Battery Metals

Gold has long dominated the Western Australian city of Kalgoorlie, born in a late 19th Century prospecting rush and home to one of the world’s largest open pit mines, nestled right next to residential streets. Blasts to dislodge precious-metal laced rock from the more than two-mile-long Super Pit still frequently rattle the main street.

As about 2,700 executives, investment bankers, and industry stalwarts gathered in the precious metals hub last week for Australia’s key annual mining forum it was clear where the industry’s focus lies. All attention is on the frantic hunt for battery metals to deliver the world’s shift to electric vehicles.

The most in-demand mining leaders are no longer those who’ve unearthed vast troves of glittering gold, but instead, the companies delivering previously shunned projects to yield volumes of lithium, nickel, manganese, and cobalt.

A rush of recent supply deals led by Ford Motor to add contracts for battery metals from Australian mining companies is drawing new attention to a nation that already provides about three-quarters of Tesla Inc.’s lithium needs, and is aiming to deliver a rapid expansion in the production of a whole suite of raw materials.

There are few better examples of that gold-to-electric-cars transition than IGO, which has added investments in nickel and lithium while selling off a stake in an underground gold operation. Executives shuttled conference delegates out to see Greenbushes, the largest hard rock lithium mine, and the Kwinana refinery that converts raw materials into specialist battery chemicals.

Hitting global net-zero goals will require a dramatic increase in renewable energy installations and in the adoption of electric vehicles, Peter Bradford, IGO’s managing director, told the conference. “To achieve it we are going to need lots and lots of metal,” he said. IGO and its partners aim to double production capacity at Greenbushes by 2027.

The mining sector’s largest company, BHP Group, is also seizing on the outlook for rapidly increasing battery metal demand. BHP said on Monday it had made a takeover approach to add OZ Minerals, a producer of copper and nickel with mines in Australia and Brazil. Though the proposal has been rejected, analysts see the combination as compelling. OZ Minerals shares advanced 35% in Sydney trading Monday.

BHP forecasts electric models will account for 60% of new car sales by 2030, rising to 90% by 2040, said Jessica Farrell, asset president of the Nickel West unit, a once-unwanted collection of mines, smelters, and refineries, including an operation in Kalgoorlie, that’s had its fortunes transformed by EV sector demand. The unit this month added a potential supply agreement with Ford to earlier pacts with Tesla and Toyota Motor Corp.

“We anticipate demand for nickel in the next 30 years will be 200% to 300% more than the previous 30 years,” Farrell told the conference.

Lithium producers remain the most in demand. Liontown Resources’ executives used the conference to celebrate recent pacts with Tesla, Ford, and LG Chem, while Core Lithium — which also has a tentative deal with Elon Musk’s carmaker — told delegates its project in the Northern Territory is on track to deliver the first shipment before the end of the year.

Pilbara Minerals, which counts Great Wall Motor Co. and battery producer Contemporary Amperex Technology among its partners, this month received a record-equaling bid for its spodumene — a partly-processed form of lithium — at one of its regular auctions.

“What we’re seeing now is record-breaking demand and prices,” Pilbara CEO Dale Henderson said in an interview at his company’s Pilgangoora site in a remote region in the north of Western Australia.

US carmaker Tesla has signed contracts worth about $5 billion to buy materials for their batteries from nickel processing companies in Indonesia, a senior cabinet minister told CNBC Indonesia.

Southeast Asia’s biggest economy has been trying to get Tesla to set up a production facility in the country, which has major nickel reserves. President Joko Widodo met with Tesla founder Elon Musk earlier this year to drum up investment.

“We are still in constant negotiation with Tesla … but they have started buying two excellent products from Indonesia,” Coordinating Minister for Maritime and Investment Affairs Luhut Pandjaitan said in an interview broadcast on Monday.

He said Tesla signed a five-year contract with nickel processing companies operating out of Morowali in Sulawesi island. The nickel materials will be used in Tesla’s lithium batteries.

Tesla did not immediately respond to a Reuters email seeking comment.

