A Revolution In Industrialization Is Underway

 

Richard (Rick) Mills
Ahead of the Herd

Page 1 of 2

 

As a general rule, the most successful man in life is the man who has the best information

Imagine with me for a moment that the car market is at the start of a major transition. Why would I think that? Well…

  • Electric cars deliver full torque from a standstill so they have impressive acceleration. They are fun to drive!
  • Electric cars are quiet, there is no combustion, no muffler.
  • Electric cars do not use explosive fuel, there is no gas tank.
  • Electric cars are cheaper to operate, electricity being cheaper than gasoline.
  • Electric cars are also cheaper to maintain than combustion systems. Having far fewer parts makes the car less complex, easier and cheaper to maintain – there’s no ignition, exhaust, timing or cooling systems.
  • Electric cars can be plugged in at home and you wake up with a fully charged battery every day.
  • No more getting ‘hosed’ at the gas station, not even the day before a long weekend when combustion engine car owners are lining up.
  • Road trips have currently been extended to over 400 km on a single charge.
  • A network of charging stations is being built.
  • Tesla’s car battery can be guaranteed for a full eight years. Other manufacturers will follow this achievement.
  • Old batteries can and will be recycled. Current technology saves a minimum of 70 percent on CO2 emissions involved in creating lithium-ion batteries from scratch.
  • Zero tail pipe emissions.

I think that by 2020 battery-powered cars will become a no-brainer purchase for many of us.

 

The most recognized name in electric cars at the moment is Tesla Motors whose goal is to ship 500,000 cars in 2020. To reach that goal would require the entire battery industry to more than double production. That’s just Tesla - never mind other existing players and new entrants into the electric car market.

 

If ten percent of all cars on the road were to become battery-powered global battery production would require an astounding 20-fold increase.

 

JB Straubel, Tesla's chief technical officer,  called this a "massive revolution in industrialization, on a scale that is kind of hard to imagine."

 

 

Tesla Motors has plans to build, by 2017, the world's largest lithium-ion battery factory - a ten million square foot manufacturing and recycling center it calls ‘Gigafactory.’ Tesla says its Gigafactory alone will eventually produce 35 gigawatt-hours of battery capacity every year which is more battery power than was produced globally in 2013.

 

Gigafactory will lower costs by shifting material, cell, module and pack production to one spot eventually allowing Tesla to roll off their assembly lines as many as half a million electric vehicles per year.  

 

There are three essential components to a lithium-ion, or Li-ion, battery:

  • An anode which is the negative electrode, it’s made from graphite.
  • A cathode is the positive electrode, it’s lithium with cobalt based chemistry.
  • An electrolyte, lithium salt is used as the conductor.

Lithium is not in short supply, as a matter of fact the market is currently in oversupply.

 

The graphite market is a different situation. There is currently a projected deficit if even just Tesla’s goals are to be met. However there is no actual shortage of graphite at this time and dozens of junior resource companies have graphite projects with many of them quite advanced.

 

That’s not the case for the other critical and strategic component of the lithium-ion battery – cobalt.

 

Much more cobalt is used in a lithium-ion battery than graphite. As a matter of fact LiNiCoAlO3 (Li-NCA) batteries typically have nine percent cobalt by weight. That equates to roughly six kilograms of cobalt per vehicle.

 

According to Robert Baylis, an analyst for Roskill, the Gigafactory alone will require an additional 6,750 tonnes of cobalt (current global annual demand 75,000 tonnes) when operating at full capacity. That’s hugely significant when you consider most cobalt is produced as a by-product of nickel mining (57%) and copper mining (37%) - only 6% of our cobalt use is supplied from primary cobalt operations.

 

The USGS calculates cobalt reserves are dispersed as:

  • Africa 52%
  • Americas 17%
  • Australasia 24%
  • Asia 7%

Some minerals are considered more important than others. A critical or strategic material is a commodity whose lack of availability during a national emergency would seriously affect the economic, industrial, and defensive capability of any country.

“Cobalt is considered a ‘technology enabling’ substance as its at the forefront of technological developments and innovation, whether for energy storage systems and catalytic processes, which are so important for the global green agenda, or enabling greater efficiencies in the operation of gas turbines. So subtle and essential is cobalt that it also forms the basis of many established and new biotech applications crucial for human health and diagnostics. In fact cobalt is so important for industrial development that the EU has recognised that it is a ‘critical’ metal for the EU in its Raw Materials Initiative, which was undertaken to help support EU industry from the effects of possible disruption to the supply of critical mineral availability.” Cobalt Facts, 2013, CDI

The U.S. Department of Homeland Security, in its most recent report, classified cobalt as a critical mineral.

 

The French Bureau de Recherches Géologiques et Minières rates high tech metals, including cobalt as critical based on three criteria:

  • Possibility (or not) of substitution
  • Irreplaceable functionality
  • Potential supply risks

 

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