Wednesday 7th December 2016

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Posts tagged ‘cobalt’

American election fosters forecasting frenzy

November 11th, 2016

by Greg Klein | November 11, 2016

An anti-establishment crusader, a dangerous extremist or a sensible person given to outrageous bombast, that new U.S. president-elect has some mining and metals observers in as much of a tizzy as the official commentariat.

Soon after the election result was announced, the World Gold Council cheered as their object of affection passed $1,300, “compared with $1,275 an ounce before the vote counting began.

U.S. election fosters forecasting frenzy

“We are seeing increasingly fractious politics across the advanced economies and this trend, combined with uncertainty over the aftermath of years of unconventional monetary policies measures, will firmly underpin investment demand for gold in the coming years,” the WGC maintained.

Two days later gold plunged to a five-month low, “hit by a broad selloff in commodities as well as surging bond yields on speculation a splurge of U.S. infrastructure spending could stoke inflation.” At least that was Reuters’ explanation.

GoldSeek presented a range of comments, with Brien Lundin predicting a short rally for gold. GATA’s Chris Powell suggested the metal’s status quo would prevail. “Trump won’t be giving instructions to the Fed and Treasury until January, if he even has any idea by then of the market rigging the government does.”

About a day after that comment, Reuters noted that Trump’s team had been courting big banking bigshot Jamie Dimon of JPMorgan Chase & Co for Treasury secretary.

Powell added that a post-election “great grab for physical gold” might overpower “the paper market antics of the central bank. But geopolitical turmoil hasn’t done much for gold in recent decades and I’d be surprised if that changed any time soon.”

A pre-existing rally pushed copper past $6,000 a tonne on November 11, which Bloomberg (posted in the Globe and Mail) attributed to “Chinese speculators and bets that Donald Trump will pour money into U.S. infrastructure.”

Initial effects of Trump’s 10-year, $10-trillion campaign promise are “unlikely to kick in until the third quarter of 2017 and would in our view have the largest effect on steel, zinc and nickel demand,” Goldman analyst Max Layton told the Financial Times.

The FT also quoted Commerzbank cautioning that “metal prices still appear to be supported by the euphoria exhibited by market participants in the wake of Trump’s election victory, a reaction we find somewhat inexplicable.”

Industrial Minerals called a copper bubble.

Some sources consulted by the journal wondered whether the “pragmatic businessman” would carry out his threatened restrictions to free trade. As for Trump’s climate scepticism and opposition to green energy subsidies, Chris Berry told IM the economic case alone will sustain vehicle electrification and the resulting demand for lithium, cobalt and graphite.

Looking at a more sumptuous form of carbon, Martin Rapaport declared, “The diamond and jewelry trade will benefit as the new policies create a more prosperous middle class and greater numbers of wealthy consumers. Global uncertainty will also increase demand for investment diamonds as a store of wealth.”

But the outsider’s victory might have shocked Rapaport into ambiguity. While saying the election “sets the stage for growth and development,” a preamble to his November 9 press release called the result “positively dangerous.”

Not to be left out of the forecasting frenzy, ResourceClips.com predicts the Yukon tourist industry will add Frederick Trump, the Donald’s bordello-owning granddad, to its romanticized cast of colourful Klondike characters.

Amnesty International researcher Mark Dummett warns that brand name consumer items might contain conflict cobalt

November 1st, 2016

…Read more

King’s Bay Gold to acquire never-drilled copper-cobalt property in Labrador

October 28th, 2016

by Greg Klein | October 28, 2016

An intriguing chance find has King’s Bay Gold TSXV:KBG hoping the Trans-Labrador Highway will be a road to discovery. That’s the story behind the company’s October 27 announcement of a definitive agreement to acquire the Lynx Lake copper-cobalt property in south-central Labrador.

King’s Bay Gold to acquire never-drilled copper-cobalt property in Labrador

Powerlines and the Trans-Labrador Highway
run adjacent to the Lynx Lake copper-cobalt property.

