The battery revolution: balancing progress with supply chain risks (RCS Global – August 2017)

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For the full report: http://www.rcsglobal.com/wp-content/uploads/rcs/pdfs/RCS-Global%20The-Battery-Revolution.pdf

The lithium-ion (Li-ion) battery is set to fuel a revolution in electric vehicles (EV), home energy storage and even the powering of entire cities. Yet, increasing demand for the Li-ion battery is revealing and amplifying a wide spectrum of risks associated with the materials that make up the battery itself.

As new battery technology transforms consumer markets, there is a growing realisation that the transition to electric is not without social and environmental impact in the countries where battery materials – specifically cobalt, lithium, nickel, graphite and manganese – are mined and chemically processed into battery grade materials.

These risks present significant reputational, legal, compliance and commercial concerns for major industries harnessing the battery revolution including automotive, electronics and utilities infrastructure. For local communities, the risks represent impacts that could exacerbate or even cause environmental and social problems ranging from air pollution to child labour to conflict.

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Water woes may leave green-car hopes high and dry – by Antony Currie (Reuters/Nasdaq.com – August 28, 2017)

http://www.nasdaq.com/

NEW YORK, Aug 28 (Reuters Breakingviews) – Water problems could leave the burgeoning market for green cars high and dry. Ford is the latest to ramp up its electrification efforts with a planned joint venture with China’s Anhui. Trouble is, the industry relies heavily on the Democratic Republic of Congo for cobalt to make electric vehicles’ lithium-ion batteries.

Players like BHP Billiton need secure water supplies for their cobalt-mining operations. They also are big consumers of electricity, which is produced mostly by hydropower. With the Congo River running near 100-year lows after two years of drought, blackouts are a big risk.

Wastewater – the theme of the World Water Week conference that kicked off in Sweden on Sunday – is another problem. Adding untreated industrial sludge back into the river basin would make a bad situation worse: the majority of Congolese already lack access to safe drinking water.

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It’s Party Time for the Metals No One Knows About – by Thomas Biesheuvel and Mark Burton (Bloomberg News – August 24, 2017)

https://www.bloomberg.com/

It’s turning out to be a great year for minor metals. Rechargeable-battery ingredient cobalt has gained 83 percent, while ruthenium, used in the chemical industry and electronics, is up 63 percent.

The latest star is vanadium, an obscure silvery-grey metal thought to have been used to harden steel as far back as the Crusades. The metal, which is also used in energy-storage batteries, has surged 67 percent since mid-July, according to Metal Bulletin data.

Much of vanadium’s rise has been driven by policy changes in Beijing. The China Iron & Steel Research Institute has proposed increasing the amount of vanadium required in construction steel, which would boost consumption, according to VTB Capital and SP Angel research. The new standard is expected to be announced in September.

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Nickel mining: the hidden environmental cost of electric cars – by Max Opray (The Guardian – August 24, 2017)

https://www.theguardian.com/

The extraction of nickel, mainly mined in Australia, Canada, Indonesia, Russia and the Philippines, comes with environmental and health costs

As countries the world over legislate to phase out petrol and diesel cars, attention is turning to the environmental impact of mining the materials needed for electric vehicle batteries.

This additional scrutiny has largely focused on ethical concerns with cobalt and lithium supply chains, despite Tesla CEO Elon Musk’s observation last year that the lithium ion batteries his vehicles use are mostly made of nickel and graphite, with lithium itself merely “the salt on the salad”.

But the extraction of nickel – predominately mined in Australia, Canada, Indonesia, Russia and the Philippines – comes at an environmental and health cost.

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Is child labor the price for e-cars? – by Helle Jeppesen (Deutsche Welle – August 23, 2017)

http://www.dw.com/en/

Whether in cars, laptops or smartphones, cobalt is in nearly all batteries. The biggest supplier is the Democratic Republic of Congo, where human rights are often violated in the mines.

Young men, armed with only torchlight and tools climb down in a deep, dark hole, without helmet or security gear. The path becomes even smaller as they go further down in the unsecured tunnel. To remove the cobalt, the young miners use chisels and hand hooks and then place the gem rocks into bags, which are then pulled up by another miner above ground.

The rights group Amnesty International witnessed this scene during a research trip in Kasulu, the former Katanga province in the Democratic Republic of Congo (DRC). These mine workers are known in the DRC as Creuseurs, loosely translated as the diggers.

The mining work is divided among everyone. Men dig for the rocks in the tunnel, women wash the rocks in the river, and children are tasked with separating the cobalt from the rock with their bare hands.

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Hunt for Next Electric-Car Commodity Quickens as Prices Soar – by Laura Millan Lombrana and Susanne Barton (Bloomberg News – August 23, 2017)

https://www.bloomberg.com/

Niche metal cobalt is leaving bigger names like copper and lithium in its dust, triggering a hunt for new deposits from Idaho to Chile.

