Lithium

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 for electric vehicle technology is surging. Undoubtedly, EV technology has transformative effects on commodities – but what exactly are we looking at?

Visual Capitalist, which often features fascinating infographics, has attempted to capture “the massive impact on EVs on commodities in one chart.” One should note that the chart is based on a thought experiment – a potential scenario in which 100% of global auto demand came form Chevy Bolts – which at this point sounds far-fetched. However, with Visual Capitalist cites a recent projection put EVs at a 16% penetration by 2030 and then 51% by 2040, it’s a potential scenario worth considering. 

Take a look at a large version of the infographic and the corresponding article here. 

The outlined implications of a flip of global demand to the outlined 100% demand scenario are staggering:

Source: http://www.visualcapitalist.com/massive-impact-evs-commodities/

If you are interested in more background information on EV battery technology, and supply and demand scenarios, our friends at Benchmark Mineral Intelligence are putting on yet another great event in October, entitled “Cathodes 2017 – the battery market’s only dedicated cathode conference, from raw material to end market.”
Hosted from October 8-10 in California’s Newport Beach, the event brings together experts and stakeholders for “3 days of presentations, workshops and networking events all dedicated to examining the present and future of the cathode industry.”

Check it out – it will be worth your time. 

ARPN followers know it’s the elephant in the room. China. Already vast and resource-rich, the country has demonstrated an insatiable appetite for the world’s mineral resources and has pursued an aggressive strategy to gain access to the materials needed to meet the world’s largest population’s resource needs.

Thus, it comes as no surprise that China is also jockeying for “Pole Position,” as Robert Blain writes for China Daily Asia Weekly in what may well be one of the hottest commodity fields of our time: EV battery technology and the electric car industry as a whole – from “vehicle manufacturing and sales to battery technology.” 

Demand for EV technology is surging in China, as electric and hybrid car sales are growing at a rapid pace. A recent survey cited in the article found that while Germany took the top spot for EV technology, China is emerging as an industry leader: “In industry, China has confirmed its pole position. The reason for this is the continuing rapid growth of the market, more than 90 percent of which is supplied with lithium- ion cells produced locally. This high local share is partly due to the fact that subsidies only apply where there is local value creation.”

 The article heavily quotes our friend and member of the ARPN panel of experts, Simon Moores of Benchmark Minerals. Moores believes that “there is no doubt China is the global hub for the electric vehicle revolution.” 

He is quoted as saying: 

“China is producing its own electric vehicles, but the export vehicles are first likely to be Western-branded ones. For example, [US electric-car maker] Tesla is looking to make batteries in a new Gigafactory near Shanghai. This is the first step in making Tesla EVs in China for the domestic and export market. VW [Volkswagen] has similar grand plan.”

Ultimately, according to Moores, “for foreign car manufacturers to have power in the EV market, ‘they need to be in China.’”

The article continues: 

“China is also very well positioned in the production and export of lithium-ion batteries typically used to power electric cars. ‘China already produces the bulk of lithium-ion battery cathode material,’ said Moores. ‘It is locking up the lithium supply chain through Ganfeng Lithium and to a lesser extent Tianqi Lithium. It controls cobalt supply and battery grade refining and produces the vast majority of the world’s graphite anode material.’ Nearly 70 percent of all new lithium-ion battery capacity being built in new megafactory structures will be based in China, he said.”

In a recent commentary for Investor’s Business Daily, our very own Dan McGroarty pointed out China’s prominent role as a lead supplier of the world’s mineral resources :

“As noted by the U.S. Geological Survey, we are 100% import-dependent for 20 metals and minerals, and 50% or more dependent for another 50. As for where the U.S. obtains these metals and minerals it needs but does not mine, China is a leading supplier of 28 of the 50 — up from 21 just a year ago.”

Time for policy makers to take note. We may not always be able to significantly reduce our reliance on foreign mineral resources, but where possible, we should work towards that goal – particularly when our lead suppliers are not the most reliable trading partners. We have several opportunities to do so – some of which McGroarty outlined in his commentary.  

China will certainly remain a force to be reckoned with in the mineral resource realm, but Lithium and Lithium-ion technology represent a great case in point for comprehensive mining policy reform in the United States.

In a recent op-ed for the Reno Gazette Journal, professor emeritus of mining engineering at the University of Nevada, Reno, Jaak Daemen makes the case for comprehensive mining policy reform.   Citing the arrival of electric vehicles in which “battery technology is catching up with the hype,” he cautions that benefits benefits associated with the [...]

It may be its most well-known use, but Graphite today is at the core of more than just your pencil – it is at the core of 21st Century consumer technology.  Just ask Elon Musk. The Tesla Motors CEO and futurist recently insinuated that the label “Lithium-Ion battery” may actually be a misnomer for the batteries that power [...]

If you are based out of Washington, DC or happen to be in town on October 21, here’s an event you should not miss: Our friends at Benchmark Minerals, a U.K.-based price data collection and assessment company specializing in the lithium ion battery supply chain, are taking their Benchmark World Tour to Washington, DC.   ARPN expert and Benchmark [...]

Last week, we highlighted what has been one of the bright spots in the metals and minerals sphere in recent months – Lithium.  Potentially one of the most important critical materials of our time because of its application in battery technology, its rise to stardom has cast a shadow on another material that may be [...]

At a time when mineral commodities have been slumping, one material is proving to be the exception to the rule, leading many to hail lithium as “a rare bright spot for miners, amid cratering prices of raw materials tied to heavy industry such as iron ore to coal.”  Via our friend Simon Moores, managing director [...]

As if to confirm Robin Bromby’s recent assessment that “the Lithium story [was] getting stronger,” there have been media announcements that China will be subsidizing purchases of electric (and hydrogen) cars sold between now and 2015 to the tune of roughly $9,800. China’s reported goal of putting five million “new energy cars” on the road [...]

Due to its relevance in battery technology — with Lithium Carbonate being a key component of Lithium-ion batteries — Lithium has received increased attention (though not always positive) in recent years. While the mineral presently only makes the “Watch List” of the American Resources Policy Network’s Risk Pyramid, InvestorIntel’s Robin Bromby sees the Lithium story [...]

Industrial Minerals, the London-based intellectual home of one of our experts, Simon Moores, is hosting a conference on Lithium Supply & Markets in Las Vegas this week. Over the past few years, Lithium has seen increased attention due to its relevance in battery technology. Lithium Carbonate is a key component in the manufacture of Lithium-Ion [...]