Thursday, 17 September 2015

Electric Cars: Jeffrey Brown - To Understand The Oil Story, You Need To Understand Exports.



  This is the last piece which I promised to present for you own conclusions about the future of the energy markets, you know my take already:





The Future Of Oil: Electric Cars Have Reached The Point Of No Return With Tesla Gigafactory.



  The short answer: All cars will be electric and the rest is history. If you like some details you are welcome! Nobody knows the future. We can only speculate and try to extrapolate the existing trends into the future. I would like to remind you that all expressed opinions on this blog are my personal ones and do not reflect the official position of any companies I am involved with. 
  Actually, I do not have anything against oil and, particularly, those hardworking women and men who were powering our technological progress for a little bit more than one hundred years. I just hate to pay so much for my petrol - guilty, I like Big and Powerful cars.  Particularly I hate that this money is going to pay for Wars and provide dirty politicians which are bathing in oil denying the climate change. And I hate that my own money will pay for the use of One Hundred Years Old Technology based on controlled explosions of Dinosaurs Poop with less than 35% efficiency: heating everything around it and chocking us all with deadly air pollution. But not for long, Elon Musk has changed everything - I can get my Big and Powerful car from Tesla now.
  I am just thinking about The Next Fifty Years here on this blog. We will pay to Oil our due respect at the appropriate time, but today I would like to share with you a few observations from my latest research. Please, stay tuned - I will publish the sources for your own conclusions later.
  Electric Cars have reached The Point Of No Return. Whatever happens next to Oil is not relevant any more. With more expensive oil we can have our iPod Moment chart of EV adoption rate just going even steeper. With lower price for oil we can just listen about the coming doom for electric cars for another few months and those journalists will have just a little bit more time to find another jobs. FED is hiring by the way - they will need a lot of spin to keep this Market Ball rolling. To paraphrase: the stone age has gone not due to the lack of stones … Electric Cars are just better, they are more powerful and they are getting cheaper now. 
  This point of no return was reached not only because of the exponential take off, finally, in sales of EVs. It was made by Elon Musk alone. Tesla Gigafactory, when Musk has committed billions of dollars with the total lack of any Wall Street accepted visibility, has changed everything. Our Holy Grail for Electric Cars is approaching very fast now. Mass market for EVs will be ignited by the dramatically reduced cost for Lithium Batteries - $100 per kWh will come with the mass production of batteries. Elon Musk has started the Lithium Race. I am writing a lot about Lithium Batteries Megafactories coming now from Foxconn, BYD, LG Chem, Boston Power, Samsung and A123.You can find all these information on my blog, just use the search engine.
  My personal formula for the mass market for electric cars is 20/200. When you pay $20k for 200 miles range electric cars similar to BMW 2. It will literally kill ICE (Internal Combustion Engine) cars. The average price paid for the new car in U.S. was $23k last year. Will you pay for any ICE cars - if you can have more powerful electric one and run it so much cheaper or even almost free of charge like in the case with Tesla with Tesla Superchargers? We will not have even to consider any more any air pollution which is killing us all or call to the higher consciousness -  economics will do the job. Disruption will happen very fast. People will buy what is better and cheaper - electric cars. 
  Actually, it is all already happening very fast. Apple is still hiding with its Electric iCar on the military base in California, but Tesla Model 3 is coming next March to Geneva Auto Show with 200 miles range and $35k price tag. GM is catching up on Tesla with GM Bolt promised to hit the production lines in the Fall of 2016 and will go for 200 miles on a charge with close to $30k price tag. Nissan Leaf is flirting with 500 km range on the testing tracks, while increasing its battery to 30 kWh for its upcoming 2016 model.
  Breakthrough can come from Asia, as usual. This one is my favourite tune, as you already know. Foxconn is building a mysterious $15k Electric Car and investing almost 1 billion dollars in its production facilities for EVs in China. BYD with Warren Buffett on board is investing as well almost 1 billion dollars in its EV trucks production plants. And both companies are building their own Lithium Batteries Megafactories, as I have mentioned above.
   Here where my beloved Lithium twist to the story is coming on. I will not retype all my blog and just throw a few numbers to stimulate your creative thinking. Tesla, Lithium Bottlenecks and Royalty. Stay tuned - this one is coming.
   All the Lithium Demand by now is … not from lithium batteries. Lithium demand for all batteries was under 20% in 2013. It were Mobile Devices and Power Tools. Electric Cars were just not there yet. But now they are coming like a storm to take over the market. And Energy Storage is starting to print its own exponential "hockey stick" chartthanks to Tesla Energy as well. 
