Australia’s Galaxy Resources (ASX:GXY) confirmed on Tuesday that it was on track to begin production at its Sal de Vida lithium brine project, in Argentina, by 2022, despite the covid-19 pandemic impacting the development schedule.
The Perth-based lithium producer and developer put the brakes on its flagship project in April, following a nation-wide lockdown ordered by the Argentinean government to contain the spread of the coronavirus.
Work resumed in May under strict provincial protocols, which Galaxy said has hindered ground transportation and the movement of employees during the current design phase.
Overall impact on the overall schedule had been minimized through the adoption of an early works phase, Galaxy said. The company noted that while is still targeting first production in 2022, it expects it now in the fourth quarter of the year.
Early works, such as pond construction and the procurement of long-lead items, are expected to begin in early 2021.
Galaxy Resources has de-risked the Sal de Vida Project by developing a simplified flowsheet, using mature technology and staging development.
Low-cost brine mine
The company aims to have a highly-competitive, low-cost lithium brine mine on the Salar del Hombre Muerto salt pan in north-west Argentina.
The project lies over 4,000 metres above sea level, part of the so-called “lithium triangle” that includes neighbouring Chile and Bolivia, and which is home to more than 60% of the world’s annual lithium production.
Galaxy estimates Sal de Vida would take $474 million to develop and generate $354 million in annual revenue.
The company estimates it will spend about $12 million in the second half of 2020 on piloting, engineering, well drilling and owner costs.
Over a mine life of 40 years, Sal de Vida is expected to yield up to 25,000 tonnes a year of lithium carbonate for batteries and 95,000 tonnes of potassium chloride, a key fertilizer ingredient.
The company, founded in 2018, has acquired rights to an area of about 1,000 square kilometres (386 sq. miles), where it plans to begin collecting geophysical before the end of the year.
KoBold’s backers include big names such as Venture capital firm Andreessen Horowitz and Breakthrough Energy Ventures. The latter is financed by well-known billionaires including Jeff Bezos, Ray Dalio, Michael Bloomberg, Richard Branson and Gates.
KoBold aims to create a “Google Maps” of the Earth’s crust, with especial focus on finding cobalt deposits. It collects and analyzes multiple streams of data — from old drilling results to satellite imagery — to better understand where new deposits might be found.
Algorithms applied to the data collected determine the geological patterns that indicate a potential deposit of cobalt, which occurs naturally alongside nickel and copper.
Chief executive officer Kurt House believes the company’s exploration activities at the site in Quebec could help prove the value of its approach.
“The subtleties in the geophysical signals are really only evident when you have all of the data and can evaluate it in a systematic, statistically rigorous way,” he told Bloomberg on Tuesday. “It’s just too much for the human brain to handle.”
KoBold’s boss noted the company was likely to begin collecting geophysical data in the next three to six months. Drilling, House said, could start in a couple of years.
The California-based firm also expects to bring in other investors, potentially including its current backers, on a deposit-by-deposit basis. It will also seek mining-savvy partners once it has identified an interesting project.
Not a miner
KoBold, as House has stated multiple times, does not intend to be a mine operator “ever”.
This is not the first time the American start-up eyes Canada. Public records show that Faith in Gravity Holdings Inc., which is registered in British Columbia, staked last year claims in the northeast corner of Saskatchewan.
The miner says recent exploration activity in the ancient mining region of Cornwall, south-west England, has proved “highly encouraging”. The company will now plan further phases of drilling in both geothermal waters and in hard rock, to begin as soon as “current conditions allow”.
“Following Brexit, and as the UK moves to reopen its economy after the covid-19 pandemic, the UK Government is focussed on becoming a world leader in battery technology and electric vehicle manufacturing,” said chief executive Jeremy Wrathall.
“It is now apparent that the creation of a battery and electric vehicle industry in the UK is more likely to happen if the nation has a domestic supply of lithium, especially if this lithium can be responsibly sourced with a low-carbon footprint,” Wrathall said.
The timing couldn’t be better. The European Union is currently rebuilding their automotive supply chains around battery metals, and incentivizing the adoption of electric vehicles (EVs), Chris Berry, president of House Mountain Partners, an industry consultant, told Bloomberg on Tuesday.
China, which was originally planning to wean customers away from EV subsidies by 2020, recently announced a two-year extension through the end of 2022.
Beijing also made a 10% cut to subsidies this year and also limited the scope of subsidies to EVs costing less than 300,000 yuan ($42,750).
