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Humanoid Robots and Critical Minerals: A Peek into Our Future
By 2050, an astonishing one billion humanoid robots could be living alongside humans, according to a recent report by Morgan Stanley’s Global Research Team. This projection not only highlights a potential transformation in the way we live but also raises questions about the resources needed to support this technological leap. As the world grapples with ethical dilemmas surrounding artificial intelligence and robotics, the focus quickly shifts to critical minerals essential for creating these humanoids.
The Critical Mineral Demand Surge
Morgan Stanley’s findings suggest that producing these humanoids could create an immense demand for various critical minerals. The report speculates that the production of just one humanoid will require substantial amounts of minerals, including:
- 0.9 kg Neodymium Praseodymium (NdPr)
- 2 kg Lithium
- 6.5 kg Copper
- 1.4 kg Nickel
- 180 g Cobalt
- 3 kg Graphite
With a forecast of one billion humanoids, the demand expands exponentially. The firm estimates a cumulative incremental demand of $800 billion for these minerals by 2050, necessitating significant increases in mineral production levels:
- NdPr: +167% by 2050
- Lithium: +20%
- Copper: +15%
- Nickel: +10%
- Cobalt: +5%
- Graphite: +5%
However, NdPr appears to have the largest current deficit, suggesting it’s a key player in this market’s future.
Supply Deficits Highlighted
Morgan Stanley’s modelling indicates profound supply deficits for various critical minerals by 2050, particularly:
- NdPr: 26% supply deficit
- Lithium: 78%
- Copper: 1.5%
- Nickel: 25%
- Cobalt: 34%
These figures, reflecting only the humanoid robot sector, show the escalating need for these minerals in other advanced technologies like electric vehicles and renewable energy systems, compounding supply concerns.
The Influence of China on Rare Earth Minerals
Rare earth minerals, while not particularly rare in geological terms, are crucial for advanced technology production, including humanoids. China dominates this market, possessing nearly half of the world’s identified rare earth reserves and accounting for a significant portion of global production:
- NdPr: 65% produced in China
- Lithium: 27%
- Copper: 50%
- Nickel: 70%
- Cobalt: 55%
- Graphite: 82%
China’s tightening control over these resources poses challenges for other countries, especially as the nation enacts export controls and investment strategies aimed at securing its role as a key supplier.
Price Trends and Future Predictions
Morgan Stanley has revised its long-term price forecast for NdPr from $135/kg to $209/kg by 2031, predicting a dramatic rise from the current price of around $56/kg. This anticipated growth reflects the tightening supply and increasing demand amid global technological advances.
For lithium, the firm expects a significant increase in demand due to humanoids, projecting a shift from a one-third supply to near 80% by 2050. Despite current surpluses, lithium demand will become more pronounced from 2040 onwards.
Investing in Critical Minerals: Opportunities on the ASX
The potential critical minerals boom presents lucrative investment opportunities in Australia’s stock market. Morgan Stanley identifies several ASX-listed companies as well-positioned to benefit from the rising demands for critical minerals:
- BHP Group (ASX: BHP): Overweight rating with a price target of $39.50, focusing on copper.
- Lynas Rare Earths (ASX: LYC): Overweight rating and price target of $10.00, highlighting its NdPr processing capabilities.
- Iluka Resources (ASX: ILU): Overweight rating with a $4.65 target, thanks to its exposure in rare earth minerals.
- Mineral Resources (ASX: MIN): Overweight rating with a price target of $35, showcasing its lithium assets.
- Pilbara Minerals (ASX: PLS): Overweight rating with a target of $1.70, emphasizing its lithium production ramp-up.
- South32 (ASX: S32): Overweight rating with a $3.05 target, spotlighting its diverse mineral exposure.
Another stock, Syrah Resources (ASX: SYR), is noted as equal-weight but with a positive forecast, supported by its substantial graphite resources.
Conclusion
The anticipated rise of humanoid robots and the critical minerals they rely upon present both challenges and opportunities. As we stand on the verge of a technological revolution, keeping an eye on market trends and strategic investments can be key to navigating this evolving landscape. With Australia poised to play a vital role in the supply of essential minerals, investors may find themselves on the brink of significant financial gains in the coming years.