As one of the key components in the new breed of rechargeable batteries and with supply dominated by the Democratic Republic of Congo, prices have surged at four times the pace of major metals in the past year.

That’s caught the attention of governments, explorers and money managers, with annual demand set to increase 34 percent until 2026 as electric cars gain a bigger share of the global auto fleet, according to CRU Group.

Authorities in Chile, the top copper-producing nation, are embarking on a fact-finding mission with a view to restart cobalt production after a more than seven-decade hiatus. First Cobalt Corp. is merging with two other firms to create what it calls the world’s largest explorer of the mineral.

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OPINION: Switch to Renewables Won’t End the Geopolitics of Energy – by Meghan L. O’Sullivan (Bloomberg News – August 21, 2017)

https://www.bloomberg.com/

Countries that dominate the export of rare-earth minerals will be the petrostates of tomorrow.

In another sign that the age of fossil fuels is waning, the California State Senate has passed a bill to commit the state to use 100 percent renewable energy for power by 2045. Other states and cities — including Massachusetts, Chicago and Atlanta — intend to make similar switches. Proponents highlight a bevy of ways in which the Age of Renewables will improve our lives: lower carbon emissions, cheaper electricity rates, new abilities to bring power to impoverished nations … and independence from the economic and political entanglements of volatile global oil and gas markets.

Yes, there are many reasons to be enthusiastic about a shift toward renewables. Unfortunately, an escape from energy geopolitics is not likely to be among them.

Americans and Europeans in particular are familiar with the geopolitical downsides of a heavy reliance on fossil fuels. Even though energy embargoes are extremely rare, and hardly ever in the interest of the producers, the specter of the 1973 Arab oil remains. For many in Eastern Europe, the 2006 and 2009 gas cut-offs to Ukraine by Russia are an equally disturbing memory. Simply the threat of such actions carries political weight.

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It’s Hard to Keep Up With All That Lithium Demand – by Laura Millan Lombrana and Jonathan Gilbert (Bloomberg News – August 22, 2017)

https://www.bloomberg.com/

Hidden within the salt flats high in the Andes mountains of South America are vast deposits of the lithium that Elon Musk may need for his electric-car revolution. But extracting the mineral from brine ponds created by Orocobre Ltd. has proved more difficult than expected.

Bad weather and pump glitches meant production at the Olaroz facility in northern Argentina was 21 percent below Orocobre’s initial target in the year through June. While things are getting back on track, Chief Executive Officer Richard Seville says the company “either underestimated the complexity or overestimated our capability.”

Producers everywhere have struggled to keep up with demand as electric cars went from almost no sales a decade ago to more than half a million vehicles last year. The battery in a Model S from Musk’s Tesla Inc. uses about 45 kilograms (100 pounds) of lithium carbonate. More mines are planned, but difficulties at Olaroz — the first new South American lithium mine in two decades — are limiting funding for new ventures in Argentina, home to the world’s third-largest reserves.

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Anglo American makes expensive bet on hydrogen fuel cell cars – by Barbara Lewis (Business Day – August 18, 2017)

https://www.businesslive.co.za/

London — Anglo American is placing a contrarian bet on hydrogen fuel cell vehicles as it tries to squeeze more profit from its platinum reserves, but risks being left behind as rival miners look to cash in on battery-powered cars.

A push, particularly in Europe and China, for lower-emission transport, raises the prospect of weaker demand for platinum, whose biggest industrial use is in diesel vehicles. Other big miners are positioning themselves for the shift away from the combustion engine by betting on lithium and cobalt, both used in electric vehicle batteries.

Glencore signed a major deal last October to sell 20,000 tons of cobalt products, a hitherto niche material whose production it dominates, while Rio Tinto is sitting on a large deposit of lithium. As the world’s top supplier of platinum, Anglo American is left with little choice but to remain committed to the metal.

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Electrifying everything: After electric cars, what more will it take for batteries to change the face of energy? (The Economist – August 12, 2017)

https://www.economist.com/

No need for subsidies. Higher volumes and better chemistry are causing costs to plummet

ABOUT three-quarters of the way along one of the snaking production lines in Nissan’s Sunderland plant, a worker bolts fuel tanks into the chassis of countless Qashqais—the “urban crossover” SUVs which are the bulk of the factory’s output. But every so often something else passes along the line: an electric vehicle called a Leaf.

The fuel-tank bolter changes his rhythm to add a set of lithium-ion battery packs to the floor of the Leaf. His movements are so well choreographed with the swishing robotic arms around him that he makes the shift from the internal combustion engine to the battery-charged electric vehicle look almost seamless.

