Gianni Kovacevic, founder of Faraday Copper (formerly Copper Bank) and Lithium Bank Resources, discusses the evolving markets for copper and lithium. Kovacevic, a prominent figure in the commodities sector, shared his insights on the demand, supply constraints, and investment opportunities in these critical metals as of July 2025.
Kovacevic highlighted the robust outlook for copper, driven by the global push for electrification, renewable energy, electric vehicles (EVs), grid infrastructure, and AI data centres. He emphasized that copper demand is expected to grow at a compound annual growth rate (CAGR) of 3-4%, leading to tight supply-demand dynamics and potential scarcity. This scarcity, Kovacevic noted, is likely to drive price appreciation, attracting larger investors and moving market sentiment.
Comparing copper to oil, Kovacevic pointed out that while oil prices remain subdued at around $70 per barrel—half their all-time high—copper has reached $5.50 per pound, surpassing its 2011 peak of $4.60 but still below its inflation-adjusted high. This disparity underscores copper's favourable position as a commodity poised for growth.
Kovacevic identified politics as the primary obstacle to scaling copper supply. Jurisdictions like Chile, Peru, and British Columbia, once considered top-tier, now face permitting delays that can stretch 10-15 years. In contrast, regions like the Democratic Republic of Congo have seen significant success, exemplified by Ivanhoe Mines' developments under Robert Friedland's leadership. In the U.S., projects like Pebble and Resolution could benefit from streamlined permitting under supportive administrations, but refining capacity remains a bottleneck. Most copper concentrate must be shipped to Asia for processing, as Western countries lack sufficient smelting infrastructure.
Kovacevic is optimistic about technologies and regions that can overcome these hurdles. He stressed the need for faster project approvals and domestic refining capabilities to meet Western demand. Without these, supply constraints could intensify by 2027-2028, creating a "wall of worry" for the market.
As the world's largest consumer and refiner of copper, China significantly influences global market dynamics. Kovacevic noted that China, with its $18 trillion economy, is transitioning from an export-driven to a consumer-driven economy. Its trade with ASEAN countries and the European Union surpasses that with the U.S., reducing its reliance on American markets. China's interest in maintaining low commodity prices to support its manufacturing and technology leadership could lead to market interventions, potentially causing price rollovers. Investors must closely monitor China's actions to navigate these dynamics effectively.
Turning to lithium, Kovacevic described the market as highly volatile, with prices dropping from $80,000 to $8,700 per ton. However, he sees significant upside due to an expected demand CAGR of 20-25%, potentially doubling consumption every three years. This growth is driven by the increasing adoption of EVs and energy storage systems.
Kovacevic attributed the current low lithium prices to China's strategic overproduction, which has flooded the market and made it challenging for new projects to secure financing. However, he believes this situation is unsustainable, as most lithium producers are currently unprofitable. The inevitable rise in demand will eventually stabilize prices, creating opportunities for well-positioned companies.
Direct Lithium Extraction (DLE) is a technology Kovacevic is particularly bullish on. DLE, which extracts lithium from briny water, is gaining traction, especially in Alberta, Canada. The Alberta government recently announced $3.9 million in non-dilutive funding for Lithium Bank to advance its DLE projects, signalling strong regional support. Kovacevic compared this to Alberta's early investment in oil sands technology, which transformed the region into a global oil production leader. He expects DLE to become a cornerstone of Alberta's economy, creating jobs and generating significant tax revenue.
Kovacevic views lithium as the "single biggest opportunity" for junior mining speculators. He highlighted Lithium Bank as a prime example, noting its $40 million in raised capital, 60 million shares outstanding, and full ownership of two promising projects. With non-dilutive government funding and a current share price of $0.30, Kovacevic believes Lithium Bank could reach a $60 million market cap at $1 per share—a conservative target compared to peers like E3 Metals ($200 million) and Standard Lithium ($600 million). He urged investors to focus on companies with strong share structures and consistent news flow, as these are likely to deliver significant returns regardless of short-term lithium price fluctuations.
Kovacevic also shared his enthusiasm for silver, suggesting it could outperform gold due to its potential to reach its all-time high of $50 per ounce. He recommended allocating 60-70% of a precious metals investment to silver, citing its speculative potential. For uranium, he acknowledged the long-term potential of nuclear energy but cautioned that new reactor construction is a decade away. Current uranium investments hinge on scarcity within the existing reactor fleet, with the best opportunities lying in discovery-driven projects led by experienced teams like Paladin Energy or NexGen Energy.
Kovacevic believes lithium stocks are significantly undervalued, with the top 10% of companies offering 3-10x return potential due to their proximity to production and news catalysts. Copper equities, while having appreciated, could still double or triple if copper prices approach an inflation-adjusted high of $7-8 per pound. However, he warned of broader market risks, noting that a 20% correction in the general stock market could impact all sectors, including commodities. Investors should remain nimble, trading around positions to capitalize on volatility.
Gianni Kovacevic's insights underscore the transformative potential of copper and lithium in the global energy transition. Copper's steady demand growth and supply constraints make it a reliable long-term investment, while lithium's volatility presents a unique speculative opportunity, particularly in companies leveraging innovative technologies like DLE. By focusing on best-in-class projects and monitoring global dynamics, particularly China's influence, investors can position themselves to capitalize on these critical commodities.
Disclaimer: This article is for informational purposes only and not a recommendation to buy or sell any securities. Always conduct your own due diligence and consult a financial advisor.
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