Monday 22nd October 2018

Resource Clips


All posts by Greg Klein - Resource Clips

Visual Capitalist and Benchmark Mineral Intelligence: Battery megafactory forecast for 400% increase in capacity by 2028

October 22nd, 2018

by Jeff Desjardins | posted with permission of Visual Capitalist

Battery megafactory forecast 400% increase in capacity to 1 TWh by 2028

The Chart of the Week is a Friday feature from Visual Capitalist.

 

When ground broke on the massive Tesla Gigafactory in Nevada in 2014, the world marveled at the project’s audacity, size and scope.

At the time, it was touted that the cutting-edge facility would be the largest building in the world by footprint, and that the Gigafactory would single-handedly be capable of doubling the world’s lithium-ion battery production capacity.

What many did not realize, however, is that although as ambitious and as forward-looking as the project sounded, the Gigafactory was just the start of a trend towards scale in the battery-making space. While Tesla’s facility was the most publicized, it would ultimately be one of many massive factories in the global pipeline.

Mastering scale

Today’s data comes to us from Benchmark Mineral Intelligence and it forecasts that we will see a 399% increase in lithium-ion battery production capacity over the next decade—enough to pass the impressive 1 TWh milestone.

Here is a more detailed projection of how things will shape up in the coming decade:

Region Capacity (GWh, 2018) Capacity (GWh, 2023) Capacity (GWh, 2028)
Grand total 220.5 658 1,102.5
China 134.5 405 631
Europe 19.6 93.5 207
North America 20.9 81 148
Other 0 0 5
Asia (excl China) 45.5 78.5 111.5

In just a decade, lithium-ion battery megafactories around the world will have a combined production capacity equivalent to 22 Tesla Gigafactories!

The majority of this capacity will be located in China, which is projected to have 57% of the global total.

The top plants globally

According to Benchmark, the top 10 megafactories will be combining for 299 GWh of capacity in 2023, which will be equal to almost half of the global production total.

Here are the top 10 plants, sorted by projected capacity:

Rank Megafactory Owner Country Forecasted capacity by 2023 (GWh)
#1 CATL Contemporary Amperex Technology Co Ltd China 50
#2 Tesla Gigafactory 1 Tesla Inc/Panasonic Corp (25%) US 50
#3 Nanjing LG Chem New Energy Battery Co. Ltd. LG Chem China 35
#4 Nanjing LG Chem New Energy Battery Co. Ltd. Plant 2 LG Chem China 28
#5 Samsung SDI Xian Samsung SDI China 25
#6 Funeng Technology Funeng Technology (Ganzhou) China 25
#7 BYD , Qinghai BYD Co Ltd China 24
#8 LG Chem Wroclaw Energy Sp. z o.o. LG Chem Poland 22
#9 Samsung SDI Korea Samsung SDI Korea 20
#10 Lishen TianJin Lishen Battery Joint-Stock Co. Ltd. China 20

Of the top 10 megafactory plants in 2023, the majority will be located in China—meanwhile the U.S. (Tesla Gigafactory), South Korea (Samsung) and Poland (LG Chem) will be home to the rest.

Reaching economies of scale in lithium-ion battery production will be a significant step in decreasing the overall cost of electric vehicles, which are expected to surpass traditional vehicles in market share by 2038.

Posted with permission of Visual Capitalist.

October 22nd, 2018

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The new colonialists

October 19th, 2018

China’s overseas expansion raises concerns of influence and arrogance

by Greg Klein

The country boosts its domestic industries through state-sanctioned dumping along with lax environmental, health and safety standards. Aggressive overseas expansion provides money and infrastructure to struggling nations in return for resources and acquiescence. Espionage, counterfeit exports, currency manipulation, economic warfare, intellectual theft—“particularly the systematic theft of U.S. weapons systems”—that’s all part of China’s goal to gain “veto authority over other nations’ economic, diplomatic and security decisions,” according to a recent U.S. study ordered by President Donald Trump.

So it seems a bit anti-climactic to accuse the Red Dragon of arrogance.

