The Resource Angle

[Cosmacelf]

I think it’s interesting that Tesla ended up making a deal with PLL instead of ALB. PLL still has to build a processing plant. All they have is mineral rights now. Meanwhile ALB is right next door with presumably a fully functioning processing plant. So, why did PLL get the contract? Probably price, right? Also maybe ALB didn’t want to sell concentrate but only wanted to sell hydroxide.

However you slice it, this looks like Tesla will end up doing more business with the juniors than the majors, if for no other reason than the juniors absolutely need a partner like Tesla (for validation so they can raise money) and thus will be willing to be flexible and/or cheaper.

 

[mikevbf]

Juniors also have notoriously high loan rates. Tesla at over at >400B market cap gets considerably lower rates so can lend a hand this way with the right capitally structured agreement.

 

[bkp_duke]

I think it’s interesting that Tesla ended up making a deal with PLL instead of ALB. PLL still has to build a processing plant. All they have is mineral rights now. Meanwhile ALB is right next door with presumably a fully functioning processing plant. So, why did PLL get the contract? Probably price, right? Also maybe ALB didn’t want to sell concentrate but only wanted to sell hydroxide.

However you slice it, this looks like Tesla will end up doing more business with the juniors than the majors, if for no other reason than the juniors absolutely need a partner like Tesla (for validation so they can raise money) and thus will be willing to be flexible and/or cheaper.

From the video I thought PLL was only providing Tesla with Lithium spodumene, not refined Lithium Hydroxide. Do you need a plant for spodumene?

 

[Cosmacelf]

From the video I thought PLL was only providing Tesla with Lithium spodumene, not refined Lithium Hydroxide. Do you need a plant for spodumene?

The video said Peidmont was going to provide Lithium spodumene concentrate 6%. Their ore is about 1.5% lithium, so they need to concentrate it before shipping it to Tesla which will then turn it into Lithium Hydroxide. Makes sense as shipping raw ore doesn't make sense just from transport costs alone. And in general, I don't know anyone that would take raw ore since you have zero idea how much metal is in the ore. You absolutely under every circumstance want the mine to take that ore quality risk (and the mine takes the extra opportunity profit if their ore is better than thought).

 

[kbM3]

in second section of report:

Benchmark anticipates the Terafactory will be at 15GWh capacity for the full year of 2023 as it ramps to an expected 150GWh by 2029, three times the size of Tesla’s battery cell operations in Nevada (the original Gigafactory), Berlin, and Shanghai.

2029 should be expected to be much higher than 150gwh no?

and also, GF1 is at 35-40gwh by end 2020 so comparing the 2029 to what is currently output as of 2020 isnt much.

maybe just a typo? what am i missing?

Elon Musk revealed his ambition to have 1TWh or 1,000GWh of Tesla battery cell capacity by 2030, however. For context, the lithium ion battery market in 2020 is expected to be 210-220GWh yet in 2014 when Tesla announced the Gigafactory it was 60GWh in size.


then in the first sentence of the next paragraph they nullify the prior claim of 150gwh by 2030...


and then, i guess they mean;
in 2014 the expected completed output of 60gwh for gf1
but since upgraded to around 150gwh,
correct?

My guess would be 15 factories producing 200 GWh each on average by 2030, with some mixture of vehicles and energy storage products. So 150 GWh from Austin is not totally out of line.

Elon has always said he would like raw materials to go in one end of the factory and finished vehicles to come out of the other. I think he would like to co-locate vehicle production with batteries, so that would mean his illustration of a Terafactory, was just to get a size of scale, and not an actual plan.

 

[SPadival]

Meanwhile ALB is right next door with presumably a fully functioning processing plant. So, why did PLL get the contract? Probably price, right? Also maybe ALB didn’t want to sell concentrate but only wanted to sell hydroxide.

That’s probably why - ALB just wanted to sell hydroxide. PLL CEO said it was a special deal to Tesla. Probably, the timelines suited Tesla to have a processing plant built & the supply ready in 2022-2023.

Also, this article says ALB shut down their Nevada & NC mines in September.

Albemarle to shutter two lithium facilities in the US

 

[Cosmacelf]

That’s probably why - ALB just wanted to sell hydroxide. PLL CEO said it was a special deal to Tesla. Probably, the timelines suited Tesla to have a processing plant built & the supply ready in 2022-2023.

Also, this article says ALB shut down their Nevada & NC mines in September.

Albemarle to shutter two lithium facilities in the US

The article also says: "The company plans to restart the idled output in early 2021, chief financial officer Scott Tozier said on Thursday’s earnings conference call."

It's a reaction to China's EV demand drop due to coronavirus, and other miners bringing new supply online.

 

[bkp_duke]

Anyone know if / how much of a weight reduction there is by going from spodumene to LiOH? I just wondering if the cost to convert on site is greater than the transportation costs of spodumene.

