Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Another problem may be logistical. At present, much of the refining activity takes place in China. But the instability of some battery components means they can't be easily transported. So unless Europe can build its own refineries - with hundreds of millions of dollars of investment - it may be difficult to secure a larger slice of the battery supply chain.
"We'll see refineries close to the battery factories. Transporting the materials any distance is just not going to happen," said Murray.
China's investment in developing its own EV sector focuses more on public transport and government vehicles than on private consumers. But rules such as the requirement for all taxis in Shenzhen to be EVs have boosted confidence in some quarters about the potential of China's EV revolution to contribute to a bright year for the battery materials sector in 2020.
"Chinese initiatives are very important," said Carnizelo. "Next year will pick up impressively - I expect to see at least 2 million in sales next year. I've no doubt of a bright year for the EV industry."
https://www.miningnews.net/events-coverage/news/1376818/ev-market-needs-more-funding?utm_source=12%2f03%2f19-01%3a42%3a47-193+-+%27We%e2%80%99re+right+before+the+turning+point%e2%80%99%3a+Widdup+Newmont%e2%80%99s+Aussie+production+to+grow+2019+littered+with+high-profile+collapses+Smith+arrives+as+Metals+X+board+cleanout+completed+Poor+pricing+for+Orocobre+highlights+two+year+slump&utm_medium=email&utm_campaign=12%2f03%2f19-01%3a42%3a47-193+-+%27We%e2%80%99re+right+before+the+turning+point%e2%80%99%3a+Widdup%3b+Newmont%e2%80%99s+Aussie+production+to+grow%3b+2019+littered+with+high-profile+collapses%3b+Smith+arrives+as+Metals+X+board+cleanout+completed%3b+Poor+pricing+for+Orocobre+highlights+two+year+slump&utm_term=%27We%e2%80%99re+right+before+the+turning+point%e2%80%99%3a+Widdup+Newmont%e2%80%99s+Aussie+production+to+grow+2019+littered+with+high-profile+collapses+Smith+arrives+as+Metals+X+board+cleanout+completed+Poor+pricing+for+Orocobre+highlights+two+year+slump+in+fortunes+&utm_content=66754&gator_td=XOMRTrOr65Uzm3cPdYAa85%2f630MZ3Ae9mpwR5Cscj%2b8hVmp4pGlh9yjGelGkguUZRbSqp12FQhxV4ipR%2bEBZWCVxjH6rIXjd5sgRDz%2bWmx1QRdAAELecl36v3lf3O0lnxfHY7m6ELK2BYLpO3apx7YFis%2fHtMKXWFw%2f1z%2fbEkHhkfARs3E%2b8mNc6nJhtf%2bYS7Go16TbMqUExtapbSUfIcoWV0CWUYwfwiqWkpDPncmkVf0eKTTHEITFG%2bkG0RkbXYVKRM3MG8TGA9E2QAkm3F0d0o0J%2f9gYpDp1aAGhho4%2fHsqci0aFEIUsi2hQaMaU7TRxrDZoDQgk5%2byzO40Ti6NWpjY668k8jVtPeYD4TBMdkW9QqpcVKpcxOgKZtcUGuE0WktChmj6IGZAmpU7hVBXs4RFv4nJL5upkTkBE5KzsV0uCGzoub83Qz1TyUPKDCjN%2bwUlJJu6QFck%2bug0qboGEz%2bNoa%2f78cVX4Lpk24%2fzg%3d
Europe lags behind other parts of the world in investment in its battery metals supply chain. While projects such as Savannah Resources in Portugal and European Metals in the Czech Republic are probably furthest forward, neither yet can mine and refine battery-grade lithium in Europe. However, the European Union has made some funding available for the development of battery minerals within Europe.
"We're putting in place a system to invest in Europe in partnership with the EU," said Berenguel-Anter. "We started with EUR40-50 million. We are gathering a handful of projects and will increase the facility further if more emerge."