  Tesla Gigafactory alone will produce the same amount of lithium batteries capacity as the whole world in 2013! It will consume close to 17% of existing lithium supply. I have calculated that only Tesla Gigafactory, LG Chem, BYD, Boston Power and Foxconn will consume 42% of the existing Lithium Supply! Add here Samsung, A123 and … 17 new ventures in China rushing to accommodate the falling from the skies stimulus money. A lot will be wasted, but some will come on-line. This is The Next Fifty Years Plan in action.
  China has announced "The War On Pollution". They have made Electric Cars The Strategic Industry. While we are here in the West were fed up by GMO in order to increase our acceptance of Shale Oil and its consequences like dramatically increased because of water pollution cancer rates and flaming water from the tabs; China has spent billions to secure the best Lithium Deposits, has built 75% of the world Lithium Hydroxide production facilities and leapfrog the ICE age straight into the post carbon EVs world powered by Solar.
  Nothing is perfect anywhere and not all is lost. We have Elon Musk, but we need more of them! Who will take the challenge and will embrace the vision for The Next Fifty Years to come and join me and International Lithium Team to built the secure supply not only for China, but for the West as well? I am waiting for that call and some people are coming already into International Lithium now. 
  The catalyst and tipping point for EVs' mass market and launch for Energy Storage can happen very fast now. I will publish later the very interesting observation from the lithium battery world: LG Chem and Samsung are in the very fierce competition now in Asia. BYD is rising very fast and actually already has very impressive Megafactories in place and building now more in China and Brasil. There is already lithium battery overcapacity building on, they are all waiting for EVs to take off and Energy Storage will be next driven by exponential growth in Solar installations. Asian players are going for the market share. Dramatic drop in cost for lithium batteries can happen even sooner, I still leave my own estimations conservatively at $100 per kWh by 2018. Elon Musk has started this lithium Race to the bottom … of lithium battery cost. Lithium batteries will become the commodity like it happen with Solar panels. He will benefit once he takes over the mass market with Tesla Model 3. 
  So everything is so bright with shining Solar and we are all feeling great with Lithium intoxication? It is the interesting part. Nobody knows about Lithium Story yet, if you believe it! Simon Moores has just started his first World Battery Supply Tour by Benchmark Mineral Intelligence. You can follow it on twitter with #Benchmark2015 hash tag. I have attended last week the inaugural event in London - it was perfect location, great brilliant minds from the industry and I highly recommend to attend it in other cities. You can still catch it up in Toronto, Vancouver and meet with International Lithium Team, Singapore, Hong Kong and even in Australia. But it were only 90 people in London … in one of the financial capitals of the world. Some questions asked by the attending bankers just made me think that maybe I live it 24/7, but most are still just watching Bubble Vision. Do not get me wrong, I was too early just to make money here, but I do not like to be too late to make the difference. You are invited as well by the way. You know where to find me.
  Back to my tribute to Oil. There is no Cheap Oil Left Any More. Recent War Games will come and go and I will address it later in another post. For now I will present just a few facts to digest. Five Trillion were spent on oil exploration world-wide from 2005 when conventional oil hit its peak. The crude oil just stay flat all that time, only condensates are rising. The new reality of Oil Export Capacity will add to the inevitably diminishing Returns On Energy Invested to the process of extracting oil now. Rising internal consumption in the oil producing countries is putting another strain on the oil supply. And all Shale Oil party can be over by 2020 by the way. And to understand it better you have just to listen to couple of podcasts I will publish later and see what Shell is doing in Alaska and Arctic now. Why on earth Shell is going to invest billions in the projects with such high risks which are working only with $80 oil? Are they committing the corporate suicide or just know the truth: The Cheap Oil Is Gone.
  Hedge funds for sure will play oil market both ways with Iran card, but more and more insiders are taking that, actually, Iran was selling its oil all the way to the banks or Gold Vaults even during sanctions. What is left is a toxic low quality mix of oil and condensates, which is very difficult to sell, but we will see this roller-coaster very soon.
  After Electric Cars, Lithium Batteries for homes like Solar Systems applications and Utility Scale Energy Storage Systems next drive for Lithium will come with Robots, but this we will discuss later. Next Fifty Years Will Be Powered by Lithium Technology.
  Join the Disruption or be Disrupted. Dump The Pump - It Is Time To Go Electric.