Indonesia is keen to develop electric vehicles and batteries industries at home and had stopped exports of nickel ore to ensure supply for investors. The move had successfully attracted investments from Chinese steel giants and South Korean companies like LG and Hyundai.

However, most nickel investment so far have gone to production of crude metal such as nickel pig iron and ferronickel.

The government plans to impose export tax on these metals to boost revenue while encouraging more domestic production of higher-value products, a senior official told Reuters last week.

Critical mineral supply issues are spreading around the globe, forcing countries to put policy and strategy into play to maximise domestic and international value.

The supply crunch, particularly with battery or energy metals, comes in unison with growing demand for the minerals needed to assist the world’s clean energy transition.

The gap between projected supply and projected demand by the end of the current decade, especially in cobalt and lithium, exacerbates the issue.

While we are not heading toward a Mad Max style breakdown of society due to lack of resource, to feed the need for supply, the world needs more resources and better strategies to manage them.

A recent study by KU Leuven University is case in point.

The study shows the European Union’s Green Deal goal of climate neutrality by 2050 will require 35 times more lithium and seven to 26 times the amount of rare earth metals compared to Europe’s current use.

Further to this, 30% more aluminium will be required as well as 35% more copper, 45% more silicon, 100% more nickel and 330% more cobalt.

These are essential metals for the production of electric vehicles and batteries, renewable wind, solar and hydrogen energy technologies, as well as grid infrastructure.

The required numbers run high: about 4.5 million tonnes of aluminium, 1.5 million tonnes of copper, 800,000 tonnes of lithium, 400,000 tonnes of nickel, 300,000 tonnes of zinc, 200,000 tonnes of silicon, 60,000 tonnes of cobalt, and 3,000 tonnes of the rare earths metals neodymium, dysprosium and praseodymium are required above current levels representing an increase between 70 and 2,600% from current levels.

The report notes that “Europe faces critical shortfalls in the next 15 years without more mined and refined metals supplying the start of its clean energy system. Progressive steps will be needed to develop a long-term circular economy, which avoids a repeat of Europe’s current fossil fuel dependency.”

Back in May, Proactive journalist Phoebe Shields outlined the Australian Federal Government’s 2022 Critical Minerals Strategy, designed to grow the critical minerals sector and “place Australia at the centre” of meeting the international demand for critical minerals.

Battery and energy minerals, including rare earth elements, will be critical to Australia’s economy moving forward.

The then Minister for Resources and Water Keith Pitt said: “Increasingly, demand for resources is expanding beyond traditional commodities such as iron ore and gold. The pace of technological development has been accelerating, and with it the demand for minerals critical to sectors including defence, aerospace, automotive, renewable energy, telecommunications and agritech.

“The addition of two new minerals to Australia’s critical minerals list – high purity alumina and silicon – reflects the expanding significance of mineral inputs in strategic applications like semiconductors and electrification.

“Australia has been blessed with extraordinary reserves of the critical minerals needed by these sectors. We produce around half the world’s lithium, are the second-largest producer of cobalt and the fourth-largest producer of rare earths. But we have the potential to do so much more.

“The Australian Government is taking action to grow Australia into a critical minerals powerhouse, capitalising on the strength of our world-leading resources sector, expertise in processing and highly skilled workforce.”

Lithium stocks are much talked about in this transition and you can read about them here.

However, there is surging demand for cobalt, particularly in copper mine waste.

Australia’s governments are sending geologists into the country’s mining territories to scour mine waste for cobalt as the country continues to diversify from fossil fuels to become an exporter of clean energy minerals, such as cobalt, nickel and lithium.

The Queensland government recently sent geology professor Anita Parbhakar-Fox to Mt Isa to look at cobalt in copper waste. She found more than 200 times cobalt’s average presence in the earth’s crust – that’s 7,000 parts of cobalt per million (ppm).

“I nearly fell off my chair when I got that piece of data,” she said, explaining that 300 ppm is enough to get miners excited. “If you’ve got 7,000 ppm, that’s pretty juicy. It was a eureka moment,” she told The Financial Times.

