Resource World Magazine

24 www.resourceworld.com D E C E M B E R / J A N U A R Y 2 0 1 9 growth in battery production capacity. He says graphite will be the core raw material for lithium-ion battery anodes for at least the next five years and he expects that new technologies will begin to gain traction. According to Miller, the graphite indus- try has strong industrial foundations in markets where substitution is limited, such as steel. The World Steel Association forecasts 3.9% growth in steel demand in 2018, and a 1.4% growth in 2019. New value-added markets, such as batteries and stationary storage application, are emerg- ing and challenging the supply going into industrial sectors. These markets will be the main demand drivers for the graphite market. Batteries still play a secondary role to traditional applications, but the demand for graphite in lithium-ion batteries is growing smartly and lithium-ion batteries will eventually become the number one market for graphite. Miller said the natural graphite versus synthetic graphite debate rages on. Steve Riddle, CEO of New Jersey-based Asbury Carbons, noted in an interview that natural graphite is not easy to sell, mine and pro- duce to market requirements. For example, natural graphite can't be used to make car- bon fibre or used in the nuclear industry, and processing synthetic graphite increases cost. Miller remarked that most anode pro- ducers aim to mix input raw materials to gain benefits from both types. Supply chain concerns persist for natu- ral anode materials. Emphasis for these materials is on grade, environmental foot- print and supply consistency. Synthetic supply is also a concern, despite major attempts to increase production and efficiency in China; for example, in pro- duction timescales, capital intensity of expansions and environmental footprint. Mark Thompson, Managing Director of Australia's Talga Resources Ltd. [TLG- ASX], expects markets to see a disruption in traditional purchase patterns and pric- ing for next few years. He says multiple lithium-ion 'megafactories' are under con- struction or planned in the European Union (EU) and major car markets are now starting to turn to EVs. He says the major- ity of raw materials (cobalt and graphite) are imported into Europe from Africa or from China (graphite). This rocket- ing growth is underwritten by many EU governments legislating against internal combustion engine powered cars. CATHODES 2018 The Cathodes Conference focused on lith- ium-ion battery cathode components, and the area where most technological devel- opments are being made to improve energy density, life cycle, and cost. Cathode mate- rials are at the centre of the lithium-ion battery revolution. Andy Leyland, Head of Forecasting and Consultancy, Benchmark Mineral Intelligence, says the lithium mar- ket in 2018 is confusing when it comes to supply and price. He assumes significant battery growth and says the threat of over- supply is greatly exaggerated. Leyland says investments are not coming fast enough due to a lack of certainty in pricing in lith- ium, graphite, nickel and cobalt. He says new lithium supplies will come from South American brine. Brine also comes from China, but the quality is questionable. He says new hard rock projects are unlikely to result in a significant chemical supply. Like Miller, Leyland points out that a lot of money is available for EVs, but not for mines. He says that despite bullish- ness on demand, financing major projects is difficult. Large companies like SQM [SQM-NYSE] are self-financing; however, even with acquisitions, they can't keep up with demand growth. Volatile short-term prices in China are a poor market indicator. SQM's quarterly price change is the best indicator. Leyland advises not to expect prices greater than the "new normal" of US $12-14 per kilogram "any time soon." Like Thompson, Leyland notes that government policies continue to drive investments in batteries, EVs and the charg- ing infrastructure, but not in investments to produce the raw materials to support them. BATTERY MINERALS The Electra Meccanica Solo single-seat, three-wheel electric car is manufactured in Vancouver, British Columbia, Canada. In addition to its dealership in downtown Vancouver, its first US dealership is located in the Los Angeles suburb of Studio City. Powered by a lithium-ion battery, the car goes zero to 100 kph in eight seconds with a top speed of over 130 kph with a 160-km (100 mile) range. Retail price is CDN $19,888 (US $15,500). A two-seat roadster is in the works. Photo courtesy Electra Meccanica Vehicles Corp.

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