International Lithium: President's Message And Private Placement.

  


  Today I have the opportunity to share with you, finally, the very good news which all our International Lithium Team was working very hard to deliver. It is one of many more to come and a very small token of appreciation of the value that we all have managed to build despite of the total massacre in the junior mining.
   We have found new very strong partners who is sharing our vision of the future. This future is already here, it is just unfortunate that not everybody has it noticed. All cars will be electric. Lithium is the magic metal at the very heart of this rEVolution.
  International Lithium is plugged into this Next Big Thing with our Team, Projects and Strategic Partners. Now the tide is coming: we have the beautiful boat, very strong Crew seasoned by the storms and today we are putting up our sails. 
  We are making our financing at the more than double premium to our market price just one month ago: at 8 cents vs 2.5 cents low in August. Any journey is full of uncertainties and risks; and it is always safer to stay on shore. Please read carefully all our legal disclaimers.
  Nothing is for certain apart from death and taxes in this world, but we know how to navigate once we are at sea. And today I am pleased to share with you our destination:

  

International Lithium Corp. - A Green-Energy Metals Company.


  I have written extensively about International Lithium and our strategic partner Ganfeng Lithium. Our J/Vs in Argentina and Ireland are financed by this giant from China and we have very important access to the technology. Basically we are building the secure supply chain for Ganfeng Lithium using their expertise in raw materials needed for production of battery grade lithium from the very beginning. Our brine bulk sample from Mariana is being tested at Ganfeng state-of-the-art R&D facilities in China and in Ireland we have identified 22 exploration targets. Now, according to our latest NR, we are waiting for the approval of the budgets for both projects to be rapidly advanced after very encouraging results were received from the last exploration stage this year.
   Today I would like to show you another side of International Lithium. We have the very strong technical team headed by our CEO Gary Schellenberg. Anthony Kovac - our COO and John Harrop - our VP of Exploration are among very few top level exploration managers and geologists in lithium sector. This Team depth has allowed International lithium to attract Ganfeng and strike two major J/V deals in all our industry. These days we are getting the first fruits of this very hard work. Coming volume shows that market is waking up and we are receiving at least some recognition of the value we have been building all these years. 
  I am talking a lot about the security of lithium supply and Tesla Lithium Hydroxide Supply Deal is another proof and was noticed by market overnight. Now venture capital is knocking on all doors chasing the upstream supply chain for electric cars and Energy rEVolution. 
  We have another great project at International Lithium: Mavis Lake Lithium And Tantalum Project which is located in mining friendly Canada in the area with excellent infrastructure and very encouraging initial exploration results with high grade Lithium and Tantalum. It will be our next strategic advance for the company. With J/Vs moving forward we are looking for the strong Strategic Partner to develop this project for the potential supply of this strategic commodity for the ongoing Next Industrial rEVolution. West will wake up one day to the fact that China has managed to control now not only over 90% of REE production, but 75% of Battery Grade Lithium Hydroxide as well. 
  Security of Supply means exactly this - Security. When the price is taking the second consideration and availability of critical materials is taking the central stage. My personal mission is to make this Security happen for the Western world for real as well, even if this part of the World still lives by HFT rules and Q by Q performance reflecting the coming bonuses. Our Asian friends are beating us all here with the state-level plans looking for The Next Fifty Years and building new strategic industries like Electric Cars in China.
  We have Elon Musk, we need more like him, but it is a very good start. Our strategic partner for Mavis Lake is waiting somewhere in between of latest Q performance reviews. If you know the one - you know whom to call. Now I do not have really to explain any more What Is Lithium For - Elon Musk has made the great job and every single Tesla Model S is the best moving ad of the things to come. All cars will be electric and it will be very soon. And by the way any new hard rock mine for Lithium will take 5-7 years to build Lithium brine operations will take 4-5 years at best. 
  Why International Lithium? You can check presentation above. Read more.