As Newfoundland was building the highway in 2008, a provincial contractor with prospecting experience noticed evidence of disseminated and massive sulphides, King’s Bay geologist/director Nick Rodway explains. Some geological sleuthing eventually drew the contractor to the property’s east side, where a quarry had been blasted for aggregate.

Grab samples assayed the following year showed non-43-101 results up to 1.39% copper, 0.94% cobalt, 0.21% nickel and 6.5 g/t silver. Regional low-res magnetic surveys undertaken by the province and preliminary work in 2014 with a hand-held EM-16 device suggest strong conductors underlying the area.

Grab samples taken on the property’s west side in 2015 brought non-43-101 results up to 1.03% copper, 0.566% cobalt, 0.1% nickel, 5 g/t silver, 0.36% chromium, 0.39% molybdenum and 0.23% vanadium.

With a team returning to Lynx Lake next week, King’s Bay intends to conduct a sampling program to bring 43-101 results, along with further EM-16 surveys. Should all go to plan, airborne geophysics could follow this winter.

Open to year-round work, highway-accessible and with adjacent powerlines, the 20-square-kilometre property sits about 100 kilometres southeast of the town of Happy Valley-Goose Bay.

Subject to approvals, the acquisition costs King’s Bay $100,000 over three years and 900,000 shares over two years. On October 27 the company also announced a private placement of up to $1 million.

The news comes amid growing concerns over future cobalt supply. Nearly 60% of global production comes from the Democratic Republic of Congo, a country rife with political instability and conflict mining.

At the same time increased demand comes from “the energy storage revolution,” reports Benchmark Mineral Intelligence. Its data shows “2015 total global supply at 100,000 tpa, of this the battery market consumed 48,000 tpa.

“With a lithium-ion battery production surge well underway—and Benchmark recently revising its megafactories tracker to now 14 that are under construction ranging from three- to 35-GWh capacity—lithium-ion battery demand for cobalt is set to exceed 100,000 tpa by 2020.”

Battery infographic series Part 4: The critical ingredients needed to fuel the battery boom

October 27th, 2016

by Jeff Desjardins | posted with permission of Visual Capitalist | October 27, 2016

The Battery Series will present five infographics exploring what investors need to know about modern battery technology, including raw material supply, demand and future applications.

 

The critical ingredients needed to fuel the battery boom

 

We’ve already looked at the evolution of battery technology and how lithium-ion technology will dominate battery market share over the coming years. Part 4 of the Battery Series breaks down the raw materials that will be needed for this battery boom.

Batteries are more powerful and reliable than ever and costs have come down dramatically over the years. As a result, the market for electric vehicles is expected to explode to 20 million plug-in EV sales per year by 2030.

To power these vehicles, millions of new battery packs will need to be built. The lithium-ion battery market is expected to grow at a 21.7% rate annually in terms of the actual energy capacity required. It was 15.9 GWh in 2015, but will be a whopping 93.1 GWh by 2024.

Dissecting the lithium-ion

While there are many exciting battery technologies out there, we will focus on the innards of lithium-ion batteries as they are expected to make up the vast majority of the total rechargeable battery market for the near future.

Each lithium-ion cell contains three major parts:

1. Anode (natural or synthetic graphite)

2. Electrolyte (lithium salts)

3. Cathode (differing formulations)

While the anode and electrolytes are pretty straightforward as far as lithium-ion technology goes, it is the cathode where most developments are being made.