But could that become China’s undoing, especially when the arrogance reflects racism? Examples from Kenya reveal a steady stream of racially charged incidents. Among the most recent was ongoing racist abuse from the manager of a Chinese-owned assembly plant. A Chinese company running a much bigger Kenyan operation, the Standard Gauge Railway, faces accusations of practising racial preferences and segregation. Further accounts relay instances of demeaning treatment, even assaults, on African workers in their own countries by Chinese bosses.

China’s overseas expansion brings allegations of influence and arrogance

That might be more a side effect than part of the official agenda, which is alarming in itself. According to Globe and Mail Africa correspondent Geoffrey York, Chinese influence “is sharply increasing in African media, academia, politics and diplomacy.” Earlier this month he reported that a South African newspaper chain backed by Chinese investors fired a columnist who denounced their country’s treatment of Muslims.

“In Zambia, heavily dependent on Chinese loans, a prominent Kenyan scholar was prevented from entering the country to deliver a speech critical of China. In Namibia, a Chinese diplomat publicly advised the country’s president to use pro-China wording in a coming speech. And a scholar at a South African university was told that he would not receive a visa to enter China until his classroom lectures contain more praise for Beijing.”

York pointed to “the huge number of African leaders who flock to the summit of China’s main African organization, the Forum on China-Africa Cooperation (FOCAC),” an annual conference featuring announcements of Chinese financial aid. At last month’s event, President Xi Jinping promised grants, loans and investments totalling $60 billion, equaling an amount pledged three years earlier.

China’s massive African infrastructure projects, built by Chinese companies that often enjoy Chinese government financial support, include railways and hydro-electric power. But Chinese interests also get their hands on Africa’s mineral resources as well as oil and gas reserves, not to mention new markets for Chinese exports. Chinese loans have been criticized for overwhelming African countries with debt.

In the values that it promotes, in the manner that it operates and in the impact that it has on African countries, FOCAC refutes the view that a new colonialism is taking hold in Africa, as our detractors would have us believe.—South African
President Cyril Ramaphosa

Then there’s the political influence. The spectacle of African leaders singing China’s praises has provoked cynicism that South African President and FOCAC co-chairperson Cyril Ramaphosa tried to dispel: “In the values that it promotes, in the manner that it operates and in the impact that it has on African countries, FOCAC refutes the view that a new colonialism is taking hold in Africa, as our detractors would have us believe.”

Those remarks might alternately challenge or support allegations of sycophancy. But York notes China’s success in convincing African countries to drop their support for Taiwan, promoting Chinese language and culture, increasing media ownership with attendant interference, and—laughably, considering the communist state’s journalistic standards—providing “‘training’ for 1,000 African media professionals annually.”

Such are the challenges faced by the developing world. And others too.

From Australia come additional examples. “The hubris of the Chinese Communist Party has reached a great and giddy high,” the Sidney Morning Herald declared last month. International editor Peter Hartcher recounted a meeting between Chinese finance minister Lou Jiwei and Australian treasurer Joe Hockey in which Lou lit a cigarette without asking permission, then badgered the Aussie with big talk that included offers to take over Rio Tinto, buy 15% of the top 200 ASX-listed companies or grab multi-billion-dollar positions in Australian banks.

Hartcher mentioned another incident a few years ago, when “a Chinese minister walked into the Parliament House office of an Australian Liberal Party minister in the course of a negotiation.

“The visitor sat on the sofa, reclined with his hands locked behind his head, and put his feet up on the coffee table. He crossed his ankles casually, the soles of his shoes pointed towards his Australian host. A mere detail, yes, but a telling one. It infuriated the Australian, who was still steaming as he recounted the story years later.”

Then there’s the threats. In a Sydney meeting last year, Hartcher writes, Labor opposition leader Bill Shorten and two of his key people heard Chinese Communist Party official Meng Jianzhu demand their party support an extradition treaty. They objected, largely due to China’s death penalty.

“To get his way, Meng threatened to mobilize the Chinese diaspora living in Australia to vote against the Labor party. The Labor leaders were unbowed and unimpressed. ‘We cannot let these bastards push us around,’ one later remarked to a colleague. Labor continued to oppose the extradition treaty.”