However, Smith said the car companies were also moving to invest in EVs because of the swinging fines they could face if they didn't act.
"Car makers are making these EVs whether or not they make money, because if they don't the fines are enormous - up to 10% market cap by 2021 unless they rework their fleet," he said. "As many as 50 models will hit the market next year."
Consumers may be held back in some markets by the fact that the average internal combustion engine car is only 60% the price of the average electric car. But price equivalence has already been reached in some places and may be reached in the majority of countries by 2023, according to Pala Investments data.
"At that point it's no longer policy-driven, it just becomes about buying a better car," said Aline Carnizelo, portfolio manager at Pala Investments.
"The car companies are betting volume production will lead to price parity," said Murray. "A momentous shift is coming. It's really coming very fast."
However, the speed of change and the unreadiness of the full supply chain highlighted the likely importance of ramping up battery material recycling if the industry is to meet future needs.
"The target to do this by 2030 or 2040 - it's tomorrow for us," said Girard. "We need at least six years to develop a car. The only solution to reach the target is recycling."
The urgent need for more battery recycling infrastructure was also highlighted by Berenberg research. The company's analysis suggests widespread expectations that battery costs will continue to decline are misplaced.
If correct, this would imply the need for a dramatic scale up in recycling to alleviate the cost bottleneck by increasing available supply.
"You're dreaming if you think the cost will go below $100 per kilowatt hour," said Berenberg battery metals analyst Asad Farid.
"People think the cost will keep coming down because high nickel cathodes use cheaper materials, or because there is a learning curve. This is naive thinking. The cost of batteries will not decline significantly - in fact it's going up. Hydrogen cathodes are less stable and need more processing. We need to see a lot more recycling."
"We don't have the expertise to invest in a mine," Renault Nissan Mitsubishi head of strategic environmental planning Catherine Girard told a mining investment conference in London last week.
"Direct investment? No. But that doesn't mean we don't want to secure our resources. It is our ambition to be a key part of the EV revolution, and we are always talking to new stakeholders to develop that business."
Renault Nissan Mitsubishi sold 400,000 Nissan Leaf all-electric cars up to March 2019. The companies sold 10 million vehicles of all types in 2018.
However, the lack of direct investment in mining by any of the major car companies - despite enormous plans for EV production from Volkswagen, BMW and others - prompted Will Smith, chief investment officer at Westbeck Capital Management, to express concerns about the discrepancy.
"We're going to find this is a problem. At the moment none of the battery manufacturers are concerned about sourcing materials. I think they're complacent," he said.
"We are going to need a lot more battery metals in three to four years. Right now we've got oversupply. There will also be a quality problem as well. If you can produce the highest grade you're going to be fine. But we've seen time and again new producers have real difficulty satisfying consumer demand," he said.
Smith pointed to producers in South America, which had struggled to produce battery grade material and had in some cases resorted to shipping low grade material to clear off their production stockpile.
Other industry participants expressed concern about the dangers of sourcing battery materials from outside Europe, given increasing concerns about political expropriation, child labour and environmental issues.
"We need more investment," said Ana Berenguel-Anter, senior banker and associate director, natural resources at EBRD. "We are talking millions of EVs. Where is the supply coming from? Developing countries with resource nationalism? Is there corruption and modern slavery in the supply chain? It's impossible to know, and consumers want answers."
However, there is relatively little time for any teething troubles to be worked out. In the UK, the carbon emissions produced by vehicles will need to reach 67g per km travelled by 2030, according to Jacqui Murray, deputy director at the Faraday Battery Challenge, part of the state-funded Industrial Strategy Challenge Fund in the UK. The average as of November 2019 is around 110g/km.
"We are sitting on a cliff edge," she said. "The internal combustion engine is reaching the limits of efficiency, and even hybrids aren't going to get us down to 60g/km by 2030."
Murray pointed to investments made by Jaguar and Land Rover into converting factories to produce electric vehicles.