Lithium isn’t the only metal that goes into the cathode—other metals like cobalt, manganese, aluminum and nickel are also used in different formulations. Here’s four cathode chemistries, the metal proportions (excluding lithium) and an example of what they are used for:

 

Cathode Type Chemistry Metals needed Example Use
NCA LiNiCoAlO2 80% Nickel, 15% Cobalt, 5% Aluminum Tesla Model S
LCO LiCoO2 100% Cobalt Apple iPhone
LMO LiMn2O4 100% Manganese Nissan Leaf
NMC LiNiMnCoO2 Nickel 33.3%, Manganese 33.3%, Cobalt 33.3% Tesla Powerwall

 

While manganese and aluminum are important for lithium-ion cathodes, they are also cheaper metals with giant markets. This makes them fairly easy to procure for battery manufacturers. Lithium, graphite and cobalt are all much smaller and less-established markets—and each has supply concerns that remain unanswered:

    South America: The countries in the Lithium Triangle host a whopping 75% of the world’s lithium resources—Argentina, Chile and Bolivia.

    China: 65% of flake graphite is mined in China. With poor environmental and labour practices, China’s graphite industry has been under particular scrutiny and some mines have even been shut down.

    Indonesia: Price swings of nickel can impact battery makers. In 2014, Indonesia banned exports of nickel, which caused the price to soar nearly 50%.

    Democratic Republic of Congo: 65% of all cobalt production comes from the DRC, a country that is extremely politically unstable with deeply rooted corruption.

    North America: Companies such as Tesla have stated that they want to source 100% of raw materials sustainably and ethically from North America. The problem? Only nickel sees significant supply come from the continent.

Cobalt hasn’t been mined in the United States for 40 years and the country produced zero tonnes of graphite in 2015. There is one lithium operation near the Tesla Gigafactory 1 but it only produces 1,000 tonnes of lithium hydroxide per year. That’s not nearly enough to fuel a battery boom of this size.

To meet its goal of a 100% North American raw materials supply chain, Tesla needs new resources to be discovered and extracted from the U.S., Canada or Mexico.

Raw material demand

While all sorts of supply questions exist for these energy metals, the demand situation is much more straightforward. Consumers are demanding more batteries and each battery is made up of raw materials like cobalt, graphite and lithium.

Cobalt:

Today about 40% of cobalt is used to make rechargeable batteries. By 2019, it’s expected that 55% of total cobalt demand will go to the cause. In fact, many analysts see an upcoming bull market in cobalt.

In many ways, the cobalt industry has the most fragile supply structure of all battery raw materials.—Andrew Miller,
Benchmark Mineral Intelligence

    Battery demand is rising fast

    Production is being cut from the Congo

    A supply deficit is starting to emerge

Graphite:

There are 54 kilograms of graphite in every battery anode of a Tesla Model S (85 kWh). Benchmark Mineral Intelligence forecasts that the battery anode market for graphite (natural and synthetic) will at least triple in size from 80,000 tonnes in 2015 to at least 250,000 tonnes by the end of 2020.

Lithium:

Goldman Sachs estimates that a Tesla Model S with a 70-kWh battery uses 63 kilograms of lithium carbonate equivalent (LCE)—more than the amount of lithium in 10,000 cell phones. Further, for every 1% increase in battery electric vehicle market penetration, there is an increase in lithium demand by around 70,000 tonnes LCE per year.

Lithium prices have recently spiked but they may begin sliding in 2019 if more supply comes online.

The future of battery tech

Sourcing the raw materials for lithium-ion batteries will be critical for our energy mix. But the future is also bright for many other battery technologies that could help in solving our most pressing energy issues.

Part 5 of the Battery Series will look at the newest technologies in the battery sector.

See Part 1, Part 2 and Part 3 of the battery infographic series.

Posted with permission of Visual Capitalist.

Nickel One Resources moves closer to PGE-copper-nickel acquisition in Finland

October 19th, 2016

by Greg Klein | October 19, 2016

Nickel One Resources moves closer to Finnish PGE-copper-nickel acquisition

Over $10 million in previous work has given Lantinen Koillismaa
resource estimates for two potential open pits.

Nickel One Resources’ (TSXV:NNN) Finland entry took another step forward with a binding letter agreement announced October 19. Already holding the Tyko project in western Ontario, Nickel One would get a 100% interest in Finore Mining’s (CSE:FIN) Lantinen Koillismaa platinum group element-copper-nickel project in north-central Finland. An LOI was announced in August.

