Sunday 25th June 2017

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Converging on batteries

April 23rd, 2017

Benchmark sees big investors wakening as three huge sectors chase three vital minerals

by Greg Klein

It’s “a sign of the times that big investors with big money are starting to look at this space in a serious way,” Simon Moores declared. “We’re seeing it with lithium, that’s just starting. And I think we’re going to see it with the other raw materials as well.” To that he attributes the automotive, high-tech and energy sectors for their “convergence of three multi-trillion-dollar industries on batteries.”

Addressing a Vancouver audience on the April 21st inaugural stop of the third annual Benchmark Mineral Intelligence World Tour, he pointed out that cobalt and graphite have yet to match lithium for investors’ attention. But not even lithium has drawn the financing needed to maintain supply over the long term.

Benchmark sees investment lagging as three huge sectors chase three vital minerals

While EVs still lead the battery-powered revolution, energy storage
will become more prominent after 2020, according to Simon Moores.

Back in 2006, batteries accounted for 22% of lithium demand. Ten years later the amount came to 42%. “We believe in 2020, 67% of lithium will be used for batteries.”

What’s now driving the battery market, almost literally, is electric vehicles. Energy storage will play a more prominent role from about 2020 onwards, he maintained.

He sees three cars in particular that should lead the trend: Tesla Model 3, Chevrolet Volt and Nissan Leaf. As consumers turn to pure electric vehicles with battery packs increasing capacity to the 60 to 70 kWh range and beyond, the industry will sell “hundreds of thousands of cars rather than tens of thousands… the era of the semi-mass market for EVs is beginning and it’s beginning now, this year.”

Last year’s lithium-ion market reached 70 GWh, Moores said. Forecasts for 2025 range from Bloomberg’s low of about 300 GWh to Goldman Sachs’ 440 GWh and a “pretty bullish” 530 GWh from Cairn Energy Research Advisors. As for Benchmark, “we’re at the lower end” with a base case of about 407 GWh.

“What does that mean for lithium demand? A lot of raw materials will be needed and the investment in that space is just starting.”

Lithium’s 2016 market came to about 80,000 tonnes. By 2020, demand will call for something like 180,000 to 190,000 tonnes. While battery-grade graphite demand amounted to about 100,000 tonnes last year, “by 2020, that will be just over 200,000 tonnes.” As for battery-grade cobalt, last year’s market came to just under 50,000 tonnes. “By 2020 it’s going to need to get to about 80,000 to 85,000.”

Benchmark sees investment lagging as three huge sectors chase three vital minerals

Simon Moores: “No other mineral
out there has this kind of price profile.”

Investment so far favours lithium but for each of the three commodities, it’s “not enough, not for the long term,” he stressed.

Three years ago only two battery megafactories had been envisioned. Now in operation, under construction or being planned are 15, with the number expected to grow. “That’s going to be needed if we’re ever going to get anywhere near the forecast that everyone’s saying. Not just us, not just Bernstein or Goldman Sachs, everyone is saying significant growth is here but investment is needed.”

But although Tesla gets most of the headlines, “the new lithium-ion industry is a China-centric story.” The vast majority of megafactories are Chinese plants or joint ventures with Chinese entities operating in South Korea or Japan. “The majority of their product goes to China.”

At the end of last month lithium carbonate averaged $12,313 a tonne while lithium hydroxide averaged about $17,000. Spot deals in China, meanwhile, have surpassed $20,000.

That compares with prices between 2005 and 2008 of around $4,000 for lithium carbonate and $4,500 for lithium hydroxide. Only slightly higher were averages for 2010 to 2014. But prices spiked in 2015 and 2016. “Between now and 2020 we believe lithium carbonate will be in and around an average of $13,000 a tonne and lithium hydroxide will be closer to $18,000 a tonne.”

Those long-term averages “are important for people building mines and investing in this space.”

Except for 2010, lithium prices have shown 11 years of increases, corresponding with battery demand. “No other mineral out there has this kind of price profile.”

Moores sees no oversupply or price crash for lithium in the next five years. Spodumene-sourced lithium “will fill the short-term supply deficit and brines will help fill the longer-term supply deficit post-2019 and 2020,” he said. “Both are needed to have a strong, balanced industry in the future.”

