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American Resources Policy Network
Promoting the development of American mineral resources.
  • Moores’ Law: The Rise of Lithium Ion Battery Megafactories and What it Means for Critical Mineral Resource Supply

    Earlier this month, Simon Moores, Managing Director of Benchmark Mineral Intelligence and member of the ARPN panel of experts testified before the full U.S. Senate Energy Committee on opportunities and risks in the energy storage supply chain.  

    We’re titling his observations as Moores’ Law — which is his for the taking, given the placement of the apostrophe. If he hasn’t used it yet, he should.
     While we already featured Moores’ top line points regarding the rise of Lithium Ion megafactories (also see the chart), we would be remiss if we didn’t share some of his takeaways on the implications for the main critical raw material inputs for this technology – namely Lithium, Graphite, Cobalt, and Nickel — and add some additional thoughts. 

    Lithium

    • For Lithium carbonate and Lithium hydroxide, the “base chemicals that the battery industry seeks,” Benchmark Mineral Intelligence sees a 10-fold increase in the industry’s demand profile over a ten-year timeframe. Lithium is largely sourced from Chile, Argentina and Australia, and is processed into battery grade in the U.S. and China. 

    • Meanwhile, in a recent op-ed for the Reno Gazette Journal, professor emeritus of mining engineering at the University of Nevada, Jaak Daemen, citing an even higher demand profile increase for Lithium, argued that with only one Lithium mine in the U.S., the United States is unprepared to meet demand with the main problem not being the lack of resources, but “a regulatory approach that endlessly delays bringing mines in production.” 

    Graphite

    • Lithium Ion technology uses both naturally mined flake Graphite as well as synthetic Graphite, in which the former accounts for roughly 60% of inputs, and the latter for roughly 40%. According to Moores’s testimony, China dominates natural flake mining at 62% of global production in 2016, followed by Brazil at 23%.  A similar scenario unfolds for refining, most of which also takes place in China. 

    • According to Moores, “[w]hile large flake graphite mines are being developed outside of China in Mozambique, Canada and the US, processing capacity to make anode material is still lagging.”

    • As we previously highlighted, the U.S. currently produces zero Graphite, with the last American Graphite mine having closed 25 years ago. 

    • As Moores points out, however, two Graphite companies are currently seeking to mine and process flake graphite for battery grade material in the U.S., so there is hope the supply picture will change domestically.

    Cobalt

    • According to Moores, 64% of the Cobalt consumed globally in 2016 was mined in the Democratic Republic of the Congo (DRC), with China dominating the “refining step in the supply chain with 57% of global capacity.”

    • With Cobalt also being a Co-Product to Gateway Minerals like Copper and Nickel, Moores argues that “the fortunes of Cobalt – now driven by battery demand – is still at the mercy of Nickel and Copper commodities which is drive by industrial demand. This is causing long term planning issues for the EV supply chain.”

    • You can read ARPN’s latest blog item on Cobalt here

    Nickel

    • With advances in battery technology and changing formulas, Moores sees battery grade Nickel demand grow “from 75,000 tpa in 2016 to anywhere between 300-400,000 tpa by 2025.” 

    • Nickel production is in the million of tons a year, and from a U.S. point of view, the supply picture recently changed with our import dependence dropping from roughly 50 percent to currently 25 percent with new domestic projects having come online.  

    • However, as Moores points out, “the battery grade chemical material is specialist with only a handful of major producers outside of China.”

    Ultimately, this is food for thought for any discussion regarding the comprehensive mineral resource strategy our nation sorely needs.

    Says Moores:

    “Where we stand today in 2017, China is not only a the center of mass market EV development and deployment but also of cathode production, battery grade raw material refining and the building of the new battery cell capacity.  Those that control raw material and chemical / cathode refining know how and capacity will control the lithium ion battery supply chain. And those that control the lithium ion battery supply chain will be the biggest influencers on the next generation auto and energy industries.”

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  • Senate Energy Committee Zeroes in on Energy Storage Revolution – Where Will the Battery Megafactories Get the Minerals and Metals They Need?

    Just last week, we highlighted the surge in EV technology and its implications for mineral resource supply and demand.  A timely subject – as evidenced by the fact that the U.S. Senate Committee on Energy held a “Full Committee Hearing “to Examine Energy Storage Technologies” this week. 

    Simon Moores, Managing Director of Benchmark Mineral Intelligence and member of the ARPN panel of experts, was invited to testify on opportunities and risks in the energy storage supply chain. In his testimony, Moores outlined the “rise of the lithium ion battery megafactories,” and shared Benchmark Mineral Intelligence’s assessment of the development of the two largest growth markets for which these lithium ion batteries will be targeted – EV and stationary/utility storage, which Moores characterized as the “two uses that underpin the energy storage revolution.”

