“While other battery metals including cobalt and nickel are down significantly from highs hit earlier this year, lithium continues to sell at record prices with carbonate prices doubling this year alone.”- ANIMATION: Race is on for global lithium mining domination-mining.com
Battery Metals are a Long-Term Priority for Miners and Manufacturers
“At today’s price, Tesla is on the hook for a bit over $100 billion for the 11.1 million tons of raw materials it needs to build 20m cars.” – mining.com
Elon Musk, love him or hate him, is our favorite engineer, entrepreneur, and billionaire to watch. Anyone with professional interests in heavy industry can’t afford not to keep an eye on the magnanimous Musk, the man with a finger in every heavy industry pie from the deep tunnels in the Earth to eventual missions to the Moon and ultimately Mars. He’s even been known to move mountains in the social media world, as his recent dabbling with the Twitter acquisition showed us.
Elon Musk was and is a pivotal leader in the push to mine essential lithium to make his all-electric green dreams come true, but the reality of 2022 may be a wake-up call for Musk and the “carbon-zero” disciples who just can’t seem to crunch the numbers when it comes to sustainable energy management.
In Elon’s case though, his green agenda is more about marketing than it is about science. And, as always, Musk is always willing to make a move to profit from the incredible demand for magnet metals, a demand that he himself ignited. As we reported another bold Musk Tweet last spring.
“Price of lithium has gone to insane levels! Tesla might actually have to get into the mining & refining directly at scale unless costs improve. There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.” 2:59 PM · Apr 8, 2022
Now our magnet metal mogul Elon may have to revise the ambitious production benchmarks he put in place for Tesla back in the wondrously naive green world of 2020. That’s when Musk boldly declared in a notable if not notorious tweet, that Tesla will reach production of 20 million vehicles per year “probably before 2030.”
But with covid shutdowns and supply chain disruptions, Musk’s affordable $25,000 Tesla Model 2 seems to have quietly been pushed off the back burner. In any case, Musk’s mining plans, announced back on Tesla Battery Day in 2020, failed to leave much of an impression on the experts at mining.com. As energy writer Frik Els wrote concerning the Battery Day pomp and hype;
“Much of the three hour-plus presentation was low on detail, high on promotion and stratospheric on ambition, (it is ever thus) but Tesla’s plans to start mining seemed particularly simplistic.”- Mines are the biggest holes in Tesla’s $25,000 car plans
The Worldwide Lithium Race is On
Even without the illustrious Musk’s promise to mining’s major players that Tesla was ready to scoop up all the lithium the mining industry could produce, the world’s geopolitical-driven demand has transformed the most essential battery metals into mining industry gold.
Not surprisingly, nationalized state-owned operations are making major moves to tap into the record-high profits of the current lithium market. Carbonate prices actually doubled this year, even while other battery metals such as nickel and cobalt dropped from their 2022 highs.
The international line-up in the race for lithium includes favorites ranging from Australia to Canada and everywhere in between, with South American countries and Mexico looking to win, place, and show what they can produce to satisfy the world’s “insatiable appetite” in the race for more lithium.
- Australia moved ahead of #2 Chile as the world’s dominant producer of Lithium 5 years ago
- Chile still attracts major lithium investments, with state-owned mining giant Codelco, the world’s largest copper supplier, commencing lithium exploration in the Salar de Maricunga.
- Mexico claimed exclusive rights over lithium, which the government passed legislation to characterize as a “strategic mineral”.
- Argentina anticipates investments in the lithium sector worth $4.2 billion over the next five years, a figure that mining.com considers to be a conservative estimate.
- Zimbabwe- Congo-Kinshasa, an industry-leader in the battery mineral cobalt, is now taking an aggressive position in the lithium market.
- China- Investors from China are now investing heavily in Zimbabwean projects.
Social License Obstacles in the US and European Lithium Mining Industry
So where are the US and Europe in the global lithium horse race? Left in the dust, for now, thanks to the standard rounds of social and environmental activism. All too often major mining players with the capital and operational resources to meet the doubling of demand for lithium, cobalt, and other battery essential minerals in the US and Europe can’t even get out the gate.
Intense environmental opposition in Serbia is flying in the face of the enormous Jadar Project, one that mega-mining player Rio Tinto says is critical for closing the inevitable lithium supply gap. According to Rio, even 60 new lithium mines commencing operations would be insufficient to fill the demand gap, a problem the company says must be addressed in the next ten years.
In the US the Thacker Pass project in Nevada is encumbered by fierce legal opposition launched by a local native American tribe and neighboring ranchers. Overcoming local opposition and obtaining the required “social license” to ramp up production is keeping the US and Europe bogged down in the gate.
#1 producer Australia also faces “social licensing” problems, with preservation of “sacred hard rocks” was cited as the priority by indigenous tribes leveraging their lucrative positions for all they are worth.
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