If You’re Trying To Hedge Inflation, Phosphate Is A Commodity To Keep Your Eye On

As people grapple with the ramifications of the recession, they are looking to hedge against rising inflation. An inflation hedge is typically an investment intended to protect an investor against any significant decrease in the purchasing power of money.

Despite the Federal Reserve's best efforts to bring down prices, reports are showing that inflation continues to be worse than anticipated, and it is expected to broaden in the coming months.

With no end in sight to inflation in the U.S., investors are looking for alternative ways to protect their investments and mitigate the potential impact on their portfolios.

When purchasing power decreases and companies experience lower profits, it becomes even more crucial to protect your money. While investing in the stock market can be a powerful way to hedge inflation, in a struggling economy, diversifying your portfolio can be one of the strongest tools to protect yourself.

Portfolio diversification lowers your level of risk. If or when a company fails, investment in other companies helps to offset losses. Another critical part of portfolio diversification is investing in alternative investments beyond traditional stocks.

Commodities, real estate and precious metals are popular investment alternatives. These alternatives can be more independent as they are considered real assets, and they can retain value when currency is devalued.

When looking at investing in commodities, it is important to look at what raw materials are needed for growing industries. When an industry is forecasted to have high demand for a certain commodity, it can be expected that the value of the commodity will remain stable even during a recession.

Phosphate is a commodity that is experiencing increased demand. The expected growth is largely driven by two industries: electric vehicles (EVs) and agriculture.

EVs have long banked on lithium-ion batteries, but in recent years, North American and European carmakers are following China's lead and developing lithium iron phosphate batteries (LFPs). LFPs are safer, cost less than alternatives and last longer. Compared to their nickel and cobalt-based lithium-ion predecessors, the materials used are more stable and easier to mine. Simply put, phosphate is a better alternative to nickel and cobalt needed for non-phosphate lithium-ion batteries, a factor that is driving demand, especially in light of supply chain concerns due to the ongoing tensions in Asia and Europe.

Phosphate is also an essential component of fertilizers and is used in a variety of food and industrial products. As the agriculture sector increases globally to meet demand, the need for phosphate will also increase.

Arianne Phosphate Inc. (OTC: DRRSF) is one of the promising phosphate mining companies that can respond to the growing demand for phosphate. The company's Lac à Paul project in Quebec is a response to a growing global demand for phosphate, which is increasing by 2% to 3% each year. As electric vehicles see increased adoption, demand for lithium iron phosphate batteries could rise if the trend continues, in turn driving demand for phosphate.

The Canadian company also adheres to stricter environmental, social and corporate standards, aligning with North American and European agendas, in contrast to Chinese suppliers who currently supply much of the demand. As European and North American companies pivot away from their overdependence on Chinese suppliers, Arianne Phosphate seems to be well-positioned to fill the supply gap.

Arianne Phosphate Inc. (www.arianne-inc.com) owns the Lac à Paul phosphate deposit in Quebec, Canada. Fully permitted and shovel ready, the asset is among the world's largest greenfield deposits, capable of producing an environmentally friendly phosphate concentrate. Due to the nature of its high-purity, low-contaminant product, Arianne's phosphate can be used to produce fertilizer as well as meeting the technical requirements of specialty applications such as the lithium-iron-phosphate (LFP) battery. The Lac à Paul deposit is rare due to its geographic location and geological structure. Arianne Phosphate is listed on both the TSX-V: DAN and the OTCQX: DRRSF.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.

This information contains forward looking statements. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralisation and reserves, exploration results and future plans and objectives of Arianne Phosphate Inc., are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Arianne Phosphate Inc.'s ("Arianne Phosphate" or the "Company") expectations are disclosed under the heading "Risk Factors" and elsewhere in Arianne Phosphate Inc.'s documents filed from time-to-time with the TSX Venture and other regulatory authorities.



Contact Details

Brian Ostroff, President
brian.ostroff@arianne-inc.com
Company Website https://www.arianne-inc.com