Sunday, 10 August 2014

Elon Musk With Tesla Gigafactory Starts The Race To Secure Supply Of Lithium Batteries And Lithium.


  I would like to share with you the very interesting summary from  Seeking Apha on this subject. It confirms my personal observations of the investment and M&A trends in our Lithium industry today. I will share with you few quotes and links which will help you to understand International Lithium strategy and, what is very important, how our strategic partner Ganfeng Lithium sees this megatrends from the ground of the world's biggest auto market in the world in China.

International Lithium Corp. Completes Payments on Mariana Lithium Brine Project, Argentina.

"Mr. Kirill Klip, President, International Lithium Corp. comments, "The recent acquisition of the Taca Taca copper deposit by First Quantum Minerals confirms our strategic view that mining investment in Argentina will increase. Both Taca Taca and Mariana are located in Salta, Argentina, a mining friendly province and heart of the South American Lithium Triangle. Both Taca Taca and Mariana have rail and road access, in addition infrastructure development work at nearby Taca Taca will also benefit the Mariana project.
Now that we have secured 100% of the mineral rights to the project for our J/V with Ganfeng Lithium, an accelerated program to develop a pilot plant can commence. Subsequent feasibility studies will allow us to use Ganfeng Lithium's technological expertise and research facilities that we anticipate will reduce costs and improve efficiencies. The recently signed trade agreement between China and Argentina provides state-level support for our joint venture. Together we strive to become a primary source of lithium to meet the increasing demand of our strategic partner Ganfeng Lithium."

Mr. Wang Xiaoshen, Vice Chairman/VP, Ganfeng Lithium Corp. notes," The Mariana project has a high Potasium-Lithium ratio that gives the project a potentially high credit from the Potasium. This will make the cost of the Lithium resource very competitive. We believe this project will have a bright future considering the fast growing lithium demand for electric vehicles and plug-in hybrid electric vehicles ."

"Mr. Kirill Klip, President, International Lithium Corp. comments, "We are excited to spearhead this international collaboration and program that sets a precedent for sourcing metals that are imperative to the advancement of mobile devices, electric vehicles and alternative energy. The demand for Lithium is continually on the rise and there are shortage concerns which could impede on the growth of the green technology sector worldwide. The Irish government has taken this risk very seriously and pledged to facilitate the advancement of lithium production as part of an initiative to improve strategic metal supply chains. Together with Ganfeng Lithium, ILC has the opportunity to be part of this development and we are optimistic that we have a new potential source for the lithium battery supply chain".

Mr. Wang Xiaoshen, Vice Chairman/ VP, Ganfeng Lithium Corp. notes, "Recent news that corporations such as Tesla and Panasonic are making significant commitments to build gigafactory battery plants will significantly impact the demand for Lithium. Similarly the Chinese market will become increasingly more important to companies like Tesla in the near future. These two reasons make BLL an ideal prospect for the lithium industry."

International Lithium Corp. A Potential Source For Green Technology Minerals.

Elon Musk To Occupy Mars, But First He Opens The Doors For Tesla To The World's Biggest Auto market.


  Elon Musk moves very fast and now the doors to the world's biggest auto market are wild open. Superchargers will make Tesla Model S capable to compete with ICE cars and Chinese government will do the rest. Air pollution is the nation wide issue and now government in China has announced the war on pollution. Electric cars are the very big part of this battle plan. Now one thousand fast chargers are being built in Beijing along and all new residential development must be wired for the electric cars. The new mandate is in place calling for 30% of all state owned cars to be electric. 
  China has escalated electric cars to the status of strategic industry and is building the supply chain of Strategic Commodities for the electric cars, mobile devices and alternative energy. LG Chem has announced its own Megafactory in China to produce 100,000 lithium batteries for electric cars per year. 
  International Lithium becomes the part of the vertically integrated lithium business in the huge market in China with its strategic partner Ganfeng Lithium.


Lithium Race: China Requires 30% of State Cars Use Alternative Energy.