The property would come through the purchase of Finore subsidiary Nortec Minerals Oy in a deal costing five million shares and 2.5 million warrants exercisable at $0.12 for two years. Nickel One has paid $50,000, which would be applied to a private placement of up to $100,000 into Finore following due diligence.

Benefiting from over $10 million in previous work, LK has 2013 resource estimates for two potential open pits.

The Kaukua deposit shows:

  • indicated: 10.4 million tonnes averaging 0.73 g/t palladium, 0.26 g/t platinum, 0.08 g/t gold, 0.15% copper, 0.1% nickel and 65 g/t cobalt

  • inferred: 13.2 million tonnes averaging 0.63 g/t palladium, 0.22 g/t platinum, 0.06 g/t gold, 0.15% copper, 0.1% nickel and 55 g/t cobalt

The Haukiaho deposit has three zones totalling:

  • inferred: 23.2 million tonnes averaging 0.31 g/t palladium, 0.12 g/t platinum, 0.1 g/t gold, 0.21% copper, 0.14% nickel and 61 g/t cobalt

The acquisition would bring Nickel One into “a mining-friendly jurisdiction with some of the best infrastructure in the world,” commented president Vance Loeber. The project also provides “a foothold in Finland from which we will be taking a hard look at other opportunities to continue to build a strong portfolio of projects,” he added.

Read more about Nickel One Resources and the Lantinen Koillismaa acquisition.

Conflict cobalt uncertainty continues to haunt consumer industries

October 3rd, 2016

by Greg Klein | October 3, 2016

Nine months after issuing a report on cobalt produced by child labour, Amnesty International says major manufacturers still can’t guarantee conflict-free sources.

The organization’s January report focused on the Democratic Republic of Congo, where children work in dangerous conditions up to 12 hours a day, making between $1 and $2 a day. “In 2014 approximately 40,000 children worked in mines across southern DRC, many of them mining cobalt, according to UNICEF,” Amnesty noted.

Conflict cobalt uncertainty continues to haunt consumer industries

DRC children sorting ore.
(Photo: Amnesty International/Afrewatch)

“Frankly companies owe it to their consumer to be transparent about their supplies and to map out their supply chains so that they know where it’s coming from,” Amnesty researcher Mark Dummett told Thomson Reuters Foundation, the charitable arm of the Thomson Reuters news agency. He maintains there’s no guarantee that the lithium-ion batteries in brand name consumer items, including vehicles, phones, computers and other devices, aren’t tainted with conflict cobalt.

Oddly enough, U.S. laws barring conflict minerals don’t cover cobalt. The Amnesty report stated at least half the world’s supply originates in the DRC, with about one-fifth of the national total coming from artisanal mines.

Benchmark Mineral Intelligence attributes over 60% of global output to the DRC.

While several manufacturers said they were scrutinizing their sources, Dummett countered that they weren’t disclosing what efforts they made to exclude child labour from their supply chains.

Last month Industrial Minerals reported that RealLi Research analyst Mo Ke told a Beijing conference there would “probably be a shortage next year” of the commodity. “Some commentators, such as Ian Pringle, managing director of Bayrock Materials and Pacific Basin Bluestone, thinks that this is an understatement,” IM added.

Already suffering from civil and political unrest, the DRC was hit by corruption allegations last week from the U.S. Securities and Exchange Commission. An SEC lawsuit claims that a DRC partner of the Och-Ziff Capital Management Group bribed government officials with more than US$100 million over 10 years.

An anonymous source alleged the partner was Dan Gertler, Bloomberg reported. “Glencore and Gertler’s Fleurette Group are partners in the $1.8-billion Mutanda copper and cobalt mine in the African country, with Glencore owning 69% and Fleurette the remainder,” the news agency added. Gertler and Fleurette denied allegations of wrongdoing.

