Showing posts with label Lithium as an investment. Show all posts
Showing posts with label Lithium as an investment. Show all posts

Monday, November 13, 2017

Are Electric Cars As Clean As They Seem?

Authored by Zainab Calcuttawala via OilPrice.com,


Tesla’s unveiling of its mass market Model 3 sparked a global interest in making electric vehicles the next big thing in automobile manufacturing. But can the category’s green agenda keep up with its metal and recycling needs?



The concept of bunking the traditional engine for a non-gas guzzling counterpart has been here for decades, but creating an ecosystem for battery charging and bringing vehicle costs down was a challenge for decades.


The sheer force of Elon Musk’s vision is building the infrastructure needed to sustain millions of electric cars in the United States, Europe, and elsewhere. Most major manufacturers have joined the enthusiasm to ditch old-school engines to construct the international fleet of tomorrow.


But this new step doesn’t solve all of the world’s environmental pollution issues related to transportation. The extraction of rare earth minerals, the disposal of lithium-ion batteries, and the sourcing of the energy that powers charging stations are all issues that plague the future of the green argument for electric vehicles.


As Wired notes in an article from last year, electric vehicles are most efficient when they’re light. That way, they need minimal energy to transport their valuable cargo. In search for a light material to carry and conduct batteries, scientists discovered the power of lithium - a highly conductive metal that adds little burden to the vehicle’s frame.


Discovered in 1817, this key ingredient is mostly extracted from deposits in the United States, Chile, and Australia. The most cost-effective method for lithium processing involves pumping salt-rich waters into special evaporation ponds that eventually produce lithium chloride. Then, a special plant adds sodium carbonate to turn the former lithium chloride into lithium carbonate, a white powder.


The whole process requires power, which more often than not is sourced from fossil fuels, not renewables or nuclear energy. This is similar to the issue electric-car charging stations face when evaluating the efficiency of their establishments in eliminating pollution from the environment. In most parts of the U.S., if the stations source their electricity from the grid, they’re just increasing demand for fossil fuels since coal, oil, and natural gas power the majority of the country anyway. Some states, like California, are obvious exceptions because of their heavy investments in green energy, but for the most part, the pattern holds.


Moreover, lithium batteries need proper facilities in order to be recycled once they reach the end of their lifespan. Tesla’s Gigafactory, which promises to produce the electric car manufacturer’s batteries in an environmentally conscious way, says it will lead a program to recycle the hardware responsibly.


“The challenge that we have with recycling these rare metals is enormous,” author David Abraham, from The Elements of Power, says, “because the products that we have now use metals in such a small quantity that it’s not economic to recycle.”



But larger batteries should make a more convincing argument to start responsive recycling programs. Reusing the metal resources in these devices will lower the emissions and mining of rare minerals from the planet, paving the way for a healthier environmental report for future electric vehicles.


“The more batteries that are out there, in various devices, the more interest there is in figuring out how to recycle them or to recapture rare earth metals [from them],” electric car advocate Chelsea Sexton told Wired.



It truly has become a demand issue. As electric cars become increasingly popular, more services will be needed to deal with their production and disposal, accelerating the development of the vehicle category’s branding as the technology of tomorrow’s green Earth.









Friday, September 15, 2017

Meanwhile, In Lithium Markets...

The last week - since China unveiled its hypocritical plan to ban petrol cars - has seen record inflows into Lithium-related funds.



Trading volumes have exploded higher and prices for LIT (the Lithium and Battery Tech ETF) are back to near 6 year highs.



h/t @EricBalchunas



Never one to miss out on an opportunity, LME is reportedly looking to introduce a contract for lithium (via Mining-Journal.com)...





While details were scarce on the ground, SP Angel expects that the contract would be tied to lithium carbonate concentrate, a major traded raw material for lithium processors and battery producers, and also possibly a contract for lithium hydroxide, a value added product preferred by some downstream consumers.



Both would likely have strict quality controls which might add to costs, SP Angel said.



When contacted by Mining Journal for comment on the possible contracts, a spokesperson for the LME said it had been approached by industry users regarding the introduction of an LME lithium contract and it was looking into this.



“We believe in developing products in conjunction with participants to meet the real needs of the market, and are committed to assessing and enhancing our offering as effectively as possible,” the spokesperson said.



Lithium prices have been on an uptrend recently thanks to increased demand for lithium-ion batteries.



European lithium carbonate/lithium hydroxide supplier Novo Lítio (AU:NLI), formerly Dakota Minerals, says demand forecasts for lithium carbonate equivalent (LCE) range from 550,000-600,000 tonnes per annum by 2025, up from 200,000tpa in 2016, mostly driven by an increase in lithium-ion battery uptake for storage solutions and electric vehicles.



To meet this demand, according to a May report by Roskill, an additional 370,000tpa of LCE production capacity is scheduled to come online by 2020, although it said not all is likely to be realised.



SP Angel said it welcomes the introduction of such contracts, which would help provide the industry a standardised benchmark to use, as opposed to the various short-term, long-term and region-specific prices currently quoted on the market.



It gave the example of lithium carbonate prices fluctuating between US$11-16 per kilogramme for large biannual contracts delivered into the US, while spot delivered into China was quoted at $17.4-22.8/kg in July/August, which it said highlights “the discrepancy in prices for differing contracts and locations.



“We hope the LME can get on and establish this contract ASAP to help better manage and stabilise the market,” it said.



As Climateer Investing notes, to date the only way to participate for non-industry punters has been through mining company equities, almost none of which offer pure-play exposure. Should exposure be what one desires. Our preference was cobalt for which the LME does have a futures contract and whose underlying supply vs. lithium is a bit tighter. As usual though, once you think you"ve found the key they go and change the lock, in this case after the 150% move higher the battery producers are getting very creative with ways to reduce per-battery use of cobalt.


Innovation and substitution: the commodity speculators enemy.