Senior Editor and Analyst at InvestorIntel, Peter Clausi interviews
Dr. Weiguo Lang, CEO of Ultra Lithium about recent events at the company.
Scientists from the University of Saint Andrews in Scotland recently made a breakthrough in the production of EV lithium-ion batteries by adding gold to the mix. The team previously discovered that an air-breathing lithium-ion battery could potentially store up to 10x times the energy that standard lithium-ion batteries do, but they hadn’t figured out what materials would make the right combination. They now believe that gold could be the key, as it can stand up to the rigors of repeated charging and discharging.
The Saint Andrews researchers used gold to create an experimental battery that will pave the way to a viable mass-market lithium battery that could potentially power an electric car for hundreds of kilometers.
In their paper, which was published in the journal Science, the team said that their experimental lithium–air battery featured an organic electrolyte (dimethyl sulfoxide) and a porous gold electrode which managed to maintain 95% capacity after “100 charge–discharge–recharge cycles.”
The problem with current lithium ion batteries is their storage capacity, which has led to the slow uptake of electric vehicles. These batteries use a metal oxide or metal phosphate cathode as a positive electrode, a carbon-based anode as a negative electrode, and an electrolyte to conduct lithium ions from one electrode to the other. However lithium-air batteries would change all that for the better, whilst increasing efficiency.
“Lithium ion batteries are in many ways the best we have right now in terms of energy density, and they’ll be with us for quite some time, including in electric vehicles,” according to Saint Andrews chemistry professor Peter Bruce. “But we already know that if we can double the energy storage in those batteries, that’s going to be the limit of what’s possible. Lithium ion batteries won’t meet our needs moving forward, hence the interest in looking at alternatives such as lithium–air.”
Lithium–air batteries essentially take oxygen from the air whilst the vehicle is in motion. This reduces the need for heavy-metal oxides that add weight to the battery while allowing the oxygen molecules to react with lithium ions and electrons on the surface of a porous gold cathode to form lithium peroxide. This process would then power the car’s motor.
“We’ve demonstrated that the electrochemical reaction that needs to take place in an air battery does work and does seem to be reversible,” Bruce said, however he stresses that it was gold that made it all possible. “We don’t really know what it is about the nanoporous gold that seems to give us this level of stability, more work needs to be done to determine this.”
The electric vehicle revolution is gathering momentum.
Barely a week goes by without a fresh, startling revelation, whether it be Sweden’s Volvo promising to phase out traditional internal combustion engines from 2019 or France aiming to end the sale of gasoline and diesel vehicles by 2040.
And, of course, leading the electric charge is the poster child of the green technology revolution, Tesla, which is gearing up to roll out its Model 3, the long-awaited breakout from niche to mass market.
The ambition is to be producing 20,000 a month by the end of the year. Whether reality matches such lofty goals remains to be seen. Tesla delivered around 47,000 vehicles in the first half of the year, at the lower end of its own forecasts, owing to a “severe shortfall” of battery packs.
Tesla shareholders are used to this sort of thing, but the battery-pack delays are a reminder that this accelerating technology revolution rests on a long, complex and still-evolving materials supply chain.
We don’t know at which precise point of that chain Tesla’s battery bottleneck appeared, but questions over the reliability of battery materials supply go all the way up the chain to the brine lakes of the Atacama Desert in South America.
Simply put, will there be enough lithium – and lithium in the right chemical composition – to support exponentially growing demand for batteries?
Oligopoly flexing its muscles
A year or so ago, the answer appeared to be “no,” which is why lithium prices went ballistic and the rest of the world outside what was then an esoteric, specialty market sat up and paid attention.
Spot prices have since calmed down, that for lithium carbonate currently trading in a stable $18-to-$21.70 (U.S.) per kilogram range, compared with more than $25 in early 2016, according to the publication Industrial Minerals.
