Thursday, 6 April 2017

Warren Buffett's BYD Joins The Lithium Race To Secure The Supply Of The Critical Commodity For The Energy rEVolution.

The security of lithium supply is everything now for the major players from China targeting the exponentially growing New Energy markets which are fueled by the coming mass adoption of electric cars and Energy Storage for Solar and Wind power generation. This story is finally getting into the headlines and on the radar screens of investors. 

FT reports about BYD which is backed by Warren Buffett entering the lithium supply game with SQM from Chile. Their attempt not to depend solely on "The Big Lithium Top Five" and establish their own supply chain for lithium shows that nobody would like to depend on a goodwill of competitors even marching under the same flags. Vertically integrated lithium energy storage businesses are being built as we speak. 

The ugly truth is that last year lithium supply has grown only 14% while lithium prices have increased 74%. To simply call this situation as creating the culture of a cut-throat competition for the new sources of raw materials will be the dramatic understatement. The question at stake is literally the ability to get the production lines going.

"This supply chain for Tesla Gigafactory is going all the way around the Globe and back to China. Panasonic is buying its lithium chemicals from China. China is "The Centre of The Lithium Universe"Lithium is the magic metal at the very heart of this Energy rEVolution and International Lithium is Lithium Strategic Investments and Royalty Company which is plugged-in the most dynamic EV and Energy Storage markets in China with partners like a giant from China Ganfeng Lithium."

International Lithium And Ganfeng: International Cooperation Brings Big Lithium Hopes For Argentina.

Please read legal disclaimer. There is no investment advice on this blog. Always consult a qualified financial adviser before any investment decisions. DYOR.

Kirill Klip, Executive Chairman, International Lithium Corp.

The ongoing Green Energy rEVolution is hungry for resources. When "reds are going green", dragons are coming back into the commodity sector with an increased appetite. China is heading now the 4th Industrial rEVolution and very quickly building a manufacturing base for the 21st century. China's New Energy Plan has been carefully crafted to leapfrog the old technologies and straight into the post carbon world. China is leading the world now in Solar and Wind Generation capacity and the world's biggest market for electric cars is already in China. There are more electric cars sold now in China than in Europe and the US combined. To secure its geopolitical advance, "China will plow $361 Billion into renewable power generation by 2020."

Maybe you have missed it, but China became the Centre of the Lithium Universe. BYD, the Chinese company backed by Warren Buffett, is the largest EV manufacturer in the world, thus the Chinese companies are producing the largest amount of lithium chemicals for the batteries required to make them. The market is booming and there are currently more than 25 companies making more than 70 models of electric cars in China. Over 500,000 EVs were sold in China last year alone. By comparison, it took GM 7 years to sell 100,000 Chevy Volts since 2009 which was eclipsed by the EV sales by BYD in just the last year! Read more."

International Lithium And Ganfeng Lithium Announce Maiden Resource Estimate At The Mariana Lithium Brine Project, Argentina.

Kirill Klip, Executive Chairman of ILC stated, “I am very pleased that as part of our successful strategic transition at International Lithium we are announcing a maiden resource estimation of our main project in Argentina, the Mariana lithium-potash brine project, together with our strategic partner Ganfeng Lithium. Now we are working on the clear, transparent and most cost efficient structure to advance our joint ventures with Ganfeng in order to ensure the rapid advancement of the projects.”


BYD in talks with Chilean lithium producers

Chinese electric carmaker wants to secure supplies of key battery material

by: Henry Sanderson in Santiago BYD, the Chinese electric car and bus company part-owned by Warren Buffett, is talking to lithium producers in Chile about potential deals to secure supplies of the key battery material.

Fred Ni, vice-president of BYD Americas, said the company was considering a range of options from partnerships to supply agreements and direct investments.

“It’s still in negotiation stage. We haven’t defined which model it will be,” Mr Ni said at the CRU world copper conference in Santiago. “We consume 20 per cent of the lithium supply in the world — that means we have a strong interest to secure stable supply of lithium.”

Chile is one of the world’s largest sources of lithium, a key ingredient for batteries, which is extracted from brine trapped beneath the country’s Atacama Desert. Sociedad QuĂ­mica y Minera de Chile (SQM) and US-based Albemarle are two of the country’s largest producers, while the government is also encouraging state-owned copper company Codelco to develop deposits.

Beijing wants to double electric vehicle battery capacity by 2020, and has encouraged producers to invest overseas. Chinese companies have sought out positions in the lithium-ion supply chain by buying up mining assets.

Ganfeng Lithium, one of the country’s largest producers of the battery chemical, bought a 19.9 per cent stake in an Argentine lithium project earlier this year. The deal followed on the heels of a purchase of a 2.1 per cent stake in SQM by Tianqi Lithium.

Mr Ni said BYD was also worried about the price of cobalt, another metal used in batteries. Most of the world’s cobalt is produced in the Democratic Republic of Congo by mining company Glencore.

The company has started to use cobalt-containing batteries in its new Tang and Qin passenger vehicles. These batteries typically have a higher energy density, allowing them to store more power per kilogramme.

Cobalt prices have more than doubled since last year due to strong demand from battery makers for cobalt chemicals, and as a group of hedge funds stockpiled the metal in warehouses.

“The price of cobalt is very volatile. That is the material that manufacturers are trying to reduce,” Mr Ni said.

“We saw before when we were doing rechargeable batteries for cell phones and notebook computers that the cobalt price increased four times within a year. We can imagine if we have so many electric cars on the street how much cobalt we are going to use.”

BYD’s electric vehicle sales rose 70 per cent last year to 96,000 vehicles. While growth is likely to slow this year after China’s government reduced subsidies for buyers, the company is targeting around sales of around 150,000 cars and buses.

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