"A conservative forecast is for eight gigafactories in Europe by 2040 just to supply the automotive sector, and that's before rail transport or consumer activity are considered," she said.
06:01 good link fingers - thanks
That's very encouraging in terms of an organisation lining itself up to ensure board members and management are all focussed on reaching long terms goals and gives me confidence in getting to production into the Li supply chain
keeping everything crossed
How Professional is CEZ ? :
One of the arguments against it was that the beneficiaries of the Stock Option Program do not live the entire shareholder story - they benefit from stock price growth but, unlike shareholders, do not lose any value if the stock price declines.
https://www.cez.cz/en/cez-group/media/press-releases/7019.html
Now that does not sound like they are rip off merchants .
More Customers Coming !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
https://auto.economictimes.indiatimes.com/news/industry/tesla-move-will-draw-further-companies-into-germany-state-premier/72307651
Haha, that's why I stay in fella!
Dare I say Newboy Logic normally prevails .
Nothing will ever dampen your spirits where EMH is concerned fingers, that's for sure!
Interesting Fingers and I agree.
I am wondering what the reaction would be if VW had bought 51%. Is it because its a company 70% owned by the CR govt? What if Equinor (Norwegian Govt.) had bought 51% which they do with many oil and gas opportunities. I am struggling to understand the negative sentiment.
Fingers; what say with the 60/40 debt equity split that the 40% equity is actually the deal we have done with CEZ as they bring debt finance with their political and economic clout?
Notice Germany trading nearly 10% higher than AIM , we know what happened last time they wanted shares .
The way I see it crk , Geomet is the holder of the project , there is now a 49/51 % partnership just like any other . Both partners will now have to cough up funds appropriate to that split to maintain the partnership , where they each get those funds is of no concern of each other , the funds just need to be raised to maintain harmony in the relationship . Cez may elect to fund from their existing cashflow ( we don't really care where the funds come from ) and Emh will need to raise with a cap raise to fund their 49 % of the project , KC has clearly indicated in the past that finance for the 60 % of the 60/40 equity split is on the cards , hence why I suggest the %age split between EMH and Cez for the balance . So the only dilution now for EMH is the Cap Raise for Capex , The amount that Cez are giving us for this deal is way in excess off what we need for the DFS , I should imagine these funds will be used for prepurchase of high priority long lead time critical components of production . happens on a regular basis here . So the shares we had already on the our existing registry wont change until the production cap raise , based on my absolute guess with a bit of a twist and a pike , I am punting with new production figures to be announced , mining permits in hand and a couple of sizeable offtakes we could easily be worth $2.00 Aud a share ( based on 160 millon shares ie $320 mil market cap for half the project ) so if we need to raise capital at this price it is only 100 million shares per $200 mil raised . Ie we may only have aprox 260 million shares on issue B4 we go into production . To do it all ourselves I had us pegged at 5 to 6 hundred million shares , so this way , in a way we lose nothing but gain a very respectful powerful partner , which really we always needed . We now have a Parklane and Mayfair partner as apposed to old kent road and white chappel . I know who I would rather be with .
Fingers,
All that needs to be tempered by understanding where the Capex is coming from and what debt burden vs dilution it might cause. Capex to projected NPV ratio can give a good starting point at the profitability of the venture to "the company" but funding impact on dilution and interest payments etc will dictate how much of the company we still hold when we get to production.
I'm invested but not clear on these points at present I have to admit
Now that was a good and useful statement!