New producers such as Orocobre’s Salar de Olaroz brine operations in Argentina and Neometal’s Mt. Marion hard-rock mine in Australia are gearing up. More will join them over the next 18 months.
The existing oligopoly, comprising FMC Corp., Albemarle Corp. and Chile’s SQM, is meanwhile flexing its collective capacity muscles.
Analysts at The Lithium Spot expect supply to grow by around 35,000 tonnes in lithium carbonate equivalent (LCE) terms to 235,000 tonnes this year. That, they point out, is pretty much in line with the average demand forecast, meaning “demand is either right in line or could be slightly outpacing supply for 2017.”
They expect another 60,000 tonnes of additional supply to kick in over the course of 2018.
The assumption is that all the new capacity increases smoothly. It’s a big assumption, given Orocobre’s teething problems and delays and downgrades to another new Australian mine, Mt. Cattlin, operated by Galaxy Resources.
Filling the pipeline
The two leaders in this chase for more production are Chile’s SQM and China’s Jiangxi Ganfeng Lithium, which is now big and integrated enough to claim at least honorary place at the lithium top table.
The two companies have joined forces with junior miner Lithium Americas and Thai energy company Bangchak to develop the Cauchari brine operations in Argentina with first-phase 25,000-tonne per year LCE production pencilled in for 2019.
Hot on the heels of SQM’s foray across the border came a July 11 announcement it will acquire a 50-per-cent stake in Kidman Resources, which is developing the Mt. Holland hard-rock project in Western Australia. First production at the 40,000-tonne per year LCE operations is also scheduled for 2019.
In addition, SQM is expanding its existing Chilean operations as it seeks to “capture the opportunities that arise in the lithium market,” to quote company chief executive Patricio de Solminihac.
Minding the gap
All of which may be good news for Tesla and its peers sitting at the other end of the supply chain, but it would seem to bode ill for the countless junior miners aiming for a piece of the lithium action.
The Big Three, or Big Four if Ganfeng is included, are understandably keen not to loosen their historic grip on the market even as it enters a period of potentially explosive growth.
But those hoping to form part of a third, future supply wave shouldn’t lose hope.
Because while supply appears to be firming up, demand remains a fast-moving, elusive part of the price equation.
As recently as March this year, SQM said it believed lithium demand “could grow over 10 per cent per year in the near term.” Fast forward four months and it has lifted that estimate by four percentage points.
And this, remember, is one of the most knowledgeable players in the lithium space with more than 20 years of operational and marketing experience.
If it is being wrong-footed by the speed of change in lithium battery usage, it’s a fair bet that everyone else is struggling to make sense of such dynamic fundamentals.
The potential for supply-demand gaps to open up over the coming decade is significant.
Even a hardening consensus that there will be enough supply for the next two or so years rests on a series of questionable assumptions about how efficiently new supply can be brought on stream and then integrated into the existing production chain.
Beyond that short-term time frame, the uncertainties just grow ever larger.
Joe Lowry, lithium industry consultant and commentator, takes the view that even with the recent spate of new project announcements, it is quite possible that a “supply shortage will cause significant issues in the battery supply chain by 2023.”
Even relatively advanced projects are still struggling for finance despite all the media hype around lithium, according to Mr. Lowry, while Tesla’s charismatic CEO Elon Musk “seems to think that if he builds cars, the lithium will come.”
Actually, even Mr. Musk might be having second thoughts on lithium supply after those “severe delays” in getting battery packs in the first half of the year.
Overview of Projects
Laguna Verde Brine Lithium Property
– Laguna Verde Brine Maps & Photos
La Borita Brine Project
– La Borita Brine Photos
– La Borita Brine Maps
Amelia Brine Lithium Property
Archibarca Brine Lithium Property
Georgia Lake Lithium Pagmatites
– Georgia Lake Lithium Photos
South Big Smoky Valley Project
– South Big Smoky Photos
– South Big Smoky Drill Core
– South Big Smoky Maps
Ultra Lithium Inc.
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