Cornish Lithium has decided to also begin exploring for other battery metals, such as cobalt and copper.
Cornish Lithium has also expanded and consolidated the areas over which it has rights to explore for lithium and other minerals. Its team has assembled a vast amount of historical data and reconstructed it in 3D digital format, enabling a totally new understanding of the geological potential of Cornwall’s mineral deposits.
Most lithium is produced in South America, Australia and China, but the UK government designated it last year a metal of strategic importance to the country.
A previously side-lined EV battery cathode material – LFP, composed of lithium iron and phosphate – has come to the forefront in 2020, thanks to its inherent safety, low cost, and the simplified battery pack design that it allows, a white paper published by Roskill reveals.
According to the market analyst, the abovementioned set of reasons may be the driving forces behind Tesla’s, BYD’s and Volkswagen’s decision to choose LFP cathodes to power their electric vehicles in the Chinese market.
When it comes to safety, for example, Roskill points to the fact that the Chinese Ministry of Industry and Information Technology issued new regulations this year which will require EVs to inhibit any fire or explosion within five minutes after a thermal runaway incident happens in battery cells.
“To achieve that level of protection, Chinese EVs using nickel-based chemistries such as NCM will require mitigation systems; these may include the use of fire-proof mica plates between pack and vehicle, ‘aerogel’ segments distributed throughout the pack, or robust but heavy steel beams, among many other solutions,” the paper’s summary reads. “Such protection systems come at a monetary cost but, more importantly, an energy density cost (given their weight and volume), undoing advances in cell performance that were designed to lower pack cost and, therefore, EV prices.”
After describing the issue, Roskill points to the fact that to avoid costly mitigation systems, carmakers can resort to using inherently safe LFP cathode materials, which would allow them to build simplified battery packs without modules, and without the otherwise necessary but voluminous safety and auxiliary components.
“In the last 12 months, companies such as BYD, CATL and Honeycomb (SVOLT) have revealed several pack architectures using this approach,” the analyst’s document states. “As a result, some of these companies claimed up to 30% higher volumetric energy density, while decreasing the cost by as much as 30%, thanks to a more streamlined pack design.”
Besides safety features, cobalt prices may be pushing the LFP comeback.
“Cobalt price rises in 2018 made the cathode cost on a 50kWh battery pack move up 13-28% y-on-y. Although the cost impact at total vehicle level was much smaller, at 4-7%, this change could wipe out the margin obtained in smaller mass-market cars,” the whitepaper reads. “In comparison, the cost of LFP moved just 1% y-on-y in the same period, with a marginal effect on total car cost.”
To the prices of the blue element, Roskill adds the fact that labour and human rights conditions linked to its mining in the Democratic Republic of the Congo, which is responsible for over 50% of the cobalt produced worldwide, remain murky.
“These environmental, social, and governance (ESG) concerns, coupled with the fact that around 25% of global cobalt reserves could be depleted by 2030 (even when considering ultra-high nickel chemistries and cobalt recycling), pose a significant risk to supply chain disruptions,” the report reads.
Whether LFP will overtake nickel-based cathodes, in Roskill’s view, that’s yet to be seen. The reasoning behind this is that 95% of LFP cathode manufacturing is produced in China and that patent restrictions that confine its production to the Asian country will be lifted only in 2022.
The ongoing and global transition to renewable energies is not exempt of human rights abuses, which could create risks in a sector vital to countering the climate crisis, the first benchmark of companies in the sector, published Monday, shows.
According to UK-based Business & Human Rights Resource Centre (BHRRC), the authors of the benchmark, the renewable energy industry has seen a rise in claims of human rights violations. At least 197 allegations against green energy companies have been filed since 2010, with 40 of them registered last year.
Those allegations, the watchdog says, include killings, threats and land grabs. They prove that efforts to protect workers and communities are falling short, it notes.
“Renewable energy will play a pivotal role in ‘building back better’ following the covid-19 pandemic,” says BHRRC deputy director Marti Flacks. “This makes it even more crucial that the renewable energy sector avoid the mistakes of other energy providers and urgently build respect for human rights in their operations and supply chains.”
The company analyzed 16 of the largest publicly-traded wind and solar producers using a methodology developed through seven global consultations, involving more than 100 stakeholders.
The lower the score, the more work companies have to do to ensure respect for human rights in their operations and through their supply chains.
Firms analyzed include Enel, Blackrock, NextEra, Jinko Solar, China General Nuclear Power Corp, and PowerChina, among others.