Cobalt became the EV industry’s largest end-use sector in 2021.

As for rare earths, the Russia/Ukraine war is currently disrupting the supply chain and new production has become critical.

Rare earths are key components of everything from solar panels to electric car batteries to defence equipment and much more.

Macro issues have meant prices are sluggish and weak downstream demand and insufficient orders weighed on the overall performance of the market in July.

However, the long-term outlook still remains positive.

The following discussion outlines the latest trends in rare earths.

Horizon Minerals

Horizon Minerals Ltd (ASX:HRZ)’s key highlight for the quarter was the completion of the restructure and demerger of its 25% interest in the 1.8-billion-tonne Richmond vanadium project in northwest Queensland. Richmond Vanadium Technology (RVT) now owns 100% of the project with shares held by Horizon (25%) and the existing shareholders of RVT (75%). RVT’s IPO process has now started. The move gave HRZ the freedom to continue with its exploration drilling with 8,879 metres completed at the Greater Boorara, Yarmany and Black Flag areas testing high priority multi-commodity targets.

The company raised a total of $6 million via placement and SPP and had $5.58 million in cash and $2.3 million in listed investments at the end of the June quarter.

Looking forward the company will continue its large-scale exploration program and release of further drilling results, advance the Cannon, Penny’s Find and Rose Hill underground gold projects, progress the IPO and ASX listing of the Richmond Vanadium Project (RVP) and continue to pursue value-accretive consolidation and divestment opportunities.

First Graphene

First Graphene Ltd (ASX:FGR, OTCQB:FGPHF) delivered record Q4 revenue of around A$359,0001, closing FY22 with around A$723,0001 total revenue, which is 111% revenue growth against FY21. Its revenue performance was the highlight of the quarter, with the Q4 revenue breakdown consisting of 46% from Composites and Plastics, 31% from Cement/Concrete, 12% across Coatings, Adhesives, Sealants and Elastomers (CASE), and 11% in Energy Storage and other revenue streams. Forward-looking orders received for fulfilment within FY23 totalling around A$160,000.

A further milestone was the joint development agreement (JDA) with Greatcell Energy Limited to advance the development of graphene-enhanced solar cells.

First Graphene’s contract with the Graphene Engineering Innovation Centre in Manchester has been extended by an additional 12 months beyond the end of the initial lease period. This enables the company to continue its focus on R&D support for commercial teams and development of energy storage applications. The new lease period runs until 31 March 2023.

American Rare Earths

American Rare Earths Ltd (ASX:ARR) found consistent high-grade mineralisation at Halleck Creek Project, averaging 4,252 ppm Total Rare Earth Oxides (TREO) from surface. This remains open at depth.

The Le Paz Project has demonstrated significant resource upside, with the company now accelerating its exploration plans to expand and upgrade the current JORC 2021 resources at La Paz after receiving highly promising assay results from recent exploration drilling in the Southwest area.

One key highlight was ARR’s US subsidiary, Western Rare Earths, becoming the sole industry member of a consortium led by federal research facility Lawrence Livermore National Laboratory (LLNL).

The company is well funded to deliver on its objectives and as of June 30 has a cash position of A$6.32 million.

Looking forward, drilling permits have been submitted with the Wyoming Department of Environmental Quality for the Halleck Creek Project. This drill campaign will be conducted, with the intention to define a JORC resource at the Halleck Creek Project as soon as feasible. Drill permit approvals are expected in the coming quarter, with a campaign start date announced soon after.

Technology Metals Australia

Technology Metals Australia Ltd (ASX:TMT) received outstanding results from roast-leach testwork undertaken on Yarrabubba material as part of the Integration Study for the Murchison Technology Metals Project (MTMP).

The company also received Notice to Proceed with front end engineering and design (FEED) services on the key roasting kiln section of the MTMP processing plant issued to leading kiln supplier, Danish company FLSmidth.