Turning to graphite, he noted that batteries had zero effect on the market in 2006. By 2016 they accounted for 16% of demand. By 2020, that number should jump to 35%.

While flake graphite comprises the feedstock for most anode material, “really, the price you should look at is spherical graphite.” That’s fallen lately to about $2,800 a tonne.

Moores foresees better margins for companies producing uncoated spherical graphite. “The people who make the coated will also make good margins, but not as good as in the past. For this reason, and because battery buyers are becoming more powerful and there’s more competition in the space, we believe the coated spherical graphite price will actually fall in the long term average, but will still be between $8,000 and $12,000 a tonne. So there’s very high value and significant demand for this material.”

He also sees natural graphite increasing its anode market share over synthetic graphite. “That’s a cost issue primarily, but there are green issues too.”

Silicon, he added, “will play a part in anodes but it will be an additive, not a replacement.”

Speaking with ResourceClips.com after the event, Moores said Benchmark World Tour attendees differ by city. The Vancouver audience reflected the resource sector, as well as fund managers attracted by BMO Capital Markets’ sponsorship. Tokyo and Seoul events draw battery industry reps. Silicon Valley pulls in high-tech boffins.

This year’s tour currently has 15 cities scheduled with two more under consideration, he noted. That compares with eight locations on the first tour in 2015. Moores attributed the success to Benchmark’s access to pricing and other sensitive info, as well as Benchmark’s site visits. “We go to China and other countries and visit the mines,” he said. “Our travel budget is through the roof. We’re not desktop analysts.”

USGS: Possibility of supply disruption more critical than ever

April 5th, 2017

by Greg Klein | April 5, 2017

USGS: Possibility of supply disruption more critical than ever

Many and various are the sources of smartphone minerals.
(Map: U.S. Geological Survey)

 

In another article warning of foreign dependency, the U.S. Geological Survey uses smartphones as a cautionary example. Looking back 30 years ago, “‘portable’ phones were the size of a shoebox and consisted of 25 to 30 elements,” pointed out Larry Meinert of the USGS. “Today they fit in your pocket or on your wrist and are made from about 75 different elements, almost three-quarters of the periodic table.”

USGS: Possibility of supply disruption more critical than ever

Smartphones now require nearly 75% of the periodic
table of the elements. (Graphic: Jason Burton, USGS)

The increasing sophistication of portable communications results from a “symphony of electronics and chemistry” that includes, for example, “household names like silicon, which is used for circuit boards, or graphite used in batteries. Then there are lesser known substances like bastnasite, monazite and xenotime. These brownish minerals contain neodymium, one of the rare earth elements used in the magnets that allow smartphone speakers to play music and the vibration motor that notifies you of new, funny cat videos on social media,” the USGS stated.

Almost as varied are the sources. “For instance, the industrial sand used to make the quartz in smartphone screens may come from the United States or China, but the potassium added to enhance screen strength could come from Canada, Russia or Belarus. Australia, Chile and Argentina often produce the lithium used in battery cathodes, while the hard-to-come-by tantalum—used in smartphone circuitry—mostly comes from Congo, Rwanda and Brazil.”

Rwanda and the Democratic Republic of Congo are also sources of conflict minerals.

“With minerals being sourced from all over the world, the possibility of supply disruption is more critical than ever,” Meinert emphasized.

The April 4 article follows a previous USGS report on an early warning system used by the U.S. Defense Logistics Agency to monitor supply threats. In January the USGS released a list of 20 minerals for which the country relies entirely on imports. Whether or not by design, the recent awareness campaign coincides with a bill before U.S. Congress calling on government to support the development of domestic deposits and supply chains for critical minerals.

See an illustrated USGS report: A World of Minerals in Your Mobile Device.

Read about the West’s dependence on non-allied countries for critical minerals here and here.

Elon Musk’s hidden agenda

April 1st, 2017

As he makes sci-fi reality, what on Earth motivates his mission to Mars?

by Greg Klein

He’s making sci-fi reality, but what on Earth motivates his mission to Mars?

