-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
bdy0627
Active Member
I haven't seen much discussion about this. I don't know a lot about it, but apparently the cost of Cobalt is shooting way up, and there is nowhere near enough current global production to support a massive shift to BEVs. From the article:
"When BMW AG revealed it was designing electric versions of its X3 SUV and Mini, the going rate for 21 kilograms of cobalt—the amount of the metal needed to power typical car batteries—was under $600. Only 16 months later, the price tag is approaching $1,700 and climbing by the day. For carmakers vying to fill their fleets with electric vehicles, the spike has been a rude awakening as to how much their success is riding on the scarce silvery-blue mineral found predominantly in one of the world’s most corrupt and underdeveloped countries."
For those who know more about this particular resource issue, could you explain how Tesla is approaching it? Are Tesla's cobalt costs expected to rise substantially as they produce higher volumes of cars? Is there a cobalt substitute for the batteries?
Any of the current energy dense Li chemistries depend on some cobalt, Tesla's NCA uses the least amount of cobalt/kWh that I'm aware of. Cobalt free chemistries are less than half the energy density of Tesla's cells so cobalt is going to be something of a concern for a while.
RobStark
Well-Known Member
COLUMN-What does looming US-China trade showdown mean for aluminum? Andy Home
U.S. producer Alcoa told analysts on its Q1 conference call it is forecasting a 1.5-1.7 million tonne surplus in China this year, notwithstanding Beijing's efforts to restrain capacity.
It is also forecasting a bigger deficit of 2.0-2.2 million tonnes in the rest of the world, where visible stocks have been falling for many months.
U.S. producer Alcoa told analysts on its Q1 conference call it is forecasting a 1.5-1.7 million tonne surplus in China this year, notwithstanding Beijing's efforts to restrain capacity.
It is also forecasting a bigger deficit of 2.0-2.2 million tonnes in the rest of the world, where visible stocks have been falling for many months.
IronRidge Resources expands lithium interests in Ghana
New supply source for Lithium? Ghana (Africa)
New supply source for Lithium? Ghana (Africa)
Those with a resource interest surely have noticed today's action amongst the Lithium plays. As I write this at mid-day Monday -
Lithium Americas -7.28%
Albemarle -8.48%
Soquimich -9.62%
This appears directly to be a function of a Morgan Stanley report asserting that there will be an oversupply of Li in the near-term; MS writes they expect Li prices to peak this year and falling by 45% by 2021.
I'm snagging the above from a Reuters account of MS's remarks; I've no further material. As a GENERAL rule, the time to accumulate high-cost producers is when you expect the underlying commodity's price to be rising; if and when you're expecting a period of falling and low commodity prices the low-cost producers are the ones to hold...however, there is nothing to keep a falling tide from lowering all ships.
Further, as several have mentioned above, SQM is in an interesting position of having a significant fraction of its equity needing to change hands, in that former partner Agrium (Potash Corp of Saskatchewan) agreed to sell it stake as part of an anti-trust agreement. To date, no firm buyer has emerged. At the same time, the company appears to be close to reaching a settlement with the Chilean government for increasing its allowable production from the Atacama salars.
Lithium Americas -7.28%
Albemarle -8.48%
Soquimich -9.62%
This appears directly to be a function of a Morgan Stanley report asserting that there will be an oversupply of Li in the near-term; MS writes they expect Li prices to peak this year and falling by 45% by 2021.
I'm snagging the above from a Reuters account of MS's remarks; I've no further material. As a GENERAL rule, the time to accumulate high-cost producers is when you expect the underlying commodity's price to be rising; if and when you're expecting a period of falling and low commodity prices the low-cost producers are the ones to hold...however, there is nothing to keep a falling tide from lowering all ships.
Further, as several have mentioned above, SQM is in an interesting position of having a significant fraction of its equity needing to change hands, in that former partner Agrium (Potash Corp of Saskatchewan) agreed to sell it stake as part of an anti-trust agreement. To date, no firm buyer has emerged. At the same time, the company appears to be close to reaching a settlement with the Chilean government for increasing its allowable production from the Atacama salars.
