To fully comprehend how ambitious decarbonization of the entire economy will be & some of the gaps Breakthrough Energy Ventures are attempting to fill, let’s first examine the Lithium battery materials which is where this article all started.
Lithium
There are two naturally occurring concentrated sources of Lithium (Spodumene & Brine) identified below & these are from 3 countries – Australia, Chile & Argentina
Australia – with large deposits of hard rock Lithium in the form of spodumene has already completed a number of lithium refineries over the past few years, with some major organisations planning to add to this in coming years – “Once a gold miner, IGO is repositioning itself as a batteries metals producer.”
IGO are currently commissioning a 24ktpa Lithium hydroxide refinery with another expected to be commissioned (24ktpa) in 2024 & a further 2 x 24ktpa in the future.
IGO plans for Australia to develop Nickel, Lithium, Copper, Cobalt, Gold
Chile, Argentina – This is where the Critical Minerals wedge from the
Breakthrough Energy Ventures Portfolio first comes into play.
Lilac Solutions have developed an Ion exchange process based on similar processes used to extract uranium, which extracts Lithium from Brines avoiding the need for evaporation & vastly improving recovery time & % recovered.
They have partnered with an Australian stock exchange listed company, Lake Resources, who have a number of Lithium Brine Resource exploration/extraction rights in Argentina.
Over the past week Lilac Solutions & Lake resources have announced
Lake Resources secures 25% project level investment from Lilac Solutions in Kachi Project $50M
Lilac Solutions secures $150m for its brine lithium extraction technology
Cathode
If you recall Cathode Chemistry is currently NCA, NMC, LFP with long term predictions to see an increase in Nickel, reduction or elimination of Cobalt & constant with Iron Phosphate which is the preferred chemistry in China. So the main raw materials are Manganese(Mo), Alumina (Al) Cobalt (Co), Nickel (Ni). Cobalt & Nickel are the two where it was identified the critical metal supply is projected to be insufficient.
Cathode
Kobold Metals is the second one which stands out from the Breakthrough Energy Portfolio. Kobold means the equivalent of Goblin in German which is what Cobalt was traditionally known as by miners due to it’s occurrence along with Arsenic.
The element cobalt’s name comes from the German word kobold, meaning goblin or evil spirit. It was named by miners in 16th century Saxony who thought they had found deposits of silver but had actually found cobalt arsenide.
Kobold’s team comprises 1/3 experienced mineral exploration team along with 2/3rds software developers, data engineers, data scientists. They have collated enormous amounts of data from publicly available mining data & worked on structuring this data. The second part of their technology is AI based called Machine Prospector. Knowing that Cobalt occurs along with other minerals producing a geochemical signature, they use algorithms that interrogate the database to find the targets that fit the models of those they know contain the mineral they are looking for. And they are looking for Cobalt.
Kobold only weeks ago have signed with the world’s second largest miner, BHP
BHP signs partnership deal with billionaire-backed AI explorer KoBold
Democratic Republic of Congo – as mentioned previously, the country with the largest deposit of Cobalt is the DRC. Circling back to Andrew Forrest who has recently joined the Breakthrough Energy Coalition –
Andrew Forrest’s $100b Congo power play
The DRC has a terrible record of child labour, exploitation of workers & environmental disregard when it comes to their mining of Cobalt. Tesla have reduced cobalt use to tiny amounts in their cars with a goal to continue to reduce or eliminate Cobalt from their manufactured products.
So in the short term, Kobold Metals now working with BHP & you would hope IGO, FMG, RIO, will be able to identify suitable Cobalt targets. The longer term may just see Andrew Forrest & the Fortescue Future Industry teams build that $100B hydro project & with it be able to lift DRC Labour standards to a level in the mining industry that is world’s best practice instead of world’s worst.
Redwood Materials – is the third critical metals related company in the Breakthrough Energy Portfolio. I’ll revisit this company later in this discussion, but their recovery rates aimed at Lithium, Nickel, Copper, Gold, Silver, Tin, Palladium, Tantalum, Neodynium & of course Graphite (carbon) are some of the world’s best.
Redwood says it can recover between 95-98% of critical materials from recycled batteries, such as lithium, copper, nickel and cobalt.
Nickel – this is probably the one raw material which is most noted for it’s omission from the Breakthrough Energy Portfolio. It has also been noted by Elon Musk that it is the metal that worries Tesla the Most.
Rather than Nickel being eliminated from the chemistry of Lithium batteries, the plan is to increase it’s utilisation, Hi-Nickel Batteries whilst reducing other materials such as Cobalt & Magnesium. Noted that it is used in both NCM & Tesla’s NCA batteries. So this is a strange thing to have little focus on by the BEV.
Until you look at Andrew Forrest’s Wyloo Metals major holdings :
Poseidon Nickel – 12.17% (10 Aug 2021 ASX announcement)
Mincor Resources – 15% (28 Aug 2020 ASX announcement)
Panoramic resources – 3.21% (3 Jun 2020 ASX announcement)
Noront Resources – 37.3% (Convertible Note executed on 23 September 2021)
Obviously Mincor and Panoramic where I used to work so they’re the only three assets in Australia that could be producing Nickel within the next sort of 15 months. In terms of new projects. I mean obviously Western Areas have got Odysseus which is which is as well but that’s pretty much it.
Poseidon Nickel MD Peter Harold New World Metals Conference September 2021
What is important in all of this is the following – during past down turns Nickel companies have withdrawn production by closing mines & concentrators. In all 3 cases mentioned by the MD of Poseidon – Panoramic Primero to process ore for Savannah restart August 2 2021
Poseidon set to refurbish Black Swan ahead of restart September 10 2021
Mincor Restart of operations well underway at both Cassini & Northern Operations Sep 7 2021
On top of this
BHP enters into nickel supply agreement with Tesla Inc 28 July 2021
Three Australian based Nickel miners are in the final stages of restarting operations with a fourth, BHP securing a supply contract with Elon Musk to alleviate at least part of Tesla’s potential raw material constraint.
Noted that Andrew Forrest has sold down his Poseidon & Panoramic stakes whilst directing funds towards the Noront resources bid. Noront is based in Canada so would logically supply North American battery manufacturers. What should also be noted in the majority holding battle currently being waged between Forrest backed Wyloo & BHP, Wyloo does not want total ownership of Noront.
If one were able to help influence increasing nickel supply so as not to slow the uptake of electric vehicles via supply constraints or excessive raw material cost, this is one way to do it.