In May Freeport-McMoRan NYSE:FCX announced a definitive agreement to sell its stake in the DRC’s Tenke copper-cobalt mine to China Molybdenum for US$2.65 billion and a contingent consideration of up to US$120 million. But a Bloomberg dispatch from last month stated that Gécamines, the DRC’s state-owned mining company and a co-owner of Tenke, said any decision by Lundin Mining TSX:LUN to divest its 24% share of the mine could threaten the deal.

Download the Amnesty International report.

A cautious approach

September 16th, 2016

Jon Hykawy discusses lithium, cobalt and a battery-fuelled frenzy

by Greg Klein

Making its Western Hemisphere debut in Toronto from September 26 to 28, Mines and Money kicks off with a full day dedicated to battery metals. That would seem to cast a resoundingly positive vote in lithium’s boom-or-bubble debate. But while conference speaker Jon Hykawy sees an enduring case for the celebrated commodity, he counsels investors to tread carefully.

A physicist with an MBA in marketing who’s covered energy metals and industrial minerals for Byron Capital Markets, he’s been focusing much of his attention on rechargeable batteries, fuel cells and renewable energy since founding Stormcrow Capital.

He sees renewed optimism in resources generally, especially in battery materials. But he sounds wary about lithium’s most recent price increases.

Jon Hykawy discusses lithium, cobalt and a battery-fuelled frenzy

“They look to me like what I would have expected if we had major producers that weren’t yet under pressure to increase output, speculators buying and warehousing material for future sale, and some panic buying and resulting over-stocking by end-users,” Hykawy tells ResourceClips.com. “It’s the situation we had in uranium back in 2007 and 2008 and with rare earths in 2010 and 2011. That’s not to say there’s going to be a catastrophic collapse in prices because fundamental demand for lithium is growing at a pretty respectable pace. But it doesn’t mean that every junior is going to see production.”

Of course assessing juniors involves assessing their projects. That brings up the distinction between two types of deposits, brine and pegmatite.

Brines generally offer lower operating costs, he points out. But “there are only so many natural brines out there. Some natural brines are problematic, some are in bad jurisdictions. No one’s going to go into Bolivia under the current government. That eliminates one of the largest resources in the world.

“But recently we’ve had new technologies come to the fore that could enable alternative brines that hadn’t been considered viable at any reasonable economic level,” Hykawy adds. Extraction processes developed by companies like POSCO, Eramet and Tenova Bateman Technologies “can pull lithium directly out of brine,” eliminating the lengthy solar evaporation phase.

That would open up more types of brines, for example fossilized brines from oil fields, which might hold a very good grade of lithium but a huge quantity of calcium or magnesium. And it opens up different locales.—Jon Hykawy, president of Stormcrow Capital

“Some of these technologies don’t worry as much or at all about the contaminants that conventionally impact solar evaporation production,” he continues. “That would open up more types of brines, for example fossilized brines from oil fields, which might hold a very good grade of lithium but a huge quantity of calcium or magnesium. And it opens up different locales. Let’s say you’re pulling lithium out of brine from oil fields near the U.S. gulf coast. The high humidity and heavy rainfall works against solar evaporation. But if you have a direct extraction technology, you can put that lithium through the process. If it ignores contaminants, all the better.”

He credits speed as the biggest advantage of hard rock deposits. “Once you’ve got a hard rock lithium mine up and running, the time it takes to pull ore out of the ground and turn it into saleable product is measured in days. That makes hard rock mines look like far more reliable suppliers.” The advantage comes with a higher opex, however.

Then there’s the distinction between lithium hydroxide and lithium carbonate. The latter results from solar evaporation of brine and served as “ a decent feedstock for the initial type of lithium-ion battery that used lithium-cobalt oxide as a cathode material.”

Better suited to more modern battery chemistries, however, is lithium hydroxide, now considered “something of a wonderkid,” Hykawy says.

It’s associated with hard rock deposits, but not limited to them. Solar evaporation of brine can produce lithium chloride in solution or carbonate as a precipitate, he explains. “You can then send the carbonate or chloride to a processing company that will turn it into lithium hydroxide.”