A pioneer ponders her new planet, but the truth is down here. (Image: SpaceX)

 

Just two days ago—March 30—Elon Musk pulled off yet another stunning techno-coup by launching a pre-used rocket then landing it intact, ready for further re-use. Not only does that rate as a truly historic achievement, but it marks another milestone in his audacious plan to colonize Mars. Just what drives this guy?

His CV is phenomenal. Musk started with Zip2 and PayPal, went on to build the world’s most coveted electric cars, then supplemented them with a country-wide network of fast recharging stations and a growing empire of Gigafactories that he’ll likely merge with his unprecedented vertically integrated Solarcity green energy utility/storage battery company.

He’s making sci-fi reality, but what on Earth motivates his mission to Mars?

Whether with awe, apprehension or impatience, the first
Martians-to-be prepare to disembark at their new home.
(Image: SpaceX)

He’s actually booked tourists for a 2018 around-the-moon cruise. He’s pushing extraordinarily high-speed, long-distance pneumatic tube travel, musing about Internet access in outer space and working to wire people’s brains to computers.

Yes, he loses money on every Tesla he sells and a couple of his Falcon 9 rockets blew to smithereens. But Musk’s stunning success record would seem to make science fiction plausible. Has he finally strained credibility with the Mars colony? And, again, just what drives this guy?

As to the first question, a surprising number of experts consider the idea viable. Musk’s SpaceX, already in the business of transporting cargo and satellites into orbit, plans unmanned Mars trips in 2018 and 2020. The company has modelled craft that would initially ferry 100 people at a time on an 80-day voyage for about US$200,000 each. Later ships with greater capacity and a 30-day trip time would cut fares dramatically. Upwards of 10,000 return voyages within 40 to 100 years would give Mars an Earthling diaspora numbering one million people, enough to create a self-sustaining civilization, he claims. Necessities like air, water, food and radiation protection can all be realized, he insists.

The visionary CEO sees the first colonists arriving well within a decade.

But why does he strive for this, when he has his hands more than full with other soaring ambitions? And, with all the possible pitfalls, why risk capping a phenomenal career with monumental failure?

He’s making sci-fi reality, but what on Earth motivates his mission to Mars?

No symbolism is too obvious
for a little country.
(Image: SpaceX)

Musk speaks of our eventual extinction on Earth. But according to battery expert Raymond Tylerson, Musk’s real motivation lies in his need for resources. They’re not the extraterrestrial kind sought by those who would mine the heavens. They’re right here on Earth.

Almost completely overlooked in the mania about the battery minerals graphite, cobalt and lithium has been one essential ingredient, points out Tylerson. That’s lithium’s near-namesake, lithuanium.

“For every bushel of graphite, cobalt and lithium that goes into these suckers, you need only one demi-iota of lithuanium,” he explains. “That doesn’t sound like much until you realize it’s absolutely the most scarce commodity on the planet.”

Moreover, as its moniker memorializes, it’s found in only one place—the uniquely lithuanium-lush lithology of Lithuania. That gives the little country a lockhold on the most critical mineral of all.

Emma Rothstein recognizes the danger. A psychologist who specializes in nationwide borderline personality disorders, she says, “For its entire existence, Lithuania’s been pushed around by big country bullies. Now it’s fighting back. Make no mistake, this little country has big, big ambitions. It wants to achieve on an inter-galactic scale the domination it can’t possibly achieve on Earth. With their monopoly on lithuanium, Lithuanians have forced Musk into their service.”

Classified documents released by the Transparency Foundation confirm that Lithuania has guaranteed Musk exclusive rights to lithuanium provided he carries out the country’s expansionist agenda.

Not only might Musk be the one person most likely to succeed at interplanetary travel, but Lithuanians might be the one people most likely to succeed at interplanetary colonization.

“I mean, who the hell else would want to go?” asks Rothstein. “That 80-day trip would be worse than a group package vacation. It brings to mind the saying that hell is other people. By the time they’d arrive the colony would be screwed because they’d all hate each other’s guts. But not so with Lithuanians. They’ve always co-operated with each other despite the fact that they’ve always hated each other’s guts.”

But Musk faces formidable competition, she adds. “I recognized that as soon as NASA reported it was growing potatoes in a Mars-like environment. It was so obviously just another outcome of Little Country Syndrome.”

This little country is actually a province, tiny Prince Edward Island.