Interesting interview with Benchmark Mineral Intelligence:
Benchmark Mineral Intelligence's Simon Moores And Caspar Rawles Talk With Matt Bohlsen From Trend Investing | Seeking Alpha
Benchmark Mineral Intelligence's Simon Moores And Caspar Rawles Talk With Matt Bohlsen From Trend Investing | Seeking Alpha
jhm
Well-Known Member
The cobalt issue is quite interesting. It is a huge challenge for lazy OEMs that want to go with high cobalt cells that do not need much thermal regulation, but a potential advantage to Tesla.
So I'll take Petersen's latest as a starting point. How Battery Chemistry Assumptions Distort Nickel And Cobalt Demand Forecasts | Seeking Alpha. I disagree with most of his conclusions because they don't logically follow his analysis. But there is useful content in this analysis, especially what is borrowed from UBS.
I'll assume these presented fact are correct:
I suspect that Petersen's language "where cobalt is x% of cathode powder weight" is a bit misleading. It is multiplied by 0.61 for some reason. Is this the fraction of a typical cell that is cathode powder? This is how I am interpreting it. But if someone can clarify this, I would appreciate it.
One key thing Petersen is missing in his analysis is the energy density of these different cells. On a cathode powder weight basis clearly the NMC-111 needs more than 3 times as much cobalt as an NMC-811 would for a pound of cells.
But the ratio of nickel to cobalt also impact how much energy a pound of cells can store. Elsewhere I found that a typical NMC is about 200Wh/kg, while typical NCA is around 250Wh/kg. This is a 25% increase. I would not be surprised if Tesla's NCA was 30% to 50% more energy dense than a NMC-111.
Thus, the high cobalt NMC cells may need about 4 times the cobalt per kWh as low cobalt NMC-811 or Tesla NCA.
As best I can figure (and please help me if you can do better), Tesla needs about 220g or 0.5 lb cobalt per kWh. Cobalt is currently trading just above $36/lb. Thus, it Tesla were sourcing from the spot market, cobalt would contribute $18 cost per kWh. I think this is tolerable sensitivity for Tesla. Cobalt could double again to $72/lb, and Tesla would take the incremental $18/kWh in stride.
But what of a competitors who need 4 times as much cobalt per kWh. Already a $72/kWh cobalt component would be hard to swallow, but if cobalt doubled again, it could take certain models off the market. This is really bad news for OEMs that are not leaning into high density, low cobalt battery technology.
But for Tesla and any other OEMs who are seriously pursuing battery tech, the "cobalt cliff" could be a huge opportunity to lock in market share. Cobalt won't always be expensive. They miners simply have to explore and develop new cobalt resources. That will come in time. But Petersen is wildly off the mark to conclude that the cobalt cliff will send Tesla into bankruptcy. The impact is merely to keep marginal EV producers out of the market for a few years while serious contenders like Tesla solidify their lead. The UBS analysis probably gets this better than Petersen's attempt to rework it. High cobalt prices are exactly what will drive EV makers to high density, low cobalt cells. That is why UBS modelled it so. Not everyone goes off the cliff, just the ones that make inefficient use of cobalt.
So I'll take Petersen's latest as a starting point. How Battery Chemistry Assumptions Distort Nickel And Cobalt Demand Forecasts | Seeking Alpha. I disagree with most of his conclusions because they don't logically follow his analysis. But there is useful content in this analysis, especially what is borrowed from UBS.
I'll assume these presented fact are correct:
His aim is to dismiss NMC-811 and Tesla NCA which is believed to use only 10% cobalt for cathode. Hence, both NMC-811 and Tesla NCA are 6.1% of weight.
I suspect that Petersen's language "where cobalt is x% of cathode powder weight" is a bit misleading. It is multiplied by 0.61 for some reason. Is this the fraction of a typical cell that is cathode powder? This is how I am interpreting it. But if someone can clarify this, I would appreciate it.
One key thing Petersen is missing in his analysis is the energy density of these different cells. On a cathode powder weight basis clearly the NMC-111 needs more than 3 times as much cobalt as an NMC-811 would for a pound of cells.
But the ratio of nickel to cobalt also impact how much energy a pound of cells can store. Elsewhere I found that a typical NMC is about 200Wh/kg, while typical NCA is around 250Wh/kg. This is a 25% increase. I would not be surprised if Tesla's NCA was 30% to 50% more energy dense than a NMC-111.
