Battery Metals

Portugal expects to launch a tender for lithium exploration licences next year, the new secretary of state for energy said on Tuesday, confirming the general outlines of a plan devised under his predecessor, although with a slight delay.

In September, Joao Galamba’s predecessor Jorge Seguro Sanches said he wanted to launch the tender before the end of 2018 as part of a plan to make Portugal Europe’s top supplier of the metal for electric car batteries and meet an expected surge in global demand for lithium.

Galamba, who took over less than two months ago after a wider government reshuffle, also told Reuters the government will look at commitments to invest in a local lithium processing unit as part of the tender process.

So far there are no facilities in Europe to refine lithium to battery-grade purity, and no large-scale battery production for cars, and the European Union is concerned that its carmakers will be over-reliant on imports from China.

“Portugal does not want to be a country that just drills holes in the ground and exports the ores,” Galamba said, explaining that 12 areas had been identified as likely to contain lithium-bearing minerals.

“So it is important to not multiply tenders, but have a single one … with various lots, that would allow to attract these types of projects to Portugal. We are counting on launching it during 2019,” he said. He said the idea was to have one lithium refinery for a viable scale.

Officials have said various international groups had expressed interest in exploring for lithium in Portugal, which is the world’s sixth-largest lithium producer, and Europe’s biggest. Its miners sell almost exclusively to the ceramics industry and only now are gearing up to produce the higher-grade lithium that is used in electric cars and electronics.

A government study last year put the potential investment in five of the most attractive lithium-bearing areas at 3.3 billion euros.

Eramet – The Lithium project is entering a new stage; Hervé Montégu appointed as Senior Vice President of Lithium Activities

Metals for tomorrow’s energy transition and mobility are central to Eramet’s strategy. Key metals include nickel and lithium. Lithium has a variety of applications, including energy storage (rechargeable li-ion batteries), and demand is expected to triple in the coming decade.

As of 1 January, 2019, Hervé Montégu is appointed Senior Vice President of Lithium Activities within the Eramet group.

Since November 2015, Hervé Montégu has been CEO of Comilog, the Group’s Gabonese subsidiary.

The new mission entrusted to Hervé Montégu is to develop this new activity. In particular, Eramet owns a lithium deposit of exceptional size in north-western Argentina, located at an altitude of 3,800 m in the province of Salta.

Eramet discovered the Centenario-Ratones deposit in 2012 and has held the mining rights since April 2014. It contains resources estimated at 9 million tonnes of lithium carbonate equivalent (LCE) and should enable increased industrial production of 24,000 tonnes of LCE a year, approximately 10% of the current market, for several decades.

The lithium project is now entering its final preparation phase. The completion of the technical and economic feasibility study is underway to specify the required investment, currently estimated at approximately €500 million for 24,000 tonnes. An investment decision is scheduled for the first half of 2019 for production to start at end-2021.

In addition to this project, Eramet is studying other development areas in lithium in Chile and Europe.

Commenting on this, Christel Bories, Eramet Chairman and CEO said: “The lithium project in Argentina is central to our strategy and I wish to give it every chance of success. Hervé Montégu has done a remarkable job at the helm of our Gabonese subsidiary. The Group’s Executive Committee therefore has every confidence in entrusting him with this new role. We are counting on Hervé to complete this mission with the highest level of operational excellence as well as the highest social and environmental standards.”

Private equity firm GSR Capital has contracted Overstock.com Inc.’s subsidiary tZERO Group Inc. to develop a smart contract token for a sale of cobalt, according to a press release published Dec. 17.

tZERO and Hong Kong-based GRS Capital’s partnership is focused on developing an ecosystem in Asia for tokenized commodity purchase contracts that would purportedly improve the supply chain process of rare metals. Additionally, the parties are looking to launch a security token platform in the region, following compliance with relevant regulatory requirements.