That makes market share comparisons for carbonate and hydroxide problematic when it’s not clear how much hydroxide originated as carbonate.

“Some technologies can produce carbonate or hydroxide directly from brine, but they’re not in commercial use yet. Over time the industry will become more flexible.”

Hydroxide fetches the higher prices. “What you’re really paying for in lithium carbonate or hydroxide are the lithium units, the actual amount of lithium chemical…. Today you’re getting a very substantial premium for lithium units in hydroxide, much more than you’d expect. That suggests to me there’s a secular shortage of hydroxide and people are willing to pay up, especially in the spot market, because they themselves don’t have the ability to buy carbonate and convert it into hydroxide.”

Looking at graphite, he’s satisfied that increasing demand can be met by existing producers and up-and-coming projects. But cobalt presents a more intriguing story.

Normally mined as a byproduct of copper or nickel, most of it comes from the conflict-plagued Democratic Republic of Congo, where production has been reduced or suspended with the decline in base metals prices.

While battery demand raises cobalt prices, steel acts as a restraint. More than half of cobalt production has gone to the troubled industry. “That’s becoming less and less a factor in cobalt prices because a growing component of cobalt, well over 40% today, now goes into batteries.”

Cobalt prices have been climbing but, Hykawy says, “if you have access to them, the cobalt sulphates that are actually used in batteries have done far better in price than the cobalt metal.”

Getting back to lithium’s boom-versus-bubble debate, Hykawy takes the latter position. “Yeah, there’s momentum to be played, but just understand the floor you’re standing on might not be as strong as you thought…. There’s a long-term, strong growth trend in lithium demand and the prospects for lithium companies. But pick your entry points and the horse you’re going to ride carefully.”

Hykawy addresses the Mines and Money Battery Metals conference at St. Andrew’s Club in Toronto on September 26.

A second flagship

August 11th, 2016

Nickel One Resources plans a Finnish acquisition as well as Ontario drilling

by Greg Klein

A position in Scandinavia would give Nickel One Resources TSXV:NNN a dual approach or, as president/CEO Vance Loeber describes it, “a double-barrelled shotgun.” On August 11 the company announced an LOI to gain a Finore Mining CSE:FIN subsidiary with a 100% interest in Lantinen Koillismaa, a nickel-copper-PGE deposit in an active mining region of Finland. Additionally, encouraged by positive results from last spring’s assays, the company plans to resume drilling on its Tyko project in Ontario.

Nickel One Resources plans Finnish acquisition as well as Ontario drilling

With equally spectacular aurora borealis, arctic Finland
boasts far greater infrastructure than northern Canada.

A 3,750-hectare property just 65 kilometres south of the Arctic Circle, LK actually enjoys a favourable location—and that demonstrates the contrast between the Canadian and Scandinavian north. An all-weather, government-maintained road comes right to the property, a rail line runs 40 kilometres away and Oulu, a Gulf of Bothnia port that’s home to 200,000 people, sits 160 kilometres west. Work is practical right through the winter, as several mines and three smelters in the region attest.

“The local community is very supportive, the Finnish Geological Survey is very supportive and it’s a beautiful place to work,” enthuses Loeber.

Finore took LK to resource level in 2013 for two deposits with open pit potential. The Kaukua deposit shows:

  • indicated: 10.4 million tonnes averaging 0.73 g/t palladium, 0.26 g/t platinum, 0.08 g/t gold, 0.15% copper, 0.1% nickel and 65 g/t cobalt

  • inferred: 13.2 million tonnes averaging 0.63 g/t palladium, 0.22 g/t platinum, 0.06 g/t gold, 0.15% copper, 0.1% nickel and 55 g/t cobalt

Three zones at the Haukiaho deposit total:

  • inferred: 23.2 million tonnes averaging 0.31 g/t palladium, 0.12 g/t platinum, 0.1 g/t gold, 0.21% copper, 0.14% nickel and 61 g/t cobalt

Further study might put a new perspective on the resource. “Although the plan is to look at it from a fresh approach, a higher-grade/lower-tonnage point of view, we’re not going to lose sight of the higher-tonnage aspect either,” explains Loeber. “But in the short term we’ll be looking at some higher-grade tonnage, both through additional exploration and a re-engineered 43-101 report.”