Thus, the high cobalt NMC cells may need about 4 times the cobalt per kWh as low cobalt NMC-811 or Tesla NCA.
As best I can figure (and please help me if you can do better), Tesla needs about 220g or 0.5 lb cobalt per kWh. Cobalt is currently trading just above $36/lb. Thus, it Tesla were sourcing from the spot market, cobalt would contribute $18 cost per kWh. I think this is tolerable sensitivity for Tesla. Cobalt could double again to $72/lb, and Tesla would take the incremental $18/kWh in stride.
But what of a competitors who need 4 times as much cobalt per kWh. Already a $72/kWh cobalt component would be hard to swallow, but if cobalt doubled again, it could take certain models off the market. This is really bad news for OEMs that are not leaning into high density, low cobalt battery technology.
But for Tesla and any other OEMs who are seriously pursuing battery tech, the "cobalt cliff" could be a huge opportunity to lock in market share. Cobalt won't always be expensive. They miners simply have to explore and develop new cobalt resources. That will come in time. But Petersen is wildly off the mark to conclude that the cobalt cliff will send Tesla into bankruptcy. The impact is merely to keep marginal EV producers out of the market for a few years while serious contenders like Tesla solidify their lead. The UBS analysis probably gets this better than Petersen's attempt to rework it. High cobalt prices are exactly what will drive EV makers to high density, low cobalt cells. That is why UBS modelled it so. Not everyone goes off the cliff, just the ones that make inefficient use of cobalt.
"It is a huge challenge for lazy OEMs that want to go with high cobalt cells that do not need much thermal regulation, but a potential advantage to Tesla."
not quite, high cobalt is easier to manufacture cathode, but nickel based chemistry is the only chemistry with greater thermal regulation requirements than cobalt.
Nickel based cathode powders require more skill and precision to manufacture compared to NMCs, LiFePO4, Mn2O4, CoO2. thats why they were the last of the cathode powders for the Chinese to manufacture, even the much younger NMC scaled sooner than NCA in China. (As did LiFePO4)
not quite, high cobalt is easier to manufacture cathode, but nickel based chemistry is the only chemistry with greater thermal regulation requirements than cobalt.
Nickel based cathode powders require more skill and precision to manufacture compared to NMCs, LiFePO4, Mn2O4, CoO2. thats why they were the last of the cathode powders for the Chinese to manufacture, even the much younger NMC scaled sooner than NCA in China. (As did LiFePO4)
jhm
Well-Known Member
I agree. Easy to work with, but could prove too expensive as the price of cobalt climbs. Cost was the challenge I had in mind.
jhm
Well-Known Member
Lithium Miners' Pain Is Tesla's Gain As Prices Seen Plunging This Much | Stock News & Stock Market Analysis - IBD
It's curious that EV detractors have been turning their attention away from lithium and placing it on cobalt. Cobalt is now the mineral that is supposed to disrupt the drive to EVs.
Of course, Tesla locking in an agreement with SQM may have something to do with this. The FUDhose wants to fuss about a coming lithium glut by 2025 and mock Tesla for locking in supply while lithium hype is at peak bubble. What folly! Tesla locks in expensive lithium while cobalt will be the real constraint, says the FUDhose.
Of course, Tesla is in a much better position to know its future mineral needs than any outsider, including TMC fanboys. Additionally, many forecasters out there are inclined to underestimate EV growth. UBS has what appears to be an ambitious 15M EVs in 2025, while my own modeling suggests more than twice that. So it is easy to imagine a coming lithium glut, if in your core you can only believe that maybe 4M EVs will be sold in 2025, while Tesla is charging into a 32M EV market.
So let's assume that Tesla knows how many GWh of batteries they want to bring to market in 2025, they have a strategic path to get there, and they know what minerals they need to secure now not to get derailed along the way. Basically we assume Tesla knows it's stuff. From that interpretive lens, what can we make of Tesla securing lithium while competitors and other tech scramble for cobalt? 1) Tesla has already locked in the cobalt it needs while others are trying to catch up. 2) Tesla needs more lithium than they were previously able to secure. This second point invites some speculation. Specifically, does Tesla have new battery chemistry that needs more lithium? Or is this just one leg of securing all the minerals needed for the next Gigafactory? If Tesla specifically needs a higher ratio of lithium, that could be a really good thing.