The study concluded that nearly half (7/16) of the firms scored below 10%, with three quarters (12/16) scoring below 40%. No entities scored above 53%.
On the most important indicators, the sector’s average score was on par with other high-risk industries, such as apparel, agricultural products, mining and ICT manufacturing, the NGO said.
It doesn’t include original documents nor full transcriptions of court cases against companies. Instead, it just links to either media reports on an alleged abuse or to research by other NGOs working in the field, such as Amnesty International.
One of the most pressing issues, BHRRC says, is related to land-use as some projects have threatened environmentally sensitive areas land utilized by indigenous people. Examples include a wind farm in Norway challenged by reindeer-herders over loss of land; a solar park in Mexico sued over lack of community consent, and a wind farm in Kenya cancelled after lawsuits by farmers and local landowners.
BHRRC’s benchmark outlines policy and practice gaps the sector should address to ensure the transition to a net zero-carbon economy is both fast and fair.
The Renewable Energy and Human Rights Benchmark uses 13 core indicators from the Corporate Human Rights Benchmark to assess companies against the United Nations Guiding Principles on Business and Human Rights (UNGPs).
It uses a further 19 indicators developed to assess risks specific to the renewable energy industry.
Car sales are tanking the world over: Europe is likely to experience a 20–25% drop in overall sales, the US is running at an annualized rate of little over 12m units which is 5m below last year’s total while the Chinese market went into reverse long before covid.
For automakers burnishing their green credentials there is a positive spin: electric vehicle sales – or better still – penetration rates. In Western Europe, according to Schmidt, a market researcher, for the first five months of 2020, 300,000 EVs (including plugin-hybrids) were sold giving battery powered cars a 8.3% penetration rate (in Norway it’s 69%).
In the UK and Ireland it’s just below 7% and in the US, 4.5%. Globally, according to IHS Markit, one in 25 cars sold in the year to end May were battery powered.
But in absolute terms, the market for EVs remain in a deep slump.
The MINING.COM EV Metal Index which tracks the value of battery metals in newly sold EVs around the world has dropped to its lowest level since January 2018.
The decline is due to a combination of lower prices for the lithium, graphite, cobalt and nickel tracked by the index, but mostly due to the sharp fall in raw material deployed, which halved in April compared to the same month last year.
Year to date at a shade under $500bn, the industry has shrunk by 22.6%, the definition of a bear market. That leaves the remaining month of 2020 with a lot of heavy lifting to do for the market to recover.
Despite the sharp correction over the last two years, battery metal prices show little signs of improving. Coming close to the 2019 annual total of $2.1billion now seems a big ask.
The demand for raw materials used to manufacture rechargeable batteries for electric vehicles (EVs) will grow rapidly as the importance of oil as a source of energy recedes, according to a new United Nations Conference on Trade and Development (UNCTAD) report.
According to UNCTAD, ongoing efforts to lower greenhouse gas emissions are expected to spur further investment in green energy production, which has been steady over the years, standing at around $600 billion per year, on average.
“Alternative sources of energy such as electric batteries will become even more important as investors grow more wary of the future of the oil industry,” said Pamela Coke-Hamilton, UNCTAD’s director of international trade.
Electric car sales have boomed in recent years, rising 65% in 2018 from the previous year to 5.1 million vehicles, and are expected to reach 23 million in 2030, according to the International Energy Agency.
The report highlights the significant role of rechargeable batteries in the global transition to a low-carbon energy system.
The worldwide market for cathode for lithium ion batteries, the most common rechargeable car battery, was estimated at $7 billion in 2018 and is expected to reach $58.8 billion by 2024, according to the report.
“The rise in demand for the strategic raw materials used to manufacture electric car batteries will open more trade opportunities for the countries that supply these materials. It’s important for these countries to develop their capacity to move up the value chain,” Coke-Hamilton said.
Reserves of the raw materials for car batteries are concentrated among a few countries. Nearly 50% of world cobalt reserves are in the Democratic Republic of the Congo (DRC), 58% of lithium reserves are in Chile, 80% of natural graphite reserves are in China, Brazil and Turkey, while 75% of manganese reserves are in Australia, Brazil, South Africa and Ukraine.
The highly concentrated production, susceptible to disruption by political instability and adverse environmental impacts, raises concerns about the security of the supply of the raw materials to battery manufacturers.
The report warns that supply disruptions may lead to tighter markets, higher prices and increased costs of car batteries, affecting the global transition to low-carbon electric mobility.
