the national average. That's three billion dollars we put in our customer's pocketbook every single year compared to an average utility. And we've always been able to make really smart capital investment decisions around bringing low cost
generation into the fold. And the lowest cost generation option that we have in Florida is sole in storage. So although we're investing more capital, it's actually lowering the bill because it's a lot cheaper than other generation alternatives, combined with our ability to take cost out with the way we operate.
But for you, from your investor's perspective, is a unit of power from a renewable source. What's a profit margin on that versus maybe an existing source.
Well, when you think about renewables, I mean, renewables, you know, have really strong returns and they're low cost, and you talked about you know, interest rates, you being one of the factors. We pass those costs through to our customers. And so the cost of wind and solar has gone up a little bit as we've seen some pressure you know here from the macro environment, So have cost increase for every other type of generation. Actually, gas fired generation
has really gone up in price. And so you know, what we have seen with gas fire technology is a fifty percent increase in the last twelve months. That has not happened to renewables, making renewables even lower costs than they've ever been on a relative basis to gas turbine options.
So what I hear is that everything is just more expensive because that's the environment that we're in. But because you're able to take costs out, the rate payer may not get hit as hard. Is that a fair statement?
That's exactly right. And so what we've been able to do in Florida, our bill is thirty seven percent lower than the national average, thirty seven percent. It's because of our ability to take all those costs out of the company and also offer them low cost renewable solutions as part of the generation mix. And when you put those two together, that's how we're able to achieve that thirty seven percent lower bill than the rest of the nation.
That's a really compelling customer value proposition and investor value proposition.
All right, thanks to John Ketchum, President and CEO of Next Era Energy.
Staying with energy, we have something here at Bloomberg called Bloomberg New Energy Finance. The idea behind it is to provide data on commodities, power, transport, industries, buildings and agriculture plus new technology.
This week we looked at how the energy transition will drive a significant uptick in demand for metals.
Bloomberg and EF estimates six trillion dollars worth of key metals will be needed between twenty twenty two and twenty fifty, and to reach net zero emissions by mid century that number leaps to ten trillion.
For more.
We were joined by sung at Choie Bloomberg, BNEF Metals and mining analysts. We first to ask some to comment about the amount of metal that would be needed in the energy transition.
As we progress through the technologies where we shift from fossil fuel to clean energy, and with the innovation and technologies, especially in the transportation sector and data sector as well and power grids more, obviously more metals will be needed. In order to get the electrons flow. You need metals. That's pretty obvious right now. The particular categories of metals that are of interesting is lithium and copper. Those two metals are very interesting at this moment.
Where do we get these metals and is that a concern where we.
Do get them? Yes, that is a concern. So for me, demand is is of a concern, but it isn't too much of concern. Supply is more of the concern. The reason for that is the reason that I say that is because many of the places that have had this particular resource, such as copper and lithium in areas where it has very sensitive political and social landscape. And in order to get those you know, supply out of the ground, right,
miners have to navigate through those complicated situations. Right For example, many people forecast that the copper will be in surplus for twenty twenty four, but will be a surplus. It will be a slight surplus. For twenty twenty four, there was, there was the expectation. But then at the start of this year right in Panama, Cobrat Panama was you know
done for many reasons. Right as a result of that, we're experiencing this, you know, run open copper prices right because there's a displocation between a copper minds plot and the smell the capacity.
So here is where I think raises the problem because you're looking at a structural shift among metals that are cyclical. So that's one area where we were surprised to the upside, and now we're going to see a deficit. But then I look at lithium, and we knew the ev revolution and the batteries, we were going to need lithium. So all of a sudden the lithium guys, and a lot of them are in South America. When Game Busters, they're like, we need all this lithium. It's going to be awesome.
The demand's going to be there, and then the price is crashed and then they had to shut down some of their operations because it wasn't economic anymore. We do need the lithium, but we didn't needed that day.
How do we manage that with everything?
You know, timing is everything, but it's really impossible to predict any type of timing with any type of investments. Right, So copper is in this moment right now. For lithium, that was two years ago, right, all this hype around you know, electric vehicles use of lithium, difficulties in getting lidium, so all the investments poured in into lidium space and as a result of that, there's currently there is an oversupply issue with lithium.
Right.
But despite the oversply issue, the lithium industry is really at the cusp of a paradigm shift in technology innovation. Right. There's this thing called direct lithium extraction technology where you take.
The direct lithium extraction, yes.
Direk lithium distraction technology. So there's two routes where you could extract lithium. There's mainly a hard rock with them where you take the spodium, you mind it at the rock and you process it.
All.
The process is brian. You take you take the brian and you extract the lithium out of it but water, but using evaporating method, so you basically you're using some like to evaporate the water out of it and extract lithium and that takes two years. Now DL or diark lithium extractions. That's gonna bring that lead time down to two weeks instead of two years. Oh so main competition versus you know, heart rock that is right now, that's going to be a you know, game changer for the
industry where it's gonna actually lower the cost card. It may load the cost card. It's a bit too early to tell right now, but at the you know, at the cost of commercialization of this technology, it may loader the cost card and it may you know, change the industry forever.
Our thanks to Sung Choi, Bloomberg and e F Metals and Mining Analysts.
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