It's curious that EV detractors have been turning their attention away from lithium and placing it on cobalt. Cobalt is now the mineral that is supposed to disrupt the drive to EVs.
Of course, Tesla locking in an agreement with SQM may have something to do with this. The FUDhose wants to fuss about a coming lithium glut by 2025 and mock Tesla for locking in supply while lithium hype is at peak bubble. What folly! Tesla locks in expensive lithium while cobalt will be the real constraint, says the FUDhose.
Of course, Tesla is in a much better position to know its future mineral needs than any outsider, including TMC fanboys. Additionally, many forecasters out there are inclined to underestimate EV growth. UBS has what appears to be an ambitious 15M EVs in 2025, while my own modeling suggests more than twice that. So it is easy to imagine a coming lithium glut, if in your core you can only believe that maybe 4M EVs will be sold in 2025, while Tesla is charging into a 32M EV market.
So let's assume that Tesla knows how many GWh of batteries they want to bring to market in 2025, they have a strategic path to get there, and they know what minerals they need to secure now not to get derailed along the way. Basically we assume Tesla knows it's stuff. From that interpretive lens, what can we make of Tesla securing lithium while competitors and other tech scramble for cobalt? 1) Tesla has already locked in the cobalt it needs while others are trying to catch up. 2) Tesla needs more lithium than they were previously able to secure. This second point invites some speculation. Specifically, does Tesla have new battery chemistry that needs more lithium? Or is this just one leg of securing all the minerals needed for the next Gigafactory? If Tesla specifically needs a higher ratio of lithium, that could be a really good thing.
I follow lithium supply vs demand, Li producers and hope to be producers, plus cathode/anode material processing advances.
The lithium glut BS was triggered by two Li majors resolving royalty differences with gov't of Chile and winning approval to quadruple current production from Chile. However that size increase will take a number of years to realize, during which time demand rising faster than supply will keep Li prices at current high levels. Chilean production increasing over next five years is a good thing, as it will help support the much faster global EV production ramping many non Wall St analysts believe is coming.
Severe limitations on cobalt supply would be worrisome, except cathode designs have been developed that need no cobalt at all.
Normally that type of change would take five or more years to displace designs dependent on cobalt. But the high cost is going to make that happen much more quickly IMO.
Cobalt price will stay high (or higher) next year or three, leading a number of startups to invest in growing supply, not realizing they are trying to mount and ride a horse that's already got a slow developing but fatal disease.
jhm
Well-Known Member
Thanks! Do you have any thoughts about how long it would take Tesla to develop cobalt free cathodes? What are some of the tradeoffs going that route?
I'm not aware of any which have enough energy density to allow long range EV's such as Tesla produces. Do you have any references for tested proven batteries?
@jhm, you've asked the best question that I have no real information to answer! Tesla is naturally keeping mum on what battery improvements are up their sleeves. For what its worth, my WAG is that Tesla has cathode chemistry/design improvements sufficient to provide Semi with the range they have promised, so far along in the pipeline they are certain it is not going to fail during the rest of the productionalization path. That may include some further reduction in the amount of cobalt used, but I don't think that will be a no cobalt cathode. It would make sense that Tesla battery research group(s) have several good candidates for next performance breakthrough in the pipeline at all times, each at a different stage. Some won't make it but some will pay off. Besides the various cathode improvements moving along, there are also important new anode developments in moving from graphite to silicon with polyrotaxane. I think (and hope) Tesla has positioned itself to introduce batteries with 30% or more increased energy density, not once but every couple of years. If that's true then they won't just stay ahead of the pack, they'll continue pulling ahead and thereby lead in lowering cost, increasing range and shortening charging times.
For the no cobalt cathode innovation and a great over view of cathode chemistries give this infographic from Nano One a read.
"High Voltage Spinel cathode, also known as LMNO. 75% Mn, 25% Ni, no cobalt"
Cathodes Infographic
(Disclosure: I am long on Nano One)
If you want high energy density in a li-ion battery, you're pretty much stuck with cobalt in the cathode today. There is a lot of R&D into all sorts of alternatives. The long range answer will be solid state batteries which could be lithium anode or possibly something else like calcium. Those developments are ongoing in labs all over the world today. Tesla doesn't talk about it, but I suspect they are doing their own solid state research.