Until recently, it was a transition that many found unthinkable. The internal combustion engine has been the main way of powering vehicles on land and at sea for most of the past century. That is quite the head start. Though Leafs are the world’s biggest-selling electric vehicle, the Sunderland plant, Britain’s biggest car factory, only made 17,500 of them last year. It made 310,000 Qashqais. And the Qashqais, unlike the Leafs, were profitable. Nissan has so far lost money on every Leaf it has made.

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Electric cars: The death of the internal combustion engine (The Economist – August 12, 2017)

https://www.economist.com/

“HUMAN inventiveness…has still not found a mechanical process to replace horses as the propulsion for vehicles,” lamented Le Petit Journal, a French newspaper, in December 1893. Its answer was to organise the Paris-Rouen race for horseless carriages, held the following July.

The 102 entrants included vehicles powered by steam, petrol, electricity, compressed air and hydraulics. Only 21 qualified for the 126km (78-mile) race, which attracted huge crowds. The clear winner was the internal combustion engine. Over the next century it would go on to power industry and change the world.

But its days are numbered. Rapid gains in battery technology favour electric motors instead (see Briefing). In Paris in 1894 not a single electric car made it to the starting line, partly because they needed battery-replacement stations every 30km or so. Today’s electric cars, powered by lithium-ion batteries, can do much better. The Chevy Bolt has a range of 383km; Tesla fans recently drove a Model S more than 1,000km on a single charge.

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Vedanta explores ways to produce cobalt for batteries – by Barbara Lewis (Reuters U.S. – August 15, 2017)

https://www.reuters.com/

LONDON (Reuters) – Vedanta Resources (VED.L) is studying how to produce cobalt for use in batteries as the diversified miner becomes the latest company to seek exposure to an anticipated electric vehicle boom.

Tom Albanese, who steps down as CEO of Vedanta at the end of August, said the excitement around electric vehicles had prompted the company to looking at producing cobalt suitable for batteries from its Zambian copper mines, rather than just treating it as a copper by-product.

Vedanta is also betting on continued use of conventional fuel and in April completed the merger of its Indian metals and mining group Vedanta Limited (VDAN.NS) with oil and gas company Cairn India Ltd (CAIL.NS).

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Why gasoline and Diesel will be around for a long time to come – by Norris McDonald (Toronto Star – August 12, 2017)

https://www.thestar.com/

“If more people buy EVs instead of internal-combustion vehicles, how will
governments make up the tax shortfall? Right now, about 40 per cent of what
you pay per litre for fuel at the pump goes to governments.”

I spend a lot of time these days reading, listening and discussing the use of electricity to propel automobiles compared to conventional gasoline and other alternatives, such as hydrogen. It comes with the job. The ground is shifting, and it’s better to be on top of what’s happening than running to catch up.

So, I’ve been reading about how Big Oil will react when everybody starts running out to buy electric cars. And how the end of internal-combustion will be just like the end of film for cameras — it will (seemingly) come out of nowhere and be so sudden that everybody will wake up one day and wonder what happened.

And that some European countries will ban the sale of gasoline and Diesel-powered cars as of such-and-such a date. And the province of Quebec will soon start fining automakers that don’t sell enough EVs.

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Cornish Lithium project secures 1 million pounds for exploration – by Barbara Lewis (Reuters U.S. – August 14, 2017)

https://www.reuters.com/

LONDON, Aug 14 (Reuters) – British mining company Cornish Lithium has secured 1 million pounds ($1.30 million) to explore for lithium in Cornwall, southwest England, its CEO said, taking the country a step closer to a domestic source of the strategic mineral.

Lithium plays an essential role in electric car batteries, and is produced by evaporation in Latin America, which has been considered the cheapest source. But new technology to extract lithium from brine is helping to make other options more viable.

In January, Cornish Lithium said it had reached a mineral rights agreement with Canada’s Strongbow Exploration. It then said it needed around 5 million pounds to develop its project to extract lithium from underground hot springs and to supply products to the rapidly growing battery market for electric cars and for power storage.

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Why electric vehicles are closer than they appear – by David Olive (Toronto Star – August 12, 2017)

https://www.thestar.com/

We are in the early stages of a revolution in automobiles. The widespread adoption of all-electric vehicles and of driverless, or autonomous cars, is much closer on the horizon than it appears.

Until last year, the consensus forecast was for electric vehicles (EVs) to account for about one-third of vehicles on the road by 2040. But breakthroughs in the technology of EVs and the batteries that power them; stepped-up government advocacy of them; and automakers’ bet-the-company commitments to them have sharply altered that forecast. In May, researchers at the International Monetary Fund (IMF) forecast that as much as 90 per cent of vehicle production worldwide will be EVs by 2040.

Yes, that’s 27 years off. But the transition is well underway, and market saturation by EVs could come much sooner. This month, Tesla Inc. is rolling out its first mass-market EV, the Model 3. It’s generally thought in the industry that if the Model 3 succeeds, electrification of all vehicles is a sure thing.

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