Lithium News

Amazon announced two new initiatives today that are aimed at reducing its environmental impact. The first is a $10 million investment in the Closed Loop Fund, an effort to pool corporate resources to help the US improve its municipal recycling programs. The other is a solar energy project in the United Kingdom that will see Amazon install 20 megawatts worth of solar panels to help power fulfillment centers across the region. Amazon also signed a deal saying it will purchase enough green energy certificates to ensure 100 percent of all buildings in the UK are offset by renewable sources like solar and wind.

It makes sense why, at least domestically, Amazon would be focusing its efforts on recycling: the company’s largest retail sector is North America, particularly the US, and it ships a massive amount of cardboard across the country every day. With the Closed Loop Fund, Amazon wants to contribute to the financing of recycling infrastructures for cities. The company notes in its press release that nearly half of all Americans do not have access to curbside recycling pickup, resulting in countless tons of cardboard and other reusable material getting thrown in the trash and inevitably filling up landfills.

“This investment will help build the local capabilities needed to make it easier for our customers and their communities to recycle and to increase the amount of material recycled across the country,” Dave Clark, Amazon’s senior vice president of Worldwide Operations, said in a statement. “We are investing in Closed Loop Fund’s work because we think everyone should have access to easy, convenient curbside recycling. The more we are all able to recycle, the more we can reduce our collective energy, carbon, and water footprint.”

In London, which is a European fulfillment hub for getting packages shipped to the rest of the UK, Amazon will work over the course of the next 18 months on deploying rooftop solar panel systems. The company says it will generate the equivalent of 4,500 UK homes in electricity from solar energy, and in the process, it says it will reduce its carbon footprint by 6,000 metric tons of CO2 per year.

While these initiatives are needed from a company as large as Amazon, they lag far behind efforts from Apple, Google, Facebook, and Microsoft. The other four members of the Big Five have, over the course of the last decade, all been working toward a 100 percent renewable commitment, which involves making global operations carbon neutral through investments in reviewable energy and the purchasing of green energy certificates to offset grid usage.

Both Apple and Google achieved that earlier this year. Facebook pledges that it will be 100 percent renewable by 2020, thanks in large part to its building and maintaining of custom data centers, while Microsoft has been carbon neutral for years now. Other big tech companies, like Samsung and Sony, have followed in those footsteps with green energy works and renewable commitments.

Amazon, however, has been criticized by Greenpeace for its lack of publicly available data on energy use, and the company has clearly prioritized fulfillment and data center expansion over a carbon neutral footprint. Amazon’s AWS cloud computing division has a “long-term commitment to achieve 100 percent renewable energy usage for our global infrastructure,” but the company is only 50 percent of the way there as of January 2018.

With regard to Amazon’s retail business, there is clear progress being made, particularly around the company’s Frustration-Free Packaging program that incentivizes retailers to reduce the amount of unnecessary cardboard and plastic that goes into product packaging, which also allows Amazon to ship more products in a single box. The company says the program has “eliminated 244,000 tons of packaging material to date” and slimmed down the numbrt of shipping boxes mailed out by 500 million units.

Understandably, Amazon is in the game of shipping, logistics, and retail, which is not quite the same as producing software or running search engines and social networks. So it would have a much bigger obstacle ahead of it in the quest to become 100 percent carbon neutral, although the company has yet to publicly commit to such a mission for its entire business and not just its cloud division.

KYMCO, the largest scooter manufacturer in Taiwan, may have developed the single swappable battery standard that we’ve all been waiting for. KYMCO’s electric scooters are powered by the company’s modular and removable Ionex batteries.

KYMCO developed the batteries with the goal of creating a standard battery platform that other companies could design electric vehicles around. Now they’ve declared their first publicly announced partnership that will see their batteries powering electric scooters built by another manufacturer.

Ionex batteries to power 22Motor’s Flow electric scooter

In a joint statement today, KYMCO and 22Motors announced plans to offer a redesigned version of 22Motor’s Flow electric scooter. The new scooter will incorporate KYMCO’s Ionex batteries.

The two companies created an equal partnership to leverage both of their strengths.

While KYMCO does have their own electric scooter line that uses the Ionex batteries, they are also seeking to spread components of their platform, including the batteries. To achieve this, the company unveiled KYMCO Commercial two weeks ago at the Paris Motor Show.

KYMCO Commercial is a complete turnkey solution that offers electric scooters, swappable Ionex batteries, Ionex battery charging and swap stations, and software/apps for managing fleets of electric scooters in commercial applications, such as scooter sharing programs and delivery scooters.

Just two weeks after unveiling Ionex Commercial, 22Motors has become the first publicly announced company to begin incorporating the swappable Ionex batteries into their vehicles.

22Motors’ Flow scooter was unveiled earlier this year, where it originally came with its own removable battery system. The Flow’s original batteries were sufficient for 50 mi (80 km) of range on a single battery, or twice that much with two batteries. Now that the company is shifting towards KYMCO’s Ionex batteries, they’ll be able to take advantage of KYMCO’s Ionex charging stations.

The Flow scooter will still be able to support up to two Ionex batteries at once. However, 22Motors has not indicated if the switch to Ionex batteries will have any effect on the range of the Flow scooter.

Currently, Flow scooters are only available in India and are priced at around $1,040, making them competitive with gas-powered scooters. 22Motors has stated that the price of the Flow scooter with Ionex batteries should not change.

Ionex battery charging as a service

The Flow scooters will be sold with two Ionex batteries as well as a home charger. This allows riders to park their scooter outside and carry in the two batteries for charging.

Additionally, 22Motors will provide Ionex fast charging stations where riders can charge their batteries for a small fee. Fast charging can refill the batteries in one hour.

Also, many riders will be able to charge for shorter periods to gain enough charge to reach their next destination. At that point, they can continue to slow charge with a wall charger.

It doesