The high-end EV manufacturer is looking to double the world’s battery output as it seeks to bring the production cost of battery packs down in a bid to spark mass EV uptake.

The company is aiming to begin construction on the Gigafactory in June 2014 with an old airfield in Reno, Nevada rumoured to be the favoured site.

One of the biggest impacts of the Gigafactory will be demand for the critical minerals that will fuel it. Lithium, graphite and cobalt are all set to be key raw materials to make Tesla’s lithium-ion batteries, but the question remains whether the company can get the volumes and consistent quality it needs in time.

What follows is an analysis on the potential volumes of critical minerals Tesla would need for a Gigafactory operating at capacity, which is expected in 2020.

Graphite demand up 152%

Graphite will be the largest input raw material for Tesla. Should the company choose natural graphite, it would require as much as 126,000 tonnes of flake graphite each year in the form of 50,000 tonnes of the battery-grade material, spherical graphite.

This is an increase of 152% on today’s battery demand for the mineral. It equates to 6 new graphite mines on the basis of today’s 30,000 tpa mine size average and the yield of suitable material gained from the mine.

Graphite — both natural and synthetic — is used as the anode in a battery.

China is the leading producer of flake graphite and the leading processor of battery grade spherical graphite today. But the country is aiming to consolidate operations which could see it withdraw somewhat from the international market place.

Lithium demand up 50%

Lithium, the second largest input mineral by volume, will see demand increase by 25,000 tonnes a year from a Gigafactory at capacity. This is an increase in demand from the battery sector of 50% on 2013 levels.

Mined as a mineral and processed into a chemical, lithium is used as the cathode material in both hydroxide and carbonate form.

Chile is the leading producer of battery grade lithium today.

Cobalt demand up 17%

Cobalt demand from the battery sector could rise as much as 17% on 2013 levels thanks to Tesla’s plans. This is the equivalent of 7,000 tonnes a year.

The metal is also used as a cathode material in lithium-ion batteries.

The leading supplier of cobalt is the war-torn country, DRC Congo, which supplies 55% of the world’s total. Tesla has stated it does not get its cobalt from the Congo; that highlights the lack of dedicated cobalt mines around the world, with most supply coming as a by-product such as is the case of copper mining in Africa.

It is also important to note besides the Congo, there is no large producer of cobalt, but rather many countries producing very small amounts, varying from 3-7,000 tpa. Taken together, they collectively equate to the remaining 45% of global supply.

Other less critical raw materials Tesla will need include nickel, bauxite(aluminium), and copper. The company will not be using rare earths, as its cars do not use a permanent magnet.

A free special report, “Tesla’s $5bn question: What will Tesla Motors’ battery super-plant mean for critical mineral demand,” will be published next week via Twitter, Linkedin, and through ARPN and Industrial Minerals.

Simon Moores is an American Resources Policy Network Expert. Learn more here.

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Wide-reaching controls on China’s natural resources continue to be at the forefront of its shift to a high value economy.

Already industries like rare earths and phosphate fertilizer are tightly controlled by government-forced regulation. The question remains whether graphite – the 9th most critical raw material according to the British Geological Survey – is headed for the same fate.

Natural flake graphite is used as a key component in all battery technologies, the batteries that will power a shift to electric vehicles and the batteries we all rely on for mobile technology today. China controls 70% of supply while the USA has no active production. In fact, the whole of North America only produces 3% of the world’s flake graphite from one mine in Quebec, Canada.

Buyers of graphite – which are predominately steel refractory manufacturers – have become over-reliant on cheap product from China, but those days appear to be over as the country looks towards limiting low value exports in favour of high value domestic manufacturing.

Common restrictions the Chinese government has imposed on its miners include:

• Closure of smaller mining pits under 20,000 tonnes/year to encourage larger pits and economies of scale
• Closure of older, inefficient processing plants
• Installation of plants capable of producing value added products such as spherical graphite
• Redirection of raw flake graphite material to these value-added plants and away from exports
• Potential for an export quota system such as in the magnesia and fluorspar industries in the past
• Heavier taxes for exports of raw flake graphite material

If even some of these come to fruition in the future, the global graphite supply landscape could look very different.

Download a presentation on the subject here.

For companies and countries used to counting on China for a relatively cheap and reliable graphite supply, Moore’s assessment is a warning sign that future supply may be far less certain.

The post What are China’s intentions for its graphite production? appeared first on American Resources Policy Network.

There has been much hype surrounding what has been described as the world’s wonder material – graphene. It is (theoretically) stronger than steel, more conductive than copper and incredibly flexible. Graphene is a one atom layer of carbon, a truly two-dimensional material. One mining company described it as “graphite, unfolded”.

On the face of it graphene holds the potential to change everything we do and replace many critical raw materials in numerous applications. For example, replacing indium in touch screen technology is being targeted today by producers.

In reality, however, the road to wide scale commercialisation and unlocking the true potential of graphene will be long and hazardous.

