(Bloomberg) -- One of the world's biggest mining investors is going to be thinking a lot more about electric vehicles over the next decade.
“The biggest theme over the next 10 or 15 years of investing is going to be getting right the transition away from the combustion vehicle towards EVs,” Evy Hambro, who manages BlackRock Inc.'s World Mining Fund, said in a Bloomberg TV interview on Thursday.
Battery-powered cars and gasoline hybrids are poised to grow so fast that by 2040 they'll make up more than half of all vehicles sold globally, according to Bloomberg New Energy Finance. Sanford C. Bernstein Ltd. forecast that lithium demand will increase more than sevenfold from 2015 to 2030, while cobalt usage will more than quadruple. Copper and nickel are also expected to see significant demand boosts.
From established heavyweights to small start ups, many in the mining industry are rushing to get on board the electric vehicle story. Coal and iron ore giants including Glencore Plc and BHP Billiton Ltd. have been keen to trumpet their exposure to metals such as cobalt or copper, while new firms are staking ground for commodities such as lithium.
“It's these commodities that we can see structural demand growth for for many years into the future,” Hambro said. “Given the inability of supply to respond probably quick enough to meet some of that demand, there's likely to be some price action that's likely to be positive.”
Read more: Supplying lithium gets trickier as electric revolution looms
While there seems to be a broad consensus about increasing demand, miners have a history of building too many projects and oversupplying markets. That's led some to question how the industry will respond. Julian Treger, co-founder of activist investor Audley Capital Advisors LLP, has said that the lithium market is over-hyped and there are too many companies rushing to production. Last year, Bernstein analyst Paul Gait said that lithium had the characteristics of a commodity bubble.
Still, Hambro said he hopes the industry has learned the lessons of its over-aggressive past.
“Pressure is on management not to revert back to the old ways, the mistakes that had been made,” he said. “The over investment into new capacity, the buying of assets at over-inflated prices.”
To contact the reporters on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net, Manus Cranny in London at mcranny@bloomberg.net.
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Nicholas Larkin, Liezel Hill
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