    Said Moores:

    Both markets are in their infancy. However, as these markets mature over the next 10 years, the scale of application and its disruptive effect on established auto and energy industries will be unprecedented.”

    Moores then discussed the critical raw material inputs fueling lithium ion technologies — Lithium, Graphite, Cobalt and Nickel — with an eye towards the United States’ current and prospective role in these respective markets. While outlining opportunities, Moores also warned of great risks:

    “The demands EV manufacturers are placing on raw material miners to chemical processors and cathode manufacturers are huge – they are being asked to increase their business footprint by 5-10 times in a 7-year period. At present, there is little desire to share this capital and commercial risk of building new mines or expanding their business to meet this new demand. 

    Major auto manufacturers will eventually have to conclude that supply chain partnerships and capital investment is the only way to secure lithium, graphite, cobalt, nickel or lithium ion battery cells. But this decision-making process is slow for players outside of China and risks derailing any form of revolution in the energy storage industry.”

    He argued that necessary investment is still falling short and “needs to be 10 times larger to create a new blueprint for a post-2030 world.”

    Concluded Moores: 

    “This energy storage revolution is global and unstoppable. For countries and corporations, positioning themselves accordingly to take advantage of this should be of paramount importance and longer term (~10 year) decisions need to be made.”

    Here’s hoping that his testimony resonates with Members of Congress and helps deepen the conversation about a much needed comprehensive mineral resource strategy. 

    To read Moores’s full testimony, click here. Video footage of the hearing will be made available on the committee’s website as well. 

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  • The Surge of EV Technology and Implications for Mineral Resource Supply and Demand

    You may have caught Elon Musk’s exchange with Daimler on Twitter over investment in EV technology earlier this week. Vacuum giant Dyson has also tossed its hat into the ring announcing that it will spend $2.7 billion to develop an electric car. The headlines are piling up, and it’s no longer a secret that demand [...]
  • Why Cobalt Should be High on Your Radar

    In a recent article, the Financial Times zeroes in on one of the metals followers of ARPN will know is becoming increasingly indispensable to 21st Century clean energy technology: Cobalt.  Once an obscure metal you rarely heard about, this co-product of Nickel and Copper is increasingly afforded “critical mineral status” – primarily because of its [...]
  • Urban Mining – No Panacea but Important Piece of the Resource Strategy Puzzle

    Advances in materials science continue to transform the way we use metals and minerals, and in doing so, also change the supply and demand scenarios for many materials. As we recently pointed out on the ARPN blog, demand for Cobalt has been soaring thanks to its applications in battery technology and the growing popularity of electronic [...]
  • Cobalt Demand on the Rise – But What About Supply?

    Once an obscure metal most people had rarely heard about, Cobalt, a co-product of Nickel and Copper, is becoming a hot commodity and is increasingly afforded “critical mineral” status. The main reason for this development is Cobalt’s application in Lithium-ion battery technology. Soaring demand for rechargeable batteries and the growing popularity of electric cars have sent the [...]
  • Cobalt – First Steps Towards Reducing Mineral Resource Dependencies?

    A recent piece for InvestorIntel zeroes in on a metal which, due to its growing use in battery technology, coupled with a challenging supply scenario is increasingly afforded “critical mineral” status – Cobalt. A co-product of Nickel and Copper, the metal’s recent history, as author Lara Smith argues, has been “chaotic.” ARPN agrees that about sums it up. Criticism regarding the [...]
  • As Resource Dependence Deepens, Miners Pivot Back to U.S. For Exploration

    Against the backdrop of market prices recovering and supply woes looming, mining companies are expected to increase spending on exploration for the first time in five years, reports news agency Reuters. In what may spell good news for the United States, analysts anticipate the biggest expenditure increases to occur in the United States, Canada and Australia, all [...]
  • McGroarty on Critical Minerals: “It’s Not Your Grandfather’s Infrastructure”

    The New Year is now a little over a week old and the inauguration of the 45th President of the United States is just around the corner.  And while some are still dwelling on 2016 (we offered our post mortem at the end of the year), the time has come to look at what’s in store. One of [...]
  • Through the Gateway: Cobalt – A Critical Mineral Under Scrutiny

    A lustrous, silvery blue, hard ferromagnetic, brittle element, Cobalt’s physical properties are similar to Iron and Nickel. It forms various compounds, stable in air and unaffected by water.  Main uses include many alloys, including superalloys used in aircraft engine parts and high-speed steels, as well as magnets, and catalysts, to name but a few. It’s [...]

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