Following two conferences in Europe over the last two weeks, the global interest in graphene from the world’s biggest corporations is clear. Companies such as Microsoft, Boeing, Panasonic, and Phillips were in attendance listening to small start-up graphene developers and, in some cases, graphite miners.

Surprisingly, creating a viable, commercial production method didn’t seem the problem concerning today’s graphene pioneers. Finding real world applications and customers to buy it appears the greatest challenge.

“There is no killer app for graphene,” said one US-based developer.

To gain market acceptance, the serious developers are crying out for a standard definition and independent body to oversee this. Many are concerned the recent over-inflated graphene hype is attracting marketers that is discrediting the significant work of the materials scientists and engineers.

“Lots of people call what they make graphene. There are no standards, no definition,” Jon Myers, CEO of US-based Graphene Technologies told a delegation in Berlin. “But to be honest I’d do the same – if I had a 50 layer platelet, I’d call it graphene, to.”

Graphene clearly has a ground swell of interest on a global scale. While it may be a long time before we see true, game-changing graphene applications, the serious graphene companies must also be as effective at marketing as they are at materials science.

Industrial Minerals on Graphene:

Graphene hype won’t help, say manufacturers (FREE)

Graphene industry needs standard definition

Billion dollar material has zero market

Graphene targets $1.8bn indium market

The post Graphene’s pioneers battle global hype appeared first on American Resources Policy Network.

2013 rebound after poor year

2012 has been a poor year for graphite demand. Trading activity has been sapped out of the industry since September with little sign of return until the New Year.

The conference heard that Chinese production is predicted to have fallen by around 4% in 2012 primarily due to slowing construction markets around the world and a reduction in the need for steel and refractories.

China is also pushing to regulate its graphite industry – a dated and fragmented industry – with a blanket ban on new graphite processing plants in Shandong, a major producing province.

The Chinese government is eager to limit lower value exports in favour of higher value products. In the context of graphite, at present it ships raw material to Japan or South Korea to be made into battery anodes and batteries which it buys back and a premium rate.

This situation strengthens the argument for new mines outside of China and supply diversity is high on the agenda for the graphite industry.

These factors alongside an anticipated rise in demand have encouraged market entry, however Stephen Riddle, CEO of Asbury Carbons, has urged the industry to learn from the mistakes of its past and avoid flooding the market with supply.

This was seen in the early 1990s, when a string of new graphite mines went into production before promptly going out of business due the emergence of low cost Chinese production and shortfalls in anticipated demand. This caused production to nearly half between 1990 and 1995, and by the early 2000s all but one of five new mines went bankrupt.

Natural Graphite end markets in 2012

Source: The Natural Graphite Report 2012, Industrial Minerals Research
 
 
Industrial Minerals Data

Industrial Minerals Data is a new service providing detailed prices and analysis the graphite and fluorspar industries launching January 2012.

Simon Moores, Manager, Industrial Minerals Data – smoores@indmin.com
Andy Miller, Junior Analyst, Industrial Minerals Data – amiller@indmin.com

The Natural Graphite Report 2012

Launched in October 2012, The Natural Graphite Report is an extensive market study focusing solely on natural flake, vein and amorphous graphite supply, demand and pricing.

Data, analysis and forecast for the next five years

• New, original data from Industrial Minerals
• Unique country supply reviews including: China, Brazil, India, North Korea, and Canada
• Major demand drivers – Li-ion batteries, refractories, & emerging markets
• How will prices react? Historical analysis and forecast
• Demand destruction risks
• Critique of the graphene revolution

For more information click here.

The post EV uncertainty dominates discussion at Graphite Conference – Part 2 appeared first on American Resources Policy Network.

The future for electric vehicle (EV) batteries dominated discussion at Industrial Minerals 2nd Graphite Conference in London last week, despite being only the fourth largest market for the industry.

Graphite’s use as the anode material of choice in lithium-ion batteries has gained it critical mineral status which has buoyed the sector over the last 18 months. By volume graphite is the largest raw material used in lithium-ion batteries – an electric vehicle (EVs) contains between 28kg and 28kg of graphite.

The question still remains how much graphite will be needed if EVs take off. The battery sector serving EV manufacturers has the potential to grow at 20% a year, but by volume is still far off the leading consuming market – refractories.

Refractories – high temperature linings and bricks consumed primarily in steel manufacturing – consumed 39% of natural graphite production in 2012 with batteries accounting for 9%.

Despite this, discussions centred on EV battery potential and the technology to process the raw material into a product suitable for the sector, namely spherical graphite.

China holds the bulk of spherical graphite processing technology at present, something which is of concern to western manufacturers. China also produced 79% of natural graphite output in 2012, an even more immediate concern to the industry eager to avoid a rare-earths style dependency.

These are some of the main factors that have sparked into exploration activity over the last 18 months, especially in Canada which has led the world’s search for new graphite projects. These newer entrants were understandably more bullish on future demand than existing producers at the conference.

Graphite has recently gone through what lithium and rare earths experienced a few years ago. The furore which engulfed the industry in 2011 has calmed significant in 2012 as access to investment became difficult for many publically traded junior companies in North America.

2013 is expected to see an upturn.

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