An early works agreement has been executed with APA Operations Pty Ltd, a wholly owned subsidiary of APA Group (ASX:APA) Ltd for the proposed Gabanintha Gas Pipeline. The implementation phase of the MTMP has started with TMT targeting a decision to develop for MTMP by the end of 2022.

A feasibility study on production of vanadium electrolyte in Australia is underway with support from LE System under an extension of the memorandum of understanding (MoU).

As at June 30, the company had cash of $18.6 million.

Australian Vanadium

Australian Vanadium Ltd (ASX:AVL) released a BFS for its namesake project. The bankable feasibility study released confirms AVL’s Australian Vanadium Project as a potential globally significant primary vanadium producer. Another major highlight involving the project was the receipt of a third letter of intent for iron titanium coproduct offtake sales signed with Chinese steel producer Rizhao Steel.

The company also has an MOU with NHCE for energy market vanadium redox flow battery (VRFB) project development and its trial with Water Corporation VRFB is underway for water purification and pumping applications.

At its Coates Nickel-Copper-PGE Project, first stage drilling has been completed to provide a stratigraphic section as part of WA Government EIS and CSIRO programs. Sampling assay and interpretation is now underway.

During the quarter the company raised $20.57 million and had $26.45 million in the bank at June 30.

International Graphite

International Graphite Ltd (ASX:IG6) listed on the ASX on 7 April 2022 and at June 30 had $8.9 million in cash.

“In the past three months we have experienced significant momentum as we work to lay the foundations for our future graphite operations at Springdale and Collie. The world’s rapidly expanding focus on decarbonisation, and the critical need to plan for an expected shortage of battery materials, provides enormous opportunity,” IG6 CEO Phil Hearse said of the quarter.

A maiden drilling program began in June with two drilling rigs mobilising to IG6’s Springdale tenements.

The 7,100-metre reverse circulation (RC) and PQ/HQ diamond drilling program, comprising a total of 54 RC drillholes (3,300m) and 12 diamond holes (900 metres), will infill the existing Springdale resource, provide additional samples for ongoing metallurgical testwork, and data for initial geotechnical assessments and mine planning. In addition, 37 RC holes (3,000 metres) will be drilled to test a number of high priority exploration targets.

Accelerate Resources

Accelerate Resources Ltd (ASX:AX8) consolidated its position within the highly prospective Woodie Woodie North Manganese Corridor in the East Pilbara region of Western Australia. The company began its phase one maiden drilling program at Woodie Woodie North and an initial seven priority drill targets within the 33-kilometre corridor are being tested.

Historical metallurgical results from E45/5978 (Barramine) indicate manganese ore can be upgraded to 48% manganese, yielding a premium manganese concentrate.

Further to this, recent surface sample results from Braeside West indicate direct ship ore (DSO) potential with an average lump and fine grade of 41.4% manganese and 13.6% iron.

Finally, Accelerate and Vytas Resources delivered a maiden resource for the Tambellup Kaolin Project in the south-west of Western Australia.

Altech Chemicals

Altech Chemicals Ltd (ASX:ATC) announced outstanding results from a Preliminary Feasibility Study (PFS) for the development of a 10,000-tonne-per-annum silicon/graphite alumina coating plant, in Saxony, Germany.

The plant would be constructed by Altech Industries Germany GmbH (AIG) and would produce high capacity silicon/graphite battery anode TM materials “Silumina Anodes” under exclusive licence from TM Altech.

Silumina Anodes products are targeted to supply the burgeoning European electric vehicle market.

With a capital investment of US$95 million, the company estimates a project net present value of US$507 million (NPV8), with net cash of US$63 million per annum generated from operations. The internal rate of return is estimated at 40%, with investment capital paid back in approximately 3.1 years. Total annual revenue at the 10,000-tonnes-per-annum full rate of production is estimated at US$185 million per annum.

Managing director Iggy Tan said: “While Altech’s top priority continues to be financing its Johor HPA project, the TM Silumina Anodes project represents an exciting downstream opportunity to utilise its HPA coating technology in silicon/graphite battery materials. We are pleased and excited about the results of the 10,000-tonne-per-annum Silumina Anodes PFS.

