Bloomberg is taking the Lithium story to the financial mass media today. Quite a lot of information is definitely out of date already, like Symbol is already bankrupt for example. Tesla's Gigafactory is under the spotlight, but the real lithium story is already happening in China. Chinese companies are many years ahead of the game to secure supply of Lithium for the Energy rEVolution and Electric Cars. Elon Musk is pumping up projections for the Gigafactory 1 to produce 50GWh of lithium batteries by 2018 and 150 GWh by 2022 raising eyebrows in lithium industry. There were "only" 30GWh of lithium batteries made in 2014. And electric cars are still below 1% in sales worldwide and growing exponentially.
Where will all this lithium come from now? The story is getting even more dramatic ones we start adding to the very impressive numbers from Elon Musk about Tesla Gigafactory another dozen of Lithium Megafactories being constructed all over the globe now. This includes a few giant plants from the number one manufacturer of electric cars in the world - BYD with Warren Buffett stake. Now even Goldman Sachs' forecast of tripling lithium demand by 2025 can be a conservative one. International Lithium is plugged-in into the largest market for electric cars in China with Ganfeng Lithium and is building the secure lithium supply for North America now. You can find more about the coming Lithium Megafactories on the links below.
Elon Musk Launches Tesla Gigafactory: The Goal - Exit The Fossil Fuels Era As Soon As Possible.
"Elon Musk: "Gigafactory is the giant machine, we had to design it as a product - as a machine building other machines. We have just to build it and it has to be big, very big. Because the world is big. We could not find enough lithium batteries for our cars. Total lithium batteries output in 2014 was 30 GWh, Gigafactory will produce 50 GWh in 2018 for 500,000 electric cars and 150 GWh at full capacity for 1.5 million electric cars and Tesla Energy." Read more."
Please carefully read my legal disclaimer, nothing on this blog represents investment and/or tax advice. Please always consult your qualified financial adviser before making any investment decisions.
Goldman Sachs' Lithium Rush: Tesla Electric Trucks And Master Plan 2.0 Explained.
"Goldman Sachs is really into lithium now and pushing it across all social media platforms and to its clients. The real story with Lithium is happening in China already and Elon Musk tells everybody who would listen what is coming next. This video from Tesla Trip is summarizing very well the latest developments with Tesla. Below you can find a lot of information about the far-reaching consequences for the strategic commodities like Lithium which is at the very heart of this Energy rEVolution and Electric Cars. Read more."
Lithium 2.0 Launch: Security Of Supply - Galaxy Resources To Buy General Mining In Lithium Takeover.
"This chart of lithium price in China is keeping awake at night very many people now in our very small industry. Quite a lot of them have totally missed the launch of Lithium 2.0 and now the security of supply is the major geopolitical issue. Tesla is still relying on Panasonic to supply lithium cells and a lot of people are relying on the "Lithium Found in Nevada" under Tesla's Gigafactory floor.
Ganfeng Lithium: $4.5 billion giant from China is the strategic partner of International Lithium and now financing two of our J/V operations in Ireland and in Argentina. We are going where Lithium is and not just the hype around it. As we have discussed before, Lithium 2.0 is now for real as we have the real electric cars finally on the road and GM Bolt and Tesla Model 3 bring us mass market for electric cars. Cheap lithium batteries change everything. Exponential growth in EVs sales is following by deployment of Energy Storage now.
This Lithium M&A is pointing out another very important quality of Lithium 2.0 Launch: separation of dreams from the real people with the real projects, capital and technology to put them forward. There are only very limited number of quality lithium projects and even less capable teams with access to the capital and technology, like in the case of International Lithium and Ganfeng.
Galaxy is back from after the death experience and moves into the "New Lithium Top Six" taking over the "Old Lithium Big Three". Albemarle, SQM and FMC are being chased by very aggressive Ganfeng Lithium and Tianqi from China. Now we can add Galaxy to this very small space for investors to play around with the security of lithium supply for the future when all cars will be electric. That chart of lithium price shows what is happening when in the last 5 years out of 80k T of LCE expected new production annually only 18k T was put on-line and when Gigafactory and Megafactories are only coming on.
Now is time to check out the Gigafactories Game of Lithium Demand:
Before we were talking about:
1. Tesla Gigafactory 1 with 35 GWh and cost $5bn in Nevada, US.
2. LG Chem with 7 GWh and cost $0.5bn in China.
3. FOXCONN with 15 GWh and cost $0.81bn in China.
4. BYD with 20 GWh in China - Warren Buffett owns a stake in BYD, leader of EV sales in China.
5. Boston Power 10 GWh in China - Ganfeng Lithium ILC partner owned 10% of Boston Power.
Total: 87 GWh - a point of reference: total world lithium batteries production in 2013 was 35 GWh.
Now we have to add here:
- 17 lithium battery start-ups in China, totally unquantifiable number and I will leave it out as speculative.
6. BYD plants in Brazil and Argentina.
7. Panasonic in China.
8. LG Chem in Europe.
9. Mercedes in Europe.
10. A123 in Europe.
11. BMZ with 30 GWh planned capacity in Germany, Europe.
12. Volkswagen with $11.2 cost planned in Germany, Europe.
Total: more than 117 GWh of new lithium batteries capacity.
Now you can appreciate that my scenario of lithium demand doubling within next 5 years as the conservative one. Only Tesla with its plan of 1 million EVs produced by 2020 will consume at least 60 GWh of lithium batteries capacity assuming the average of 60 KWH batteries per EV. Knowing the Elon Musk's maniacal insistence on producing the most of all components in-house, we can add Gigafactory 2 in Europe as well to the list above.
Where will all this lithium come from? This is the very good question to ask the best experts at coming Benchmark Minerals Intelligence Lithium Batteries Supply Tour 2016, which will start in London on June 6th at UBS. I will give you a teaser and few links on this blog to dig out your own conclusion. Albemarle is the top lithium producer now. SQM is struggling with political issues, FMC is struggling with lithium production and both are producing Lithium for less than 20% of revenue. It means that even if you can technically produce more, you have to sell 80% more of other products as fertilisers as well. Ganfeng and Tianqi are taking the market by the storm and both are in fierce competition. Now Tianqi controls Talison with Albemarle (Albemarle has acquired Rockwood Lithium) and Ganfeng is buying lithium spodumene from Talison and lithium brine concentrate from SQM. It is not very well constructed base for the exponential growth and at AGM on 21st of September 2015 Ganfeng Lithium has officially informed its shareholders: "its major risk is the security of lithium supply." Ganfeng has invested in Neometals and approved budgets for International Lithium J/V projects in Ireland and Argentina. Ganfeng owns 15% stake in International Lithium. The presentations below will provide you with more initial information for your due diligence. Read more."
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