Score one for Down Under determination. Hartcher warns that China could meet its comeuppance once the country’s economic growth stops, possibly in a decade or so. Still, that gives the Middle Kingdom considerable time to expand its influence in acquiescent countries, which need not be limited to the developing world.

Like Canada, for example. Do our politicians match Australian Labor’s resolve? Do our media match the Sidney Morning Herald’s candour? Or would the example of HD Mining International, which planned to staff underground operations at a British Columbia mine exclusively with Chinese workers, typify Canada’s response?

October 19th, 2018

Michael Burry’s six books that every investor should read Equities.com
One more thing to worry about, Saudi edition GoldSeek
October doesn’t disappoint: Volatility returns after a tranquil third quarter Stockhouse
Market looks to SQM to ensure adequate iodine supply in 2019 Fastmarkets IM
Lithium, cobalt prices enter new period of volatility as era of EV begins; vanadium awaits lithium-ion moment Benchmark Mineral Intelligence
The geology of Cerro Rico, greatest of the great Geology for Investors

October 18th, 2018

One more thing to worry about, Saudi edition GoldSeek
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Market looks to SQM to ensure adequate iodine supply in 2019 Fastmarkets IM
Lithium, cobalt prices enter new period of volatility as era of EV begins; vanadium awaits lithium-ion moment Benchmark Mineral Intelligence
The geology of Cerro Rico, greatest of the great Geology for Investors

October 17th, 2018

Here’s where the next financial crisis begins Equities.com
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Lithium, cobalt prices enter new period of volatility as era of EV begins; vanadium awaits lithium-ion moment Benchmark Mineral Intelligence
The geology of Cerro Rico, greatest of the great Geology for Investors

Belmont Resources/MGX Minerals expand Nevada lithium drilling

October 16th, 2018

by Greg Klein | October 16, 2018

Similarities to the Clayton Valley and successful exploration so far have prompted two potential JV partners to plan a busy autumn at their Kibby Basin lithium project. Belmont Resources TSXV:BEA and MGX Minerals CSE:XMG now plan up to 1,465 metres over four holes in an area where geophysics found a strong magnetotelluric conductor. Added to the agenda are downhole geophysics to search for possible aquifers.

Belmont Resources/MGX Minerals expand Nevada lithium drilling

Drilling begins soon on a program that follows last season’s
encouraging lithium results at Kibby Basin in Nevada.

Earlier this month the companies delivered another 59 core samples from hole KB-3 for assays. In September Belmont and MGX announced results from the same hole that twice reached a high of 580 ppm lithium.

This season’s downhole geophysics will take over where previous water samples met unexpected technical complications. Lithium concentrations in water samples failed to show anomalous results despite the core sample assays. A new approach including downhole geophysics will “improve the chances to accurately locate layers of high conductivity and porosity and allow high-quality, representative samples to be taken where lithium concentrations are potentially higher,” the companies stated.

Having already earned 25% of the project, MGX has until year-end to increase its stake to 50%. The companies hope to form a 50/50 JV that would use rapid lithium extraction technology developed by MGX. The method won MGX the Base and Specialty Metals Industry Leadership Award at the 2018 S&P Global Platts Global Metals Awards in London last May.

Located about 50 kilometres north of Clayton Valley, the 2,056-hectare Kibby Basin project shares a number of similarities with the region hosting North America’s only lithium-producing operation, including a “closed structural basin, a large conductor at depth, lithium anomalies at surface and depth, evidence of a geothermal system and potential aquifers in porous ash and gravel zones,” the companies stated.

In northern Saskatchewan Belmont and International Montoro Resources TSXV:IMT share a 50/50 stake in the Crackingstone and Orbit Lake uranium properties.

Belmont closed a private placement totalling $375,000 in July.

Read Isabel Belger’s interview with Belmont CFO/director Gary Musil.

October 16th, 2018

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Market looks to SQM to ensure adequate iodine supply in 2019 Fastmarkets IM
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Lithium, cobalt prices enter new period of volatility as era of EV begins; vanadium awaits lithium-ion moment Benchmark Mineral Intelligence
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De Beers CEO Bruce Cleaver attributes admirable motivations to diamond demand

October 15th, 2018

…Read more

October 15th, 2018

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