Per the release, the token will be used for a sale of cobalt, and is expected to launch in 2019. The “first-of-its-kind cobalt offering” will include recurring tranches of electric vehicle battery-grade cobalt, with up to $200 million of the material to be available for sale.

Patrick Byrne, the Overstock CEO and tZERO executive chairman, stated that “smart contract automation of these transactions will significantly reduce overall costs while effectively improving transparency in rare earth metals purchases.” However, in order to complete the project the companies are delaying a previously announced equity investment until the end of February, 2019.

In August, Overstock and tZERO signed term sheets with GRS Capital to invest up to $374.55 million in exchange for common equity in tZERO and common equity in Overstock.com. Apart from that, GSR Capital will reportedly purchase $30 million in tZERO Security Tokens from Overstock.

In a letter to GRS Capital stock holders released on Dec. 16, Overstock notes that GRS Capital has signed a retainer agreement with tZERO that guarantees the cobalt offering is not delayed by the extension of the GRS Capital investment.

In late November, Byrne announced plans to reportedly sell his e-commerce business to fully devote the firm to blockchain projects. As reported by WSJ, Overstock’s blockchain-focused subsidiary Medici Ventures is the cause of visible losses for the company amounting to $22 million in 2017 and $39 million in the first nine months of 2018.

So what do iPhones, the P20, laptops, smart watches and Tesla cars have in common? Why, batteries of course and more often than not these are lithium-ion batteries. Naturally those batteries require some form of lithium as a key ingredient and Zimbabwe is lucky to have decent lithium deposits that are commercially viable.

An Australian listed company called Propsect, which has been developing a lithium mine in Zimbabwe, has announced that about 100kg samples with a purity of 99.5% of battery-grade lithium carbonate were recently shipped to Australia from Zimbabwe. The samples were produced at Prospects’s nascent plant in Kwekwe using ore obtained from Prospect’s Arcadia mine which is in Goromonzi.

The purpose of the shipment is to look for potential buyers for the remaining 70% of Lithium carbonate that Prospect are going to produce. The remaining 30% will be bought by Sinomine ( a company from Shenzhen China) who have already made a commitment. Sinomine have also invested $10 million into Prospect and will pay $10 million in advance for the Lithium carbonate that is going to come out of Arcadia.

The Arcadia mine is relatively new. Prospect began preparatory digging and work in November. This was after a feasibility study confirmed that the mine was profitable. The mine has a forecasted 12 year life and it is expected to bring in about $2.93 billion in revenue ( we are talking about real USD here not bonds/zollars). This is expected to bring in profits (naturally by profit we mean Earnings Before Interest, Tax, Depreciation and Amortisation ) of $106 million a year.

A story of diamonds and platinum

One of the reasons why Zimbabwe still has balance of payment deficits is because our short sighted, corrupt and greedy leadership enters in deals with foreign companies where basic unrefined/barely refined ores are exported from within Zimbabwe resulting in them fetching low prices. This has happened with platinum for years and its one of the reasons why ordinary Zimbabweans hardly felt the positive effects of diamond exports.

This alone has been the chief reason for imbalances in trade between Zimbabwe (most African countries for that matter) and the so-called developed countries. Corrupt and selfish regimes in Africa enter into opaque deals with companies from the developed or BRICS countries who plunder raw-form resources at rock bottom prices only to turn back and sell refined components at very high prices.

It is nice to see refined shipments

Given these disheartening practices, it is heartening to see Prospects and the government take a stance where they use intermediate technologies to enhance the value of our exports. In fact according to Prospect, now that they have proven their ability to make lithium carbonate, they are now going to start the process to manufacture lithium hydroxide. Lithium hydroxide is in higher demand on the world market and fetches even higher prices that the carbonate version.

Hopefully this is not like one of those mega deals we only hear of on TV and in the State newspapers. Has anyone ever graduated from the diamond college? If so have these people begun polishing and cutting diamonds in the real world? Whatever happened to that Cypriot platinum deal?