   As we have discussed here numerous times, China moves electric cars with its state-level plan into the strategic industry status. While West is still looking what is wrong with Tesla Motors and Tesla Model S Chinese companies are searching the globe and buying the best deposits of LithiumCopper and REE. These will be the materials driving the next industrial rEvolution - electrification of our transportation systems.  High-speed railway network will solve the problem of mass transit in the future when Oil will be gone. China is building this network by thousands of miles per year and it is going to reach .... Singapore. Electric cars will solve the problem of mobility in the highly populated megalopolises.
  Elon Musk goes Open Source with electric cars now and Tesla Motors patents are available for all. It is not just charity, but rather carefully calculated move. And it is not the attempt to diminish our leader-in-chief altruistic incentives behind this move. Reality is that Elon Musk targets the Chinese market now with Tesla Model S and what is more important - with the new mass market model of electric car from Tesla Motors. It would be re-engineered in any case in China, but now if you can make that car cheap and in mass numbers, your strong partners in Asia will help Tesla Motors to fight counterfeit and people will not by the sub par quality.
  Can I put the name Foxconn again here?

Seeking Alpha:

  • The Tesla gigafactory is underway and will be ready by 2017.
  • With the gigafactory, Tesla will have access to batteries at a cost close to $100 per kWh (at least three times cheaper than anyone else).
  • If big auto does not start work on its own gigafactories, they will have gifted the EV market to Tesla.
Tesla (NASDAQ:TSLA) has broken ground on its gigafactory site in Nevada and a deal with Panasonic has been reached.
Thanks to Tesla's previous capital raising efforts and an immediate commitment of roughly $300-500 million from Panasonic, it is clear that close to $2 billion is available for the gigafactory construction over the next year.
By this time next year, Tesla will be producing close to 100,000 vehicles per year (Model S+X) and obtaining further financing to finish the gigafactory will not be difficult (if required at all).
In the most recent Tesla conference call, Elon Musk suggested that "in light of the technical and logistical advances the factory would bring, he would be 'disappointed' if it took Tesla 10 years to make a $100-per-kWh pack, suggesting it could happen before the end of the decade."
"It's heading to a place of no contest with gasoline," Musk said. "In the absence of the Gigafactory, this progress would be much slower."
Since the gigafactory is not expected to reach full production before 2020, one can only conclude from Mr.Musk's words that he expects the gigafactory to be able to get battery costs down to $100 per kWh or below.
The best estimates place Tesla's current per kWh battery cost somewhere between $250-$300, while the rest of the auto industry is believed to be paying well over $400 per kWh for their EV batteries.
If the gigafactory is capable of reducing battery costs to $100 per kWh or below, Tesla will hold all the cards when it comes to the Electric Vehicle market.
One must remember that the gigafactory will only produce enough batteries for 500,000 vehicles and that to do this it must produce more lithium ion batteries under one roof than the entire world produced in 2013.
As I have written in my previous articles, nobody in the auto industry will be close to being able to produce as many Electric Vehicles as Tesla unless they embark on building their own battery gigafactories in the very near future.
For example, Nissan (by far the leader in terms of pure EV production within the mainstream auto business) has only enough battery capacity to produce 200,000 Leaf's per year -- and that's when its battery plant is eventually running at full production.
Of course we must remember that a Leaf has less than half the range of the base 60 kWh Tesla Model S, which means that currently, Nissan only really has the ability to produce less than 100,000 long range EV's per year. That's assuming they plan on challenging Tesla's 200+ mile range, $35k Model III (expected in 2017) and halting production of the current Leaf.
The rest of big auto has virtually no battery supply on which to draw. GM, with the Chevy Volt, is in a distant second place behind Nissan with its battery plant able to produce enough for just 60,000 Volt's per year at max capacity (or maybe less than 15,000 long range EV's).
These battery capacity figures are taken from my own research which can be found here (with original sources). Seeking Alpha."