I can cut back ant , but would suggest to you there is a reason for posting this stuff . As a penny dreadful company EMH had no other recourse other to do a PFS based on 20,000 tonnes to show the marketplace a somewhat achievable goal in the scheme of things and available funds they thought they could raise by themselves . We pretty much know there is plenty of finance that will flow our way via Deutche bank and EU re battery related industries , so there is 60 % finance for our project . The economics are way too positive . We now have a big brother with big , big , big deep pockets , A billion is petty change for them , and EMH only now has to find 19.6 % of the capex and Cez 20.4 % of the capex , Now IF EMH management thought they could raise $500 mil on their own , we could probably still be able to raise that amount but it would go to a Bigger picture Capex and hence twice or thrice production . We all know how much Lithium will be required and I would suggest there will be an upgrade in production tonnage for the DFS . Simple maths have it : double production triple the profit , thrice the production quadruple the profit . No chance in hell we will only do 25,000 tonnes . That is why this is such a great deal . EMH shareholders may have lost half the profit , but we are also not being diluted in our current form pockets , on our own we would never have been able to even contemplate a higher production target and would certainly been diluted by as much had we raised capital at 25 % discount to the market . This big brother Cez will set the tone not only for the offtakes that we have been discussing for 2 years and bring them forward as KC said in interview , but with those big deep pockets ensure the project will be able to do a much higher production target . And as said earlier if CEZ can assist with doubling our production target EMH has lost nothing in the deal , as we would never have been able to raise that sort of capex on our own . You have to remember for every additional 10,000 tonne of Lithium is worth a staggering hundred million in profit , and additionally if they mention double profit our share price would double immediately too . I see very exciting times over the next few months , mining permits and offtakes will be ensuing .
LOl What do we say to VW when they ask for a 40,000 tonne offtake . PLease rack off we can only give you 17,000 tonnes because we have 8 tonne commited to HE3DA . Just AINT gunna happen .
Fingers, it's great to read these reports and analyses of demand, but to be honest, we all know the demand is there and will grow substantially. I for one don't need to be told. I know the market for Li is going to explode and I know we're well positioned for that explosion. As does everyone here. You may have noticed that despite all your positive market news on this board, the share price is inexorably falling. It's clarification on the deal and more good news as to how things are progressing that's required. Where is the expected KC interview? Rather than items on how much demand there'll be, where is information on EMH's position? This is all people want.
World demand to rise 5.3% annually through 2018
Global demand for buses is projected to advance more than five percent per annum to 664,000 units in 2018, twice as fast as the 2008-2013 rate of increase. The number of buses in use worldwide is expected to exceed eight million units in that year.
So the Bus community will use 332,000 tonnes of Li per annum on their own . And to replace that 8 million buses will need 4 million tonnes of Li .
I find it absolutely intriguing that when any discussion is made about the lithium demand we focus on a standard car , this article below is again about buses , we in Australia are converting our buses and USA has hardly started in consideration that a bus has 10 times more Li than a car , I would suggest that at some stage soon , and very soon all the different types of vehicles will be viing for the same Lithium . As Lowrie said in his interview , where is the worlds strategy to actually be able to deliver 1,000,000 tonnes of Li in the next year or so . I know , a third of it will come from EMH . Just watch this space over the next few months . No chance in hell we are only going to produce 25,000 tonnes of it a year impossible !
https://auto.economictimes.indiatimes.com/news/commercial-vehicle/mhcv/ashok-leyland-bags-order-for-1750-buses-from-tamil-nadu-state-transport-undertakings/72253553
https://www.electrive.com/2019/11/26/us-fta-awards-423-million-dollars-for-electric-bus-projects/
I don't know anything like enough about this as perhpas I ought to... but I do understand the resulting overall process is extremely cheap and efficient. To be honest, that's all I need to know. ( I hadn't actually realised that iron was relevant :-( )
What's the latest on EMH's iron content? I suspect it's a blessing and a complication at the same time, allowing the efficient wet-magnet separation process, but probably requiring a later processing stage to filter out?
https://www.bloomberg.com/news/articles/2019-11-19/tesla-set-to-bulk-up-the-world-s-largest-lithium-ion-battery
https://investingnews.com/daily/resource-investing/battery-metals-investing/lithium-investing/andrew-miller:-lithium-prices-close-bottoming/
https://www.electrive.com/2019/11/18/volkswagen-to-build-id-3-electric-car-in-dresden/