From common elements such as aluminium to rarer and more scarce ones such as cobalt, your phone is an amalgamation of different metals and compounds — and you can invest in them.
When you’re out and about for Sunday brunch, take a moment from Instagramming that perfect smashed avo or vegan pancake to consider what you’ve got in your hand.
The phone is not only a modern miracle of engineering and software development, but the result of complex supply lines spanning from rare earths mines in Africa to manufacturers in Asia.
Without the array of minerals and materials used in your phone, you wouldn’t be able to swipe right over lunch.
So, what’s in a typical phone and how can you get a piece of the action?
So, what’s in a typical phone?
Unfortunately, phone manufacturers don’t exactly give you a list of ingredients when you buy a phone – but there are several elements which make up the typical phone and we’ve broken some of these down.
You may find indium, tin and oxygen in your phone’s touch screen because it conducts electricity and allows the screen to function as a touch screen.
The actual screen itself may contain aluminosilicate glass, which was until a few years ago one of the rarer types of glass. Aluminosilicate is a combination of of aluminium, silicon, potassium and oxygen and has also been used in space shuttle windows, gauges, and thermometers.
There’s also a slew of rare earths which allow your phone screen to display colours. These include: yttrium, lanthanum, terbium, praseodymium, europium, dysprosium or gadolinium.
You may have heard a lot about the elements underpinning phone batteries, because they’re being used on a larger scale to power electric vehicles and battery storage for renewable energy projects.
Manufacturers constantly test and evolve batteries, but the typical battery may include elements such as lithium, cobalt, carbon, aluminium or manganese.
Electronics are the element which allow your phone to function as more of a multimedia box than a phone (does anybody actually use their phone to make calls anymore?).
From wiring, speakers, the processing chip to soldering, the typical phone may include the likes of: copper, silver, gold, tantalum, nickel, dysprosium, praseodymium, terbium, neodymium, gadolinium, silicon, arsenic, phosphorus or gallium.
Gaining exposure to the booming mobile phone sector could be achieved directly by investing in phone manufacturing companies, but there’s another route to get in on the ground floor of the industry:
Invest in the material miners – those that make the manufacturers job possible.
How do you invest in those elements in Australia?
One of the benefits of being an investor in Australia is that you’re spoiled for choice when it comes to investing in mining companies without needing to go through the rigmarole of investing in foreign-listed companies.
There are plenty of miners of the materials which make up phones listed on the ASX — the trick is finding them.
While you can invest in the big miners such as BHP or Rio Tinto, there’s also value to be had at the smaller end of the market.
Smaller stocks can provide more upside as they move through the phases of exploration and discovery, but they also come with more risk — so do your own research before deciding what to invest in.
Again, we can’t stress this enough, this article isn’t intended as investment advice.
We’ve picked out just a few of the stocks which could provide underlying exposure to the expected continual strong sales of phones around the world.
Many of the miners also give you exposure to other industries, such as renewable energy or electric vehicles — so it’s not just about phones.
The battery mineral miners
Battery mineral miners are getting a lot of traction right now, as the market starts to see the potential for the types of batteries you’d typically see in phones.
Lithium miners in particular have benefitted from a lot of attention being placed on lithium batteries not only providing the juice for phones, but potentially changing the game for renewable energy projects as well.
One such smaller company is AVZ Minerals (ASX:AVZ), which is attempting to bring its Manono Project in DR Congo to life.
So far it has a resource of 400.4 million tonnes grading 1.66 percent lithium oxide — making it the second-highest grade on the market. Only Talison Lithium’s Greenbushes deposit has a higher grade.
Rare earth miners, as the name suggests, are pretty rare – in actual fact the rare earths themselves aren’t actually all that rare, it’s the process to mine them that is challenging and highly expert that makes them rare to come by – but there are some smaller-cap plays you could look at if you were interested in getting into rare earths investing.
One such company is Arafura Resources (ASX:ARU), which is producing neodymium and praseodymium in the Northern Territory.
The bonus with rare earths is that they’re not just used in mobile phones — in fact, batteries are just 9 percent of the end market meaning not only do you get exposure to the growth of phone usage but also to a whole stack of other things:
The precious metals miners
As you’d expect, the main game for gold isn’t smartphones — it’s people who like shiny things.
But if you think about what gold is used for in phones, it’s in the wiring — which also brings copper into the discussion.
If you’re looking for options which involve copper and gold, there are a few copper-gold miners out there at the smaller end of the market to have your eye on.
These include the likes of Antipa Minerals (ASX:AZY), which is busy pursuing a copper-gold project in the Paterson Province of WA.
The province is home to the historic Telfer gold mine, but more recent exploration by Rio Tinto has watchers excited by the province’s copper potential — making it an ideal location for investors looking for a copper-gold exposure.
Star Investing has a commercial relationship with some of the companies mentioned in this article. This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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