Solid state is the holy grail, it gets past a number of drawbacks with all li-ion chemistries. They will be inherently safer, almost certainly more energy dense, and both faster and cheaper to make. It's still going to be a while until those make it to production though. Any new battery chemistry requires a ton of testing before it's ready for production. There are many different trade-offs that need to be evaluated.
Solid state is the holy grail, it gets past a number of drawbacks with all li-ion chemistries. They will be inherently safer, almost certainly more energy dense, and both faster and cheaper to make. It's still going to be a while until those make it to production though. Any new battery chemistry requires a ton of testing before it's ready for production. There are many different trade-offs that need to be evaluated.
jhm
Well-Known Member
Exciting Developments In NMC 811 Lithium Battery Technology | CleanTechnica
Here's some good info on the race to NMC 811.
Here's some good info on the race to NMC 811.
mblakele
FSD Beta (99)
From this week's Economist: Race to the bottom: Mining the ocean floor is about to go mainstream
Despite the headline, this is still some years away. Selected quotes:
Despite the headline, this is still some years away. Selected quotes:
James Hein of the United States Geological Survey and colleagues estimated in a paper in 2012 that the CCZ
holds more nickel, cobalt and manganese than all known terrestrial deposits of those metals put together. The World Bank expects the battery industry’s demand for these, and other, minerals to increase if the transition to clean energy speeds up enough to keep global temperatures below the limits set in the Paris agreement on climate.
[...]
The idea of mining the CCZ is not new. The Pacific’s mineral nodules were discovered by HMS Challenger, a British research vessel that first dredged the abyssal depths in the 1870s. Lockheed Martin, an American defence contractor, tried prospecting the CCZ in the 1960s. Its caterpillar tracks were not reliable enough to operate at such depth, so the company imagined two Archimedes screws to drag its vehicle through the mud. (Lockheed’s deep-sea mining expertise was later used in a CIA operation to recover a Soviet submarine which sank in the CCZ in 1968.) At the time there was hyped speculation that deep-sea mining would develop rapidly by the 1980s. A lack of demand (and thus investment), technological capacity and appropriate regulation kept that from happening. The UN Convention on the Law of the Sea (UNCLOS), which set up the ISA, was not signed until 1982. (America has still not ratified it, and thus cannot apply to the ISA for sea-floor-mining permits.)
[...]
If P2 succeeds, it will be time for P3, which will be the size of a small house. It will have two drone escorts, one to move ahead of it and one behind. They will monitor how much silt it disturbs, and will shut down the operation if necessary. Thus, P3 will be able to steer along the seabed autonomously. DEME will then build a customised surface vessel, ending up in about 2025 with a new kind of mining operation, at a total cost of $600 million.
holds more nickel, cobalt and manganese than all known terrestrial deposits of those metals put together. The World Bank expects the battery industry’s demand for these, and other, minerals to increase if the transition to clean energy speeds up enough to keep global temperatures below the limits set in the Paris agreement on climate.
[...]
The idea of mining the CCZ is not new. The Pacific’s mineral nodules were discovered by HMS Challenger, a British research vessel that first dredged the abyssal depths in the 1870s. Lockheed Martin, an American defence contractor, tried prospecting the CCZ in the 1960s. Its caterpillar tracks were not reliable enough to operate at such depth, so the company imagined two Archimedes screws to drag its vehicle through the mud. (Lockheed’s deep-sea mining expertise was later used in a CIA operation to recover a Soviet submarine which sank in the CCZ in 1968.) At the time there was hyped speculation that deep-sea mining would develop rapidly by the 1980s. A lack of demand (and thus investment), technological capacity and appropriate regulation kept that from happening. The UN Convention on the Law of the Sea (UNCLOS), which set up the ISA, was not signed until 1982. (America has still not ratified it, and thus cannot apply to the ISA for sea-floor-mining permits.)
[...]
If P2 succeeds, it will be time for P3, which will be the size of a small house. It will have two drone escorts, one to move ahead of it and one behind. They will monitor how much silt it disturbs, and will shut down the operation if necessary. Thus, P3 will be able to steer along the seabed autonomously. DEME will then build a customised surface vessel, ending up in about 2025 with a new kind of mining operation, at a total cost of $600 million.
Similar threads
- Article