A new perspective maybe, but from experienced eyes. “With this acquisition we also get the combined geological talent of Finore’s founders, Mohan Vulimiri and Peter Tegart,” Loeber points out. “They’re pretty serious guys so it’s not like we’re going in blind.”

Another Finland veteran is Nickel One VP of exploration and former PDAC president Scott Jobin-Bevans. “He did his PhD dissertation on this type of mineralization,” says Loeber.

The deal would cost Nickel One five million shares. The company would also contribute up to $100,000 towards any future private placement undertaken by Finore. Loeber doesn’t offer an anticipated closing date but says his team wants the deal wrapped up “sooner rather than later.”

But looking at Finland doesn’t mean neglecting western Ontario. “Tyko is still very much in our sights. We had some great results in our initial program and we’re planning a late-summer, early-fall follow-up program.”

That would take the crew about 40 kilometres north of Hemlo in an area that’s surprisingly more remote than arctic Finland. Still, Tyco’s accessible by highway, logging roads and float plane.

The 14 holes and 1,780 metres drilled so far this year followed 13 holes and 2,230 metres sunk by North American Palladium TSX:PDL up to 2007. Nine North American holes revealed mineralization.

Near-surface intercepts reported by Nickel One in June returned as much as 1.47% nickel, 0.49% copper and 0.71 ppm PGEs over 6.05 metres. Another assay showed 1.06% nickel, 0.35% copper and 0.65 ppm PGEs over 6.22 metres. Along with the other results, the company sees increasing optimism in its magma conduit theory suggesting a potential link between the property’s RJ and Tyko zones, 1.5 kilometres apart.

The extent of Tyco’s upcoming program remains “finance-dependent,” Loeber says. But given market response to the LOI, he’s confident of raising funds. As for a closing date for LK, “We’re going to make this happen as quickly as we can.”

Visual Capitalist puts the new Tesla Gigafactory in perspective

July 27th, 2016

by Jeff Desjardins | posted with permission of Visual Capitalist | July 27, 2016

Tesla Motors officially unveils its massive new Gigafactory 1 at a grand opening on July 29.

The ultimate objective of the first Gigafactory is simple, but it is not for the faint of heart. Battery costs are the most expensive component of electric vehicles and the multi-billion-dollar Gigafactory aims to combine scale, vertical integration and other efficiencies to bring lithium-ion battery costs down.

Costs have already come down faster than most analysts predicted and the Gigafactory could be the final catalyst to get below the industry’s holy grail of $100 per kWh. Cheaper battery packs could make electric vehicles competitive with traditional gas-powered vehicles—and if that happens, it is a game-changer for the auto industry.

It’s important to note that the Gigafactory is fairly modular by design and construction is not complete yet. That said, here is what we know about the Gigafactory and its possible impact.

 

The Tesla Gigafactory 1 will be the largest building in the world by footprint.

Visual Capitalist puts the new Tesla Gigafactory in perspective

The Gigafactory will take up 5.8 million square feet of space, making it bigger than Boeing’s giant facility in Everett, Washington. That’s roughly equivalent to 100 football fields.

While the Gigafactory will certainly be one of the largest factories by volume, it will be hard to compete with Boeing for first place there. Boeing’s Everett facility, which is six storeys high to accommodate construction of the giant planes, has a total of 472 million cubic feet of volume.

 

The scale will make production of lithium-ion batteries way cheaper

Visual Capitalist puts the new Tesla Gigafactory in perspective

Tesla recently stated that its current battery cost is $190 per kWh for the Model S. The Gigafactory aims to reduce battery costs by 30%. Tesla expects this to happen through vertical integration, adding economies of scale, reducing waste, optimizing processes and tidying up the supply chain.