“Imagine what it’s been like, to start off as the birthplace of Canadian confederation only to find yourself by far the puniest province with the puniest population and an economy based almost entirely on potatoes. Puny PEI and its puny potato-pulling people carry an inter-galactic grudge matching that of Lilliputian Lithuania.

He’s making sci-fi reality, but what on Earth motivates his mission to Mars?

Musk: Could there be
something different about him?

“Don’t underestimate these pushy little people,” she warns. “They’ve already taken over NASA. Mars might be next.”

So who’s poised to win the burgeoning battle for the universe? “My money’s on anyone backed by Musk,” declares Kyle McCormick, a professor of sociological astronomy. “He doesn’t just talk about an interplanetary species. He comes from one himself. You don’t think he accomplished all that with Earthling expertise, do you? Listen to his speech, look at his eyes—he’s more alien than Mr. Spock.”

Then what’s he doing here?

“He just had to get away from his own planet,” McCormick responds. “Musk considers it a really tiresome, insufferably do-good crunchy granola save-the-endangered-whatever environmentally superior place. He’s sick to death of all that clean energy crap. Once he saves up enough trillions he intends to buy the entire U.S.A., pave it and compel everyone to drive around all day in huge dangerous noisy stinking gas-guzzling vehicles.

“He wants to turn America into one big monster truck extravaganza. And fossil fuels will be mandatory.”

 

Related news:
Juniors, brokers, promoters desert Toronto to revive the Vancouver Stock Exchange.
Ontario Ring of Fire development begins.
Mining company inspires Canadian political reform.

Battery infographic series Part 5: The future of battery technology

February 23rd, 2017

by Jeff Desjardins | posted with permission of Visual Capitalist | February 23, 2017

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

The future of battery technology

This is the last instalment of the Battery Series. For a recap of what has been covered so far, see the evolution of battery technology, the energy problem in context, the reasons behind the surge in lithium-ion demand and the critical materials needed to make lithium-ion batteries.

There’s no doubt that the lithium-ion battery has been an important catalyst for the green revolution, but there is still much work to be done for a full switch to renewable energy.

The battery technology of the future could:

  • Make electric cars a no-brainer choice for any driver

  • Make grid-scale energy storage solutions cheap and efficient

  • Make a full switch to renewable energy more feasible

Right now, scientists see many upcoming battery innovations that promise to do this. However, the road to commercialization is long, arduous and filled with many unexpected obstacles.

The near-term: Improving the Li-ion

For the foreseeable future, the improvement of battery technology relies on modifications being made to already-existing lithium-ion technology. In fact, experts estimate that lithium-ions will continue to increase capacity by 6% to 7% annually for a number of years.

Here’s what’s driving those advances:

Efficient manufacturing

Tesla has already made significant advances in battery design and production through its Gigafactory:

  • Better engineering and manufacturing processes

  • Wider and longer cell design allows more materials packaged into each cell

  • New battery cooling system fits more cells into battery pack

Better cathodes

Most of the recent advances in lithium-ion energy density have come from manipulating the relative quantities of cobalt, aluminum, manganese and nickel in the cathodes. By 2020, 75% of batteries are expected to contain cobalt in some capacity.

For scientists, it’s about finding the materials and crystal structures that can store the maximum amount of ions. The next generation of cathodes may be born from lithium-rich layered oxide materials (LLOs) or similar approaches, such as the nickel-rich variety.

Better anodes

While most lithium-ion progress to date has come from cathode tinkering, the biggest advances might happen in the anode.

Current graphite anodes can only store one lithium atom for every six carbon atoms—but silicon anodes could store 4.4 lithium atoms for every one silicon atom. That’s a theoretical tenfold increase in capacity!

However, the problem with this is well documented. When silicon houses these lithium-ions, it ends up bloating in size up to 400%. This volume change can cause irreversible damage to the anode, making the battery unusable.

To get around this, scientists are looking at a few different solutions.

1. Encasing silicon in a graphene “cage” to prevent cracking after expansion.

2. Using silicon nanowires, which can better handle the volume change.

3. Adding silicon in tiny amounts using existing manufacturing processes—Tesla is rumoured to be doing this already.

Solid-state lithium-ion

Lastly, a final improvement that is being worked on for the lithium-ion battery is to use a solid-state setup, rather than having liquid electrolytes enabling the ion transfer. This design could increase energy density in the future, but it still has some problems to resolve first, such as ions moving too slowly through the solid electrolyte.

