Tesla interest could spark new Nevada gold rush for lithium – by Andy Colthorpe (Storage-PV Tech.com – September 07, 2015)


A gold exploration and mining company has agreed to purchase a potential site for excavating lithium in Nevada, citing the “great deal of attention” brought onto the state by Tesla’s decision to locate its mammoth manufacturing facility there.

The EV-maker’s decision to go into stationary storage, officially confirmed at the end of April, followed a period in which Tesla was supplying its partner SolarCity with battery-based energy storage in a number of pilot projects for houses and for the installer’s DemandLogic commercial solution.

The confirmation brought high-profile attention onto the energy storage industry, sparking mainstream media interest. By that point, it was already well known that Tesla was building a “Gigafactory” in Nevada and the announcement of the launch of Powerwall, for houses, and PowerPack for the commercial and utility-scale markets merely confirmed the company’s ambitions beyond EVs. The Gigafactory’s planned “500,000 battery packs by 2020” of production would be soaked up by stationary storage too.

In the final week of August this year, Tesla signed a conditional long-term lithium hydroxide supply deal with Canadian company Bacanora and British company Rare Earth Minerals. Bacanora is a minerals explorer, while Rare Earth Minerals owns Sonora Lithium Project, aiming to develop a “low-cost”, “sustainable” mining project in Northern Mexico based on clay deposits, in collaboration with Bacanora.

The Sonora mine does not yet exist, but could yield between 35,000 and 50,000 tonnes of lithium deposits annually if successful, which would include the lithium hydroxide useful to Tesla for making batteries, as well as lithium carbonate. The deal will be extended and scaled up contingent on the mine’s ability to meet Tesla’s forecasted and actual output from its Gigafactory, pencilled in to be up and running by 2017.

The two Sonora project partners will need to find debt or equity to finance such operations, with Tesla permitted under the deal to participate in financing activities.

The gold rush

In the short term, the deal appears to have caused some consternation in Nevada following its reporting in local news outlet, Las Vegas Sun. There was dissatisfaction that following tax breaks given to Tesla as an incentive to develop the Gigafactory worth as much as half a billion dollars, the lithium to supply the facility could be outsourced from Mexico. One local politician, Democrat state senator Tick Segerblom, even tweeted, “Tesla to get lithium from Mexico – where’s Trump when you need him?”

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