According to UNCTAD, investing more in green technologies that depend less on critical battery raw materials could help reduce consumers’ vulnerability to supply shortfalls in the current mix of materials such as lithium and cobalt, but this would cut the revenues of the countries producing them.
The report indicates that the bulk of value added to raw materials used in making rechargeable batteries is generated outside the countries that produce the materials.
For instance, value added to cobalt ores by the DRC is limited to intermediate products or concentrates. Further processing and refining are mostly done in refineries in Belgium, China, Finland, Norway and Zambia to obtain the end products used in rechargeable batteries as well as for other applications.
The DRC, which accounts for over two-thirds of global cobalt production, has not maximized the economic benefits of the mineral due to limited infrastructure, technology, logistical capacity, financing and lack of appropriate policies to encourage local value addition.
The manufacture of positive electrodes for car batteries is dominated by countries in Asia. In 2015, China accounted for approximately 39% of the global market, Japan 19% and Republic of Korea 7%.
Social and environmental impacts
The report shines a light on the social and environmental impacts of the extraction of raw materials for car batteries and underlines the urgent need to address them.
And in Chile, lithium mining uses nearly 65% of the water in the country’s Salar de Atamaca region, one of the driest desert areas in the world, to pump out brines from drilled wells.
This has caused groundwater depletion and pollution, forcing local quinoa farmers and llama herders to migrate and abandon ancestral settlements. It has also contributed to environmental degradation, landscape damage and soil contamination, the report reads.
The adverse environmental impacts could be reduced by increasing investment in technologies used to recycle spent rechargeable batteries, The UN advises.
First Cobalt (TSXV: FCC) has taken further steps to strengthen its environmental, social and corporate governance (ESG) practices by joining the Cobalt Institute as an associate member.
The Cobalt Institute is the leading forum for global cobalt market participants and helps to shape industry best practice across the supply chain. A key part of its mandate is to promote the responsible and sustainable production and use of cobalt, a key ingredient in electric vehicle batteries.
With this membership, the company says it intends to qualify the First Cobalt Refinery under the Responsible Minerals Initiative (RMI) — one of the most utilized and respected resources for companies that wish to address responsible mineral sourcing issues in their supply chains.
A central tenet of the RMI is application of the OECD Due Diligence Guidance for responsible supply chains of minerals from conflict-affected and high-risk areas.
“Our strategic objective is to offer a premium supply of ethically-sourced cobalt by creating a closed supply chain,” First Cobalt president and CEO Trent Mell stated.
“Over the next several years, Glencore intends to provide the feed for the First Cobalt Refinery from a single mining operation, with no other feed sources entering the downstream supply chain. This will give buyers of our refined cobalt comfort that conflict minerals are not being introduced into their consumer products.”
The company is also in the initial stages of quantifying and benchmarking the expected carbon footprint of the First Cobalt Refinery. To assist with this work, the company has obtained a grant of C$50,000 from the National Research Council of Canada Industrial Research Assistant Program (NRC IRAP) to model its greenhouse gas (GHG) emissions and identify opportunities to reduce its carbon footprint throughout the refining process.
Shares of First Cobalt were down 3.4% as of 2 p.m. ET on the TSX Venture Exchange. The Toronto-based miner has a market capitalization of C$54.2 million.
A violent attack to Société Minière de Bisunzu’s (SMB) coltan mine in in the Democratic Republic of Congo has killed three and injured another three workers, amid an increase of attacks to mining operations mineral-rich eastern Congo.
It remains unclear what happened at the mine in eastern Congo, as the company and unions gave different accounts.
SMB reported a grenade attack followed by gunfire. Workers claimed the three victims were shot dead by security forces.
Earlier this month, the United Nations published a report showing that at least 1.1 tonnes of gold mined in the DRC has been smuggled in the past year into countries along the eastern border.
SMB’s mine near Rubaya, North Kivu province, has seen a spike of violent clashes between local artisanal miners and police hired to prevent smuggling.
The company is the DRC’s top exporter of coltan, a tantalum-rich metal, and also produces tantalum, cassiterite and wolframite.
Automakers and high tech companies including Apple, Samsung and IBM are all under pressure to show metals used in products are sourced responsibly.
The United States passed legislation in 2010 requiring companies listed in the country to disclose where their tantalum, tin, tungsten and gold came from. It also instructed them to perform due diligence.
A similar European Union rule will take effect in 2021 and the London Metal Exchange could ban suppliers of metals that are not responsibly sourced by 2025.
The US Geological Survey estimates that Congo produced 39% of the world’s tantalum last year.