The long term: Beyond the lithium-ion

Here are some new innovations in the pipeline that could help enable the future of battery technology:

Lithium-air

Anode: Lithium

Cathode: Porous carbon (oxygen)

Promise: 10 times greater energy density than Li-ion

Problems: Air is not pure enough and would need to be filtered. Lithium and oxygen form peroxide films that produce a barrier, ultimately killing storage capacity. Cycle life is only 50 cycles in lab tests

Variations: Scientists also trying aluminum-air and sodium-air batteries

Lithium-sulphur

Anode: Lithium

Cathode: Sulphur, carbon

Promise: Lighter, cheaper and more powerful than Li-ion

Problems: Volume expansion up to 80%, causing mechanical stress. Unwanted reactions with electrolytes. Poor conductivity and poor stability at higher temperatures

Variations: Many different variations exist, including using graphite/graphene, and silicon in the chemistry

Vanadium flow batteries

Catholyte: Vanadium

Anolyte: Vanadium

Promise: Using vanadium ions in different oxidation states to store chemical potential energy at scale. Can be expanded simply by using larger electrolyte tanks

Problems: Poor energy-to-volume ratio. Very heavy, must be used in stationary applications

Variations: Scientists are experimenting with other flow battery chemistries as well, such as zinc-bromine

Battery series conclusion

While the future of battery technology is very exciting, for the near and medium terms scientists are mainly focused on improving the already-commercialized lithium-ion.

What does the battery market look like 15 to 20 years from now? It’s ultimately hard to say. However, it’s likely that some of the above new technologies will help in leading the charge to a 100% renewable future.

Thanks for taking a look at the Battery Series.

See Part 1, Part 2, Part 3 and Part 4.

Posted with permission of Visual Capitalist.

NRG Metals expands size of potential lithium option in Argentina, resumes trading

February 21st, 2017

by Greg Klein | February 21, 2017

NRG Metals TSXV:NGZ resumed TSXV activity February 21, following the expansion of its Carachi Pampa option and completion of a 43-101 technical report. The company has also applied for a drill permit for the Argentinian lithium prospect, now increased from 6,387 hectares to 29,182 hectares.

NRG Metals expands size of potential lithium option in Argentina, resumes trading

Now 29,182 hectares in size, Carachi Pampa hosts
a low-resistivity zone that’s open in all directions.

Located about 3,000 metres’ elevation in the Andes, the property sits in the same region as FMC’s Salar del Hombre Muerto lithium mine and Galaxy Resources’ Sal de Vida lithium-potash project, which reached feasibility in 2013. Carachi Pampa has road access within 10 kilometres.

Using a common geophysical approach to finding potential brine zones in Argentina, NRG conducted a vertical electrical survey on the property. Of four zones tested, one showed extremely low resistivity, a characteristic of brine zones. The zone begins at 70 metres in depth and dips to 300 metres, the company stated. At least 150 metres thick, it’s open at depth and in all directions laterally. Awaiting a permit, the company anticipates exploration drilling.

With all figures in American currency, the acquisition comes with an initial price of $172,911 and 100,000 shares. Pending satisfactory exploration results, NRG would pay another $535,000 and 100,000 shares to sign a definitive agreement. Additional payments would bring the total to $6.72 million over 54 months.

Earlier this month NRG completed the spinout of its non-core assets, the Groete gold-copper project in Guyana and the LAB graphite project in Quebec, to Gold Port Resources. The new company will focus on Groete, which has a 2013 inferred resource that used a 0.22 g/t gold-equivalent cutoff:

  • 74.8 million tonnes averaging 0.49 g/t gold and 0.12% copper, or 0.66 g/t gold-equivalent, for 1.59 million gold-equivalent ounces

LAB sits adjacent and contiguous to Lac des Iles, the largest of North America’s two flake graphite mines.

NRG closed an oversubscribed private placement of C$1.51 million in December.