Tesla CEO Elon Musk has also stated that the company is changing the form factor of the batteries from the industry standard. Lithium-ion cells used for notebook computer batteries are typically produced in an 18650 cell format (18mm x 65mm), but Tesla will produce them in a 20700 cell format (20mm x 70mm).

 

Tesla initially planned to produce 50 GWh of battery packs by 2020

Visual Capitalist puts the new Tesla Gigafactory in perspective

 

However, Tesla has now moved that target forward by two years

Visual Capitalist puts the new Tesla Gigafactory in perspective

Now it’s anticipated that Tesla could triple battery production to meet this demand. This means it could produce up to 105 GWh of battery cells and 150 GWh of completed battery packs. Musk says the current factory size will be sufficient for this ramp-up.

 

This will require serious amounts of raw materials

Visual Capitalist puts the new Tesla Gigafactory in perspective

We previously showed the extraordinary amounts of materials needed to build a Tesla Model S. The batteries, which currently use an NCA cathode formulation, need lithium, graphite, cobalt, nickel and other base metals that aren’t used as much in an internal combustion engine.

This has created a significant rush for suppliers of these raw materials. It’s also something we are covering in our five-part battery series, in which we are looking at lithium-ion battery demand, as well as the materials that will need to be sourced as electric cars go mainstream.

 

If Tesla hits its 2018 projection, it will be a serious milestone for EVs

Visual Capitalist puts the new Tesla Gigafactory in perspective

Tesla aims to sell 500,000 cars in 2018. If it hits the mark, it will be a big milestone for the electric vehicle market.

To put that number in perspective, the total amount of sales (all time) for the three most popular EV models (Leaf, Volt, Model S) added up to only about 404,000 cars as of December 2015.

 

This would also put Tesla on par with major auto brands

Visual Capitalist puts the new Tesla Gigafactory in perspective

Tesla is still a small auto manufacturer—but if it meets its stated production goal of 500,000 vehicles in 2018, that will be comparable with brands like Chrysler, Land Rover, Isuzu, Volvo and Lexus.

This still doesn’t compare to a giant like Ford, which sold 780,354 F-series pickups alone in 2015. But it is a step in the right direction for Elon Musk’s company.

 

Every 500,000 electric cars on the road saves 192 million gallons of gas

Visual Capitalist puts the new Tesla Gigafactory in perspective

That’s equal to 290 Olympic-sized swimming pools filled with gasoline or 21,333 tanker trucks. Even taking into account coal power and pollution, driving a Tesla is already far better for the environment in most American states.

 

Other Giga-facts

Visual Capitalist puts the new Tesla Gigafactory in perspective

The Gigafactory will be 100% powered by renewable energy. It’ll have solar panels covering the roof while also drawing power from wind and geothermal.

It will employ 6,500 people and it will have a state-of-the-art recycling system to make use of old battery packs.

Musk says the “exit rate” of lithium-ion cells from the Gigafactory will literally be faster than bullets from a machine gun.

 

Bonus slide

Visual Capitalist puts the new Tesla Gigafactory in perspective

Last week Musk unveiled the “master plan” behind Tesla. The Gigafactory will ultimately help make these ambitions possible.

Posted with permission of Visual Capitalist.

July 20th, 2016

Franklin Sanders interviews JPMadoff author Helen Davis Chaitman GoldSeek
Remembering the dotcom bubble burst Equities.com
Nickel near eight-month high as metals gain on stimulus speculation NAI 500
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New stock market highs correlate to $57 trillion in printed global currency units Streetwise Reports
Canada welcomes move towards ratification of EU trade deal Industrial Minerals
Gold junior climbs on assays SmallCapPower
A classic case of failed socialism: What’s next after Brexit? Stockhouse
Limestone: Commodity overview Geology for Investors
Lithium in Las Vegas: A closer look at the lithium bull The Disruptive Discoveries Journal