“Due to the attractive economics of the study, a decision has been made by the AIG board to immediately progress to a definitive feasibility study (DFS) for the project. AIG has already purchased land in Germany suitable for the project, and the plan is for the AIG team in Saxony to immediately commence TM DFS work. We believe that the production of Silumina Anodes materials could be a game changing technology for the lithium-ion battery industry.”

The 900 megawatt (MW) Nant de Drance pumped storage power plant in Valais, Switzerland, came online in July after 14 years of challenging construction and testing. The gigantic “water battery” is capable of storing enough hydroelectric energy to power as many as 900,000 homes.

Gigantic Swiss ‘water battery’

The Nant de Drance “water battery” has a storage capacity of 20 million kWh of electricity. It will help stabilize Switzerland’s and Europe’s electrical grids by both reducing the chances of a grid overload when demand is high, and providing more power when it’s needed.

It took up to 650 construction workers working on the site at once, and around 60 companies working together to complete the project.

Six underground turbines are located 600 meters (1,968 feet) underground in a cavern between the Emosson and Vieux Emosson reservoirs in Valais, southern Switzerland.

Emosson, the lower reservoir, is the second-largest reservoir in Switzerland, and its 180-meter-high (590-feet-high) dam is the fifth tallest in the country.

The upper reservoir of Vieux Emosson holds 25 million cubic meters of water, which represents a storage capacity of 20 million kWh. It was raised by 21.5 m (70.5 feet) in order to double its capacity.

Each underground turbine has a capacity of 150 MW. The turbines can switch from pumping at full power to turbining at full power in less than five minutes, and it takes them less than 10 minutes to switch from turbine mode to pump mode. Three hundred sixty cubic meters of water per second passes through the turbines.

When there’s too much electricity in the grid, water is pumped from the lower reservoir to the higher reservoir, and the surplus energy is stored in the upper reservoir.

When power is needed, water flows from the upper reservoir and through the six underground turbines into the lower reservoir in order to generate electricity.

Global battery and minerals supply chains need to expand ten-fold to meet projected critical minerals needs by 2030, a report published by the International Energy Agency (IEA) has found.

The report concludes the industry needs to build 50 more lithium mines, 60 more nickel mines and 17 more cobalt mines by 2030 to meet global net carbon emissions goals.

Pressure on the supply of critical materials will continue to mount as road transport electrification expands to meet net-zero ambitions. According to the IEA, demand for electric vehicle (EV) batteries will increase from around 340 GWh today to over 3500 GWh by 2030.

“Additional investments are needed in the short-term, particularly in mining, where lead times are much longer than for other parts of the supply chain. In some cases requiring more than a decade from initial feasibility studies to production, and then several more years to reach nominal production capacity,” the report reads.

The projected mineral supply until the end of the 2020s is in line with the demand for EV batteries in the ‘stated policies scenario’ of the IEA’s world energy model. But the supply of some minerals, such as lithium, would need to rise by up to one-third by 2030 to satisfy the pledges and announcements for EV batteries in the ‘announced pledges scenario (APS) of the same energy model.

“For example, demand for lithium – the commodity with the largest projected demand-supply gap – is projected to increase sixfold to 500 kilotonnes by 2030 in the APS, requiring the equivalent of 50 new average-sized mines,” according to the report.

By 2030, nickel is facing the largest absolute demand increase as high-nickel chemistries are the current dominant cathode for EVs and are expected to remain so.

For cobalt, the opposite is true as battery makers continue to thrift to lower cobalt content chemistries (and even potentially cobalt-free chemistries by 2030) to reduce costs and due to environmental, social and governance (ESG) concerns.

Despite the trend, the report cautions that the surge in global demand for EV batteries still increases total cobalt demand this decade.

The IEA believes that to meet the projected demand in 2030 in the Stated Policies Scenario, 41 nickel and 11 additional cobalt mines are needed – a significant scaling up of the current project pipeline.