NRG Metals completes due diligence on Argentinian lithium properties

November 21st, 2016

by Greg Klein | November 21, 2016

Among the companies active in South America’s Lithium Triangle, NRG Metals TSXV:NGZ has finished due diligence on two properties that would comprise the Carachi Pampa project in northwestern Argentina. Totalling 6,387 hectares, the contiguous properties sit in an area hosting geological features common to other lithium-rich salars in the region, the company stated on November 18. “The lithium target is a paleo salar (basin) at depth that has the potential to host lithium-enriched brines.”

NRG Metals completes due diligence on Argentinian lithium properties

NRG sees potential for lithium-enriched brines
in the Lithium Triangle’s Carachi Pampa project.

Located 40 kilometres from the town of Antofagasta de la Sierra at about 3,000 metres in elevation, the properties have winter access, a paved road 10 kilometres away and nearby services.

NRG has retained experienced lithium explorers Rojas and Associates and Sergio Lopez and Associates to review the project, with Rojas to complete a 43-101 technical report.

The properties are subject to different four-year purchase agreements, according to an LOI announced September 21. With all dollar figures in U.S. currency, one property calls for $120,000 on signing a definitive agreement, $200,000 in each of three annual payments and $600,000 at the end of the fourth year. A 1% NSR applies, which NRG may buy back for $1 million.

The other project would cost $160,000 on signing, $100,000 in two annual payments, $250,000 in year three and $625,000 in year four. Again, the company may buy back the 1% NSR for $1 million.

NRG offered a private placement up to C$1 million. Additionally, the company has negotiations underway on other properties.

In October NRG announced a management team for its Argentinian subsidiary, NRG Metals Argentina S.A. Executive director James Duff has written several 43-101 reports for Argentinian projects and served as COO of McEwen Mining TSX:MUX acquisition Minera Andes and president of South American operations for Coeur Mining NYSE:CDE.

Non-executive director José Gustavo de Castro is a chemical engineer with extensive experience in the evaluation and development of Argentinian lithium projects including the continent’s largest lithium producer, FMC Corp’s Hombre Muerto operation.

Manager of business development and corporate relations José Luis Martin’s 35-year career includes senior positions with Galaxy Lithium S.A. and Rio Tinto’s (NYSE:RIO) Argentinian projects.

Director Jorge Vargas specializes in property, mining and business law in Argentina.

Also last month NRG announced plans to spin out other assets to concentrate on lithium. The portfolio currently includes the LAB graphite project in Quebec and the Groete gold-copper resource in Guyana.

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.

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 looks 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.

NRG Metals to focus on lithium, plans to spin out other assets

October 21st, 2016

by Greg Klein | October 21, 2016

A new company would take on graphite and gold-copper projects as NRG Metals TSXV:NGZ concentrates on lithium. In a proposed plan of arrangement announced October 21, the company would spin out its Groete gold-copper property in Guyana and its LAB graphite project in Quebec into a newly created subsidiary. NRG shareholders would get shares of the spinco on a pro rata basis.

NRG Metals to focus on lithium, plans to spin out other assets

NRG signed an LOI to acquire the Carachi Pampa
properties in South America’s Lithium Triangle.

Subject to shareholder and regulatory approvals, the deal would transfer the two properties and pay approximately $150,000 to an entity referred to as GPRL “as well as certain accounts payable attributable to these projects.” Plans call for the spinco to apply for a public listing.

NRG describes Groete as “one of the most easily accessed large gold-copper resources in Guyana, having both deep water and electrical power/support infrastructure within approximately 30 kilometres.” The project has a 2013 resource using a 0.22 g/t gold-equivalent cutoff for a pit shell showing:

  • inferred: 74.8 million tonnes averaging 0.49 g/t gold and 0.12% copper, or 0.66 g/t gold-equivalent, for 1.59 million gold-equivalent ounces

The LAB project sits adjacent and contiguous to Lac des Iles, the largest of North America’s two flake graphite mines. NRG has conducted sampling, metallurgy, airborne magnetics and TDEM surveys, and a ground PhySpy survey on the project.

Last month the company announced two letters of intent to acquire Argentinian properties within South America’s Lithium Triangle and stated it’s “also negotiating on several other lithium opportunities located elsewhere in Argentina and Chile.”

NRG has offered a private placement of up to $1 million.

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.