 

[engine ear]

Spodumene ore concentrate is 6% spodumene. Spodumene is 3.73% lithium by weight. 6% * 3.73% = 0.224% lithium by weight.

Lithium hydroxide is 7.94% lithium by weight.

Therefore, it takes 7.94/0.224 = 35.5 tons of 6% spodumene ore concentrate to generate 1 ton of lithium hydroxide.

It is about 1200 miles from Charlotte, NC to Austin. Rail transport costs about $0.051 per ton per mile. So the additional shipping cost for ore is (35.5-1)tons * 1200 miles * $0.051 = $2100

For comparison, spot price for lithium hydroxide is around $10000 per ton.

 

[bkp_duke]

Spodumene ore concentrate is 6% spodumene. Spodumene is 3.73% lithium by weight. 6% * 3.73% = 0.224% lithium by weight.

Lithium hydroxide is 7.94% lithium by weight.

Therefore, it takes 7.94/0.224 = 35.5 tons of 6% spodumene ore concentrate to generate 1 ton of lithium hydroxide.

It is about 1200 miles from Charlotte, NC to Austin. Rail transport costs about $0.051 per ton per mile. So the additional shipping cost for ore is (35.5-1)tons * 1200 miles * $0.051 = $2100

For comparison, spot price for lithium hydroxide is around $10000 per ton.

Thanks for this. Exactly the cost and composition info needed. Now we know why Tesla wants to do the refinement themselves, and that it makes perfect business sense to do so, even assuming start up costs for processing to LiOH and storage of the raw spodumene.

 

[AudubonB]

I was sorting through my mineral collection today, and uncovered this nice specimen of high-grade spodumene I collected from the famous Ruggles Mine in Grafton, NH, a pegmatite quarry renowned for a staggering array of minerals. Thought some of you might enjoy the photo:

 

[mikevbf]

Spodumene ore concentrate is 6% spodumene. Spodumene is 3.73% lithium by weight. 6% * 3.73% = 0.224% lithium by weight.

Lithium hydroxide is 7.94% lithium by weight.

Therefore, it takes 7.94/0.224 = 35.5 tons of 6% spodumene ore concentrate to generate 1 ton of lithium hydroxide.

It is about 1200 miles from Charlotte, NC to Austin. Rail transport costs about $0.051 per ton per mile. So the additional shipping cost for ore is (35.5-1)tons * 1200 miles * $0.051 = $2100

For comparison, spot price for lithium hydroxide is around $10000 per ton.

and 6% spodgememe costs $1000-4000/ton so yeah cheaper to ship than pay for hydroxide, but it does increase the carbon footprint of creating the battery to add that greater weight transport.

 

[bkp_duke]

and 6% spodgememe costs $1000-4000/ton so yeah cheaper to ship than pay for hydroxide, but it does increase the carbon footprint of creating the battery to add that greater weight transport.

Still, I would be the carbon footprint is lower than it being shipped to/from China for processing. My understanding is that 80+% of spodumene is processed there, and much of the raw ore is shipped there for processing, then shipped back for use.

 

[mikevbf]

Still, I would be the carbon footprint is lower than it being shipped to/from China for processing. My understanding is that 80+% of spodumene is processed there, and much of the raw ore is shipped there for processing, then shipped back for use.

Here are some fun slides for your viewing pleasure (just to illustrate a bit how big this is)

 

[RobStark]

Tesla in talks with another potential nickel supplier from Canada

Nickel-producing Indonesia in early talks with Tesla on investment

 

[mikevbf]

Tesla in talks with another potential nickel supplier from Canada

Nickel-producing Indonesia in early talks with Tesla on investment

I am not going to invest in Vale because they also mine coal and that is deal breaker for me. The Indonesia article has almost nothing in it. Of course Tesla in talks with a lot of countries and mining companies. Nothing new here other than Tesla news sources starting to pay more attention to this stuff.

 

[mikevbf]

Simon Moores at benchmark mineral saying spodumene is 450/ton and used to be 900/ton. Howard Klein who was part of inking the deal between Piedmont and represents a lot more lithium mining companies Tesla for spodumene said it was 1k-4k/ton. I tend to believe Simon Moores. What do you guys think?

 

[bkp_duke]

Simon Moores at benchmark mineral saying spodumene is 450/ton and used to be 900/ton. Howard Klein who was part of inking the deal between Piedmont and represents a lot more lithium mining companies Tesla for spodumene said it was 1k-4k/ton. I tend to believe Simon Moores. What do you guys think?

IIRC from the peidmont video the price has been all over the map, with a recent uptick after it was at multi-year lows for the past 2 years or so due to Chinese oversupply.

Possibly both are right, but one just doesn't have the most up to date pricing?

 

[AudubonB]

Without reference to the grade of the spodumene concentrate, you cannot look at the prices to make any comparisons.

 

[Nocturnal]

Any idea why Giga metals popped 15% today? I'm back to about even and contemplating whether I should bail. No new Tesla news that I know of.