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Discussion in 'Energy, Environment, and Policy' started by Blue heaven, Aug 22, 2017.
ABC South West
Years ago at the first TMC gathering (Teslive, now TMC Connect), Elon spoke and was asked about lithium and supply as it related to batteries. He said that lithium 'was the salt in the salad'. Not a whole lot of lithium in a Li-ion battery...but if the Gigafactory spits them out like bullets, a pinch of salt becomes trainloads.
Cobalt might be a problem
Cobalt supply mainly (60% IIRC) comes from Democratic Republic of Congo, which is known to have stability issue with warlords, and ethical issue with child labor. Cobalt price has spiked from $11 to $27 per lb in the last year, historically it was as high as $52 in early 2008 but I don't know the reason. If you have any insight into the Cobalt pricing and supplies, I would love to learn more.
The answer is "no" because cobalt can be produced from tailing streams of almost any nickel or copper mine; the same processes that concentrate nickel and copper (and a number of other minerals) also concentrate cobalt. DRC will always be a major producer because it has the most concentrated (known) cobalt sources in the world, so they're cheapest - but you can get cobalt all over the world. The more the demand, and the higher the prices, the more abundant the supply. And unlike opening up a brand new mine, adding in a new recovery system to the tailings stream doesn't take years to accomplish.
It's actually rather convenient that it's associated with nickel and copper because both of them are needed as well Contrary to what most people expect when they hear "lithium-ion", nickel makes up the largest component of the battery packs by mass.
As for cobalt prices in 2008: rising demand from cell phones, laptops, and aerospace; the US had finished selling off its cobalt reserves; a decline in copper and nickel mining had idled other sources; the DRC had been making threats to cut off exports; and lots of speculation.
Tesla has ample supplies of all the necessary elements through 2018 according to their investor presentation at the battery gigafactory a few months back. So I expect that covers all the batteries needed for the Model 3 and all the batteries needed for their energy products. All the supplies, as well as Tesla can confirm, come from non-detrimental sources. Tesla stated during that presentation that they actively research their sources.
Then what would the roof price be if say, the DRC shut down production over the next couple of years ?
To further confirm the correct points Karen has made, harken back to the graph in post #5: that panic-spike of Co spot prices in 2008 was as steep on the downside as it had been on the rise...falling further and with the classic dead-cat bounce that near-universally follows such commodity price over-reachings.
Do not take this to mean I believe one should be complacent regarding Co supplies and delivery problems. Those needing significant amounts for the foreseeable future need remain vigilant about its market. But there is no market reason supply should not nicely be able to satisfy demand.
Short-term: as the notable dip in Chinese Cu demand - which caused a significant hiccup in 2015 & 2016 delivery volumes and prices - now has reversed, there will be a concomitant increase in byproduct Co available to slake demand at least through the end of 2018. We should see prices remain in the low $20s/lb through that period.
Quite O/T: of all the terms that stock chartists have created over the centuries, there is none I love more than that pithy, evocative dead-cat bounce. 10 out of 10!
There is a hidden white knight in the cobalt market. Cuba has some pretty big known cobalt deposits that have mines that shut down during the revolution and never re-opened or only opened on a limited basis. Interesting coincidence that Obama started opening the door on normalizing relations with Cuba. Could he have been thinking about securing cobalt deposits in the Western Hemisphere?
I believe Cuba's reserves are #3 in the world and they will be fairly cheap to extract because the mines haven't been player out like a lot of other older deposits around the world.