According to a news release from the company, the U.S. patent examiner determined that American Manganese’s technology is “novel” and “inventive,” as it enables the recycling of valuable cathode metals—cobalt, nickel, manganese, aluminum and lithium—while also converting these materials back to fresh cathode materials for manufacture of new lithium-ion batteries. The “Notice of Allowance” is a formal notification indicating that the examination of the invention has been completed by the U.S. Patent and Trademark office and allowed for issuance as a patent.

“Allowance of this patent is a significant milestone for the company, as the invention is now secured as a key asset that can be exclusively capitalized,” says Larry W. Reaugh, CEO of American Manganese. “American Manganese recognized early on that significant growth in the electric vehicle market will eventually lead to supply strains in materials used to make lithium-ion batteries and that effective recycling of end-of-life lithium-ion batteries is a key aspect of achieving a sustainable circular economy.”

According to Bloomberg New Energy Finance reports, industry forecasts estimate that electric vehicle sales will increase over time. The report states that electric vehicle sales could increase from 1.1 million worldwide in 2017 to as many as 11 million in 2025.

American Manganese contracted Kemetco Research, Richmond, British Columbia, to start a research program to develop technology with the goal on capitalizing on the potential supply of metals used for manufacturing lithium-ion batteries, while creating a solution to the circular economy, the news release reports. Kemetco Research has been focused on developing American Manganese’s technology into an efficient recycling process, with plans to file continuing patent applications on work recently completed that complements the current technology.

Overstock.com’s tZERO subsidiary has been hired by private equity firm GSR Capital to develop a token for trading cobalt.

The engagement could lead to the tokenization of up to $200 million worth of this rare metal, which is used to make electric vehicle batteries, in 2019 alone, Overstock said Monday.

However, it has also delayed the closing of Hong Kong-based GSR’s separate, previously announced agreement to invest up to $404 million in Overstock and tZERO.

That transaction was set to close on December 15, but the day before, “GSR contacted us and asked for an extension to allow a key partner in the cobalt initiative from outside of China to participate in the deal,” Overstock CEO Patrick M. Byrne wrote in a letter to shareholders Monday.

Byrne was contrite about the delay, telling investors:

“Even though the partner in question is well known to us and will be a valuable part of our ecosystem, it was both frustrating to us, as it likely is to you, that the delay came at the eleventh hour.”

Nevertheless, he was bullish about the opportunity to tokenize the trading of cobalt, calling it “one of the most exciting initiatives on the blockchain today.”

Ecosystem in Asia

According to tZERO and GSR, the token will be compliant with regulatory requirements and will simplify identifying, purchasing and tracking the supply of cobalt. tZERO will provide its expertise to “build an ecosystem in Asia for tokenized commodity purchase contracts,” Overstock said in a separate press release.

“Smart contract automation of these transactions will significantly reduce overall costs while effectively improving transparency in rare earth metals purchases throughout the supply chain process” Byrne said in the release.

In the long term, Overstock and GSR said their collaboration could lead to the development of a security token trading platform like tZERO in Hong Kong. “GSR and our partner will be doing more than just cobalt tokenization, and we see further growth in our partnership with tZERO including consummating an investment directly by next quarter,” GSR Capital’s chairman and founder, Sonny Wu, said in the press release.

Cobalt trade has been a controversial subject over the last few years, as while the mineral powers innovative industries like electric car production, more than a half of its world supply comes from the Democratic Republic of Congo, infamous for using child labor in cobalt mines. China has been remarkably active buying cobalt producers and took a lot of blame for funding unsafe ways of production.

Blockchain has been seen by some as a possible cure for this: in April, British consultancy RCS Global launched a blockchain-based pilot to detect possible illegal activities at the mines and register it on the blockchain.

Overstock is planning to sell its flagship e-commerce business by February to raise cash for Medici Ventures, the umbrella for tZERO and the company’s other blockchain investments. tZERO is expected to launch early next year, with its own token as a primary trading asset.