The problem is you need to buy land and equipment and pay for it. 5 years is a good time to plan for to ensure that you can make your payments. If you are not breaking even on the startup costs after 5 years the investment will probably never pay off.
Eventually you pay off the land and your costs go down. You can keep equipment running for a long time, but it wears out. You are risking all the time though that the mineral demand might drop and now you have a worthless mine (which you need to do environmental cleanup). With equipment you risk a new process making your old equipment unable to produce what the market demands so you have to replace it.
Of course everybody understands you plan on mining for longer than 5 years. However you have a 5 year plan to get the mine operating and prove it can make money.
If you try and time the market at horizons greater than five years when that’s your startup time from planning to production sometimes you’ll win big and sometimes you’ll discover you’ve made a genuinely awful investment. With a ten year turnaround time you could easily have the technical, social or economic environment just destroy the viability of your investment. Imagine you’re investing in a new city somewhere in Malaysia or Pakistan and the government falls or there’s a war. Imagine you’re going to build a new auto manufacturing hub in Nigeria and the entire West African economy tanks because Ebola goes pandemic. Timing the marker is fantastic if your bet pays off but nothing is guaranteed.
The point is more to not try timing the market. There are all sorts of things one could reasonably say about what would be right or wrong for these unstable areas, but fundamentally the most long term good would be if they could engage in slow but steady development of both their natural resources and their infrastructure. I'm quite confident lithium will continue to be quite valuable for at least a generation. Remember, we still use NiMH and even NiCad batteries in some cases. Even if science has already discovered the magic new battery chemistry that will replace lithium ion, you're most likely looking at 5-10 years before the very first commercial applications come about.
I don't remember exact context, but I recall a long time ago someone was talking about shipping medicine and such to a particularly poor area of Africa, and the reply was basically "There are no roads here to ship the medicine on."
NiMH and NiCad batteries do have some useful properties. We still use Lead Acid too, despite it begin a truly awful battery in terms of energy density and based on fairly ancient designs because it's incredibly robust against environmental changes, can delivery incredibly high currents and don't care about how to charge them; you can comfortable load them up by plugging them into a 14.4V supply.
NiCad for example is great for low temperature environments and they can deliver almost 100% of their capacity at the maximum rated discharge. They are essentially lead-acid with a tad more energy density and being very sensitive about how they're charged.
NiMH don't have that great of a capacity at maximum rated discharge but they do have a very very low internal resistance while still (almost) matching Lithium batteries in energy density. Additionally, they are almost perfectly constant voltage until discharged, making them suitable for applications where you might not want a complicated voltage controller.
Lithium is actually a fairly difficult cell. Drawing maximum discharge will reduce capacity, they don't like shocks or extreme temperatures and their voltage stability is meh at best. They also heat up a lot when charging or discharging, making cooling circuits required in some scenarios. They do have extraordinary energy density though.
Don't discount other battery types; battery chemistry dictates the behaviour of the battery under load scenarios, Lithium batteries aren't always the answer.
Yeah we always do. Mining is incredibly cyclical boom/bust In Australia for this reason.
Also it’s just as difficult to leave it in the ground. Any decent mining operation takes at minimum 2-3 from construction to production so you still need to take that into account (unless you lock down some offtake agreements to hedge the risk)
How financialized are mines, for want of a better term? i.e. Are people buying the mining company's shares assumed to be taking the gamble on what prices will be in 5 or 10 years, or do mining companied buy a ton of futures to try to even things out?
Both, depending on the company. The great companies are play heavily in the futures market, as a result their production is mostly locked up when the boom comes and so they don't make any extra money. The not so great companies sell to market mostly, and make a ton of profit in the boom years and are lucky if they don't go bankrupt in the bust years.
Of course great and not so great are by my definition of great. You can do should do your own investigation.
The great thing about mines is that you can just leave the lithium in the ground if the current prices aren't right.