“For the Announced Pledges Scenario, 60 nickel and 17 cobalt new mines are required in 2030, (assuming average annual mine production capacity of 38,000 tonnes for nickel and 7,000 tonnes for cobalt).”

After an extractable resource is identified through exploration, the IEA says it can take four to more than 20 years for a mine to begin commercial production.

Coupled with this critical need for new mines is that mine development timelines have telescoped to up to 16 years to undertake the necessary feasibility studies, and engineering and construction work. In addition to the time required to begin commercial production, mines often require around ten years before they reach nameplate production capacity.

The IEA says upstream mineral extraction can cause significant bottlenecks unless adequate investments are delivered well in advance. “It appears that EV battery metals demand in the Stated Policies Scenario will likely be met for all metals up to 2025 if announced new supply comes online as scheduled.”

It would also not help if midstream processing didn’t keep up with rapidly expanding supplies. “Also, in order to translate this into EV deployment, tens of cathode and anode plants, gigafactories and EV production plants are required,” according to the report.

Innovative approaches

The IEA suggests innovative new extraction and processing technologies such as direct lithium extraction (DLE), high-pressure acid leaching (HPAL), and re-mining from mining waste could go a long way in bridging the gaping emerging supply gaps.

“Direct lithium extraction can increase production from existing mines. It bypasses the time-intensive need to evaporate the unconcentrated brine water and chemical removal of impurities,” the EIA says.

“As well as offering cost and lead time advantages, DLE has sustainability advantages and widens the pool of economically extractable lithium supply.”

However, the technology is not yet economically proven and is yet to be applied commercially in the field.

HPAL offers a solution for increased nickel production. The process uses acid separation under high temperature and pressure to produce nickel at Class 1 grade for battery applications using laterite resources.

However, the technology is not a panacea. “Capital costs for HPAL projects typically are double that of conventional smelters for oxide ore and take about four to five years to reach capacity,” according to the IEA.

“There are also concerns with the environmental impact of HPAL as it often uses coal or oil-fired boilers for heat, thus emitting up to three times more greenhouse-gas emissions than production from sulphide deposits.”

The IEA also highlighted the mixed hydroxide precipitate (MHP) process, an intermediate product produced from laterite that can be refined into nickel and cobalt sulphates needed for batteries at a low cost.

MHP can also be processed into nickel and cobalt products from selective acid leaching, a process with a lower environmental footprint.

New, easily fabricated, high performance carbon microlattice electrodes could soon be used to make cheaper batteries powered by readily available sodium ions. The approach was published by Tohoku University researchers and colleagues in the journal Small.

Lithium ion batteries are used in a wide range of applications, from smartphones to electric cars, due to their high performance and ability to store large amounts of energy. However, manufacturing these batteries is costly, the metal’s reserves are quickly getting depleted, and its extraction can be harmful to the environment. Scientists want to reduce battery manufacturing costs and find a way to unlock the potential of the more widely available sodium ions.

Tohoku University materials scientist Akira Kudo, Ph.D. student at University of California Los Angeles Yuto Katsuyama and colleagues are looking at ways to achieve high performance, low cost batteries by increasing the loaded amount of active materials used to make a battery into a single battery cell. This would reduce the inactive materials that are used for binding multiple cells together. However, this requires the fabrication of thicker electrodes, which would restrict ion movement—and thus that of electric charge—within the battery.

Kudo and his team have addressed this by developing an approach that fabricates micro-architected, high performing negatively charged (anode) electrodes.

The approach involves using 3D stereolithography to print microlattice structures made from resin. The microlattices are then shrunk by carbonizing them via a process called pyrolysis. The resulting hard carbon anodes were found to allow fast transportation of energy-generating ions. Also, as the team made the lattice structure finer, its performance improved. As 3D printers gain increasing resolution, sodium ion batteries could eventually outperform lithium ion ones, says Kudo.

The team next aims to use this same approach to make positively charged (cathode) electrodes. The ultimate goal is to use these finely architected electrodes for making high-performing, cost-effective sodium ion batteries.