Battery Metals

Chilean copper export revenue dropped 2.3% in February while imports to the Latin nation dropped 18.1%, the central bank said on Friday, as the world´s top copper producer struggled with weak demand from its main buyer China and domestic unrest.

Chile posted a trade balance of $821 million in February, the bank said. Total exports were down 6.6% to $5.134bn, while imports dropped 18.1% to $4.313 billion

Copper exports were valued at $2.484 billion. China is the world’s top copper consumer, and Chile is the red metal’s top producer.

When electric cars go mainstream, the industry should be ready to recycle their batteries.
Three companies, Fortum, BASF, and Nornickel (nickel refinery) have signed a letter of intent to plan an electric car battery recycling cluster in Harjavalta, Finland.

The idea is to develop a successful “closed loop” cycle to re-use the critical metals (like cobalt and nickel) present in used lithium-ion batteries.

The end-of-life battery modules would be dismantled to extract valuable metals needed to produce new cathode active materials. BASF plans to launch a battery materials precursor plant in Harjavalta, Finland as well as in Schwarzheide, Germany.

“Using metals from recycled batteries to produce battery materials offers significant CO2 reduction in the production of electric vehicles. Additional CO2 reduction can be achieved by using electricity from renewable sources in Finland for the recycling process.”

“The parties aim to foster the production and use of responsibly produced recycled raw materials in the battery market.”

Fortum is promising that the new hydrometallurgical technology, developed by Finnish company Crisolteq (acquired by Fortum) allows increasing the recovery rate of valuable materials in lithium-ion batteries from 50% to over 80%.

Tero Holländer, Head of Business Development, Fortum Recycling and Waste said:

“By recycling valuable metals in lithium-ion batteries we reduce the environmental impact of electric car batteries by complementing the supply of cobalt, nickel and other critical metals from primary sources. Through our previous acquisition of a Finnish growth company Crisolteq, an expert in low CO2 hydrometallurgical processing, we are very proud that Fortum is now able to increase the recovery rate of valuable materials in lithium-ion batteries from 50% to over 80%”.

Tim Ingle, Vice President, Precious Metals Refining, Chemicals & Battery Recycling, at BASF said:

“The combination of battery materials production and recycling enables the circular economy by closing the loop. To drive electrification, we are focused on bringing solutions for high energy density cathode active materials and high efficiency lithium extraction for battery recycling.”

Joni Hautojärvi, Managing Director, Nornickel Harjavalta said:

“A modern recycling unit next to Nornickel Harjavalta would further strengthen its position as one of the most sustainable nickel refineries in the world. This setup is ideal for sustainable processing of two of the main metals used in Li-ion batteries. Development of recycling solutions will not only support Nornickel’s strategy of further lowering its CO2 footprint and improving sustainability, but it is also essential to enable the industry to meet the growing demand of critical metals in the electric vehicle sector,”.

Automobile battery manufacturers are staring at a shortage of raw materials as unscrupulous traders illegally export used batteries to neighbouring countries. Battery manufacturers use Lead extracted from used batteries as the raw materials, and with supplies dwindling, they face a bleak future. Associated Battery Manufacturers Managing Director Guy Jack said last week that if not checked, the smuggling would stifle the sector and render many workers jobless.The manufacturers now want surveillance intensified along entry border points to stop traders from smuggling scrap batteries to Uganda and Tanzania.

Jack said his firm has been collecting an average of 1,600 tonnes of used lead-acid batteries monthly and now stares at a shortage. “Our collections were within the margin the Kenyan market can collect and recycle. However, supplies started dwindling from August 2019 to date with the supply going to as low as 900 tonnes of used batteries in December 2019,” he noted.He said Kenya is losing about 600 tonnes a month through illegal exports. “The used lead-acid batteries are finding their way to Uganda and Tanzania through porous borders where lead recovered is exported to the Far East for the manufacture of automotive and solar batteries,” he said.Industry players want Industrialisation Cabinet Secretary Betty Maina to implement the Scrap Metal Law enacted in 2015 to the letter. 

Anglo American Platinum (JSE: AMS), also known as Amplats, has temporarily shut down its Anglo Converter Plant, declared force majeure and cut its 2020 output.

The South African miner, the world’s top platinum producer, now expects to churn out between 3.3 and 3.8 million ounces of platinum group metals, 900,000 ounces short of its previous guidance of between 4.2 and 4.7 million ounces.

The company’s ACP phase A converter plant at the Waterval smelter complex in Rustenburg was damaged after an explosion on February 10. Amplats then started its second converter plant, which continued to have inexplicable water presence, a dangerous situation when working with metals at very high temperatures.

“This poses a high risk of explosion and the company has determined that it has no other option but to temporarily shut down the phase B unit, to ensure the safety of all employees, and avoid a catastrophic event,” it said in the statement.

Amplats expects the repair works on the phase B unit to take about 80 days.

As a result of the temporary closure, the miner has had to declare force majeure to customers, suppliers of third-party purchase of concentrate and providers of tolling material.

The company, majority owned by Anglo American (LON: AAL), noted that mine production will continue as usual, while smelting of concentrate will be done at one of the four complexes it owns.

Amplats said that output from its mines, as well as third party material, will not be able to be converted to refined production while the plant is undergoing repairs.

The company may need about two years to clear the metal inventory build-up as a result of the shutdown, chief executive officer, Chris Griffith, said on a conference call.

“Our first pass analysis is that group [earnings before interest, tax, depreciation and amortization] could decline by 15%, before allowing for any potential price increases as a result of the reduced supply,” Edward Sterck, analyst at BMO Capital Markets, said in a note to investors.

“However, PGM prices are running well above our base case forecasts and it seems likely that production cuts of these magnitudes are likely to stimulate further positive price responses,” Sterck wrote.

The news comes at time of global shortages of palladium and rhodium, used in catalytic converters attached to vehicle exhausts to reduce harmful engine emissions.

Tougher environmental regulations are forcing auto makers to use more of those commodities, which are by-products of platinum and nickel mining. This makes it difficult for companies to quickly increase production.

The shutdown will also affect other producers, including Sibanye Stillwater and African Rainbow Minerals, which sent some metal to Amplats.

The demand outlook for palladium in the gasoline engine-based automotive industry remains strong amid electric vehicle production and the possibility of palladium-to-platinum substitution in vehicle autocatalysts, Grid Metals CEO Robin Dunbar said Friday.

“The current deficit in the palladium market is about 1 million oz,” Dunbar said during a webcast presentation to investors, adding that palladium demand has outpaced physical supply. Palladium is superior to platinum for use in gasoline engine autocatalysts, which prevents the metal from being immediately replaceable, he added.

Palladium is a primary metal used in gasoline engine auto catalysts to lower emissions, but platinum has been used in diesel engines for the same purpose. Stricter emissions standards in China and the EU in recent years have raised demand for more efficient gasoline engines and palladium-based autocatalysts.

“Platinum is sitting around $950/oz whereas palladium is around $2,400/oz, so the big thing that people are potentially worried about is substitution, but palladium has better qualities,” he said. “It works at higher temperatures, which is important, and the risk of substitution is fairly low. There could be some risk to palladium from substitution by platinum, but that takes time, and the market really hasn’t seen that yet.”

Dunbar said palladium demand in the general automotive industry was also insulated from trends in the EV market.

“Of course, the switch to EVs is definitely happening, and that is going to occur over the next few years, but I don’t think the internal combustion engine is going to disappear anytime soon,” Dunbar said. “One aspect that many people often don’t realize is that the full and mid-hybrids use an excess amount of palladium because the emission standards have to kick in when the engine is cold and palladium is good at that as well.”

Grid Metals is a Toronto-based exploration-phase junior mining company developing copper, nickel and palladium projects in Canada.

Nickel is “key” for EV batteries

Demand for nickel may get the biggest boost as EV production continues to grow globally, according to Mark Frohnmayer, CEO of EV producer Arcimoto.

“One of the things that is worth mentioning is that nickel is really the key on the battery side for electric vehicles,” said Frohnmayer, who spoke at Grid’s investor meeting. The push to replace cobalt with nickel in EV battery electrodes positions nickel as “the ultimate hedge” in the battery market, he said.

If adoption rates of EVs come anywhere near the consensus forecast, they are going to need a lot more nickel, according to Dunbar.

“And it’s going to be a real stretch to find the amount of nickel globally that will be required,” he said. “That will mean that the prices are going to be higher.”

Nickel and rechargeable battery demand will continue to increase as EV technology becomes more economically competitive with gas engine vehicles, Frohnmayer said.

“We are now at a point in the battery production world where within a couple of years, electric vehicles are going to be at a cost parity with gas-powered vehicles, and that is going to be a major inflection point in the demand globally for batteries,” he said. “Once that cost parity point is hit, the demand for the resources that go into the battery is going to outstrip the supply that the marketplace currently has, and the rate of production that the marketplace currently has.”

Private equity fund Blackstone Energy Partners has bought its way into the commercial and industrial energy storage market by acquiring Toronto-based NRStor C&I.

The deal, announced Wednesday, gives Blackstone a portfolio of 200 megawatt-hours of customer-sited storage in operation, under construction or under contract. It marks a particular vote of confidence in the Ontario market, which has become one of the most dynamic regions in North America for large behind-the-meter storage.

A provincial demand charge known as the Global Adjustment charge provides a hefty price signal for large industrial facilities to cut their demand during system peak hours throughout the year. This rule has precipitated some of the largest behind-the-meter battery installations in the continent, with the record held by two 10 megawatt/20 megawatt-hour systems by Convergent Energy + Power.

That market has stimulated growth as the commercial demand charge management business model faced headwinds in the U.S.. After several years of development in the subsidized California market, commercial storage has had trouble expanding into other states. Many of the venture-backed pioneers of the business model have shifted gears in the last year or two, to focus on software, solar-plus-storage, or larger front-of-meter battery development.

Part of the challenge was the time and money required to sign up businesses for a relatively newfangled service, and to carry out the permitting and construction. Storage providers typically offer zero-money-down service agreements rather than selling systems outright. That means the storage provider must find capital or a project finance partner to pay for the systems.

In its own words, “NRStor C&I provides its services under a turn-key build, own, and operate business model where no capital outlay or operational expertise is required from the customer.”

Given that model, NRStor C&I stands to benefit from cheap and abundant capital. That’s what it found in Blackstone Energy Partners, which has allocated $16 billion in energy investments globally.

That’s a different level of wealth compared to NRStor C&I’s previous backer. After splitting off from utility-scale storage developer NRStor, the C&I division won investment from Canadian private equity firm Fengate, which manages $4 billion. Fengate and co-investor Lake Bridge Capital had been overseeing the investment for LiUNA Pension Fund of Central and Eastern Canada.

The deal provides NRStor with “access to capital, credibility, expansion to new geographies and market segments, as well as expediting our growth plans,” CEO Moe Hajabed told Greentech Media in an email Friday.

That growth includes expansion into utility-scale development across North America, though Hajabed declined to reveal much more about what that will entail.

Access to ample cash on the balance sheet allows storage developers to move faster and bid more competitively than companies that have to raise money project-by-project or share a cut with project finance investors. This same logic fueled a similar transaction last year, when private equity firm Energy Capital Partners bought Convergent, providing several hundred million dollars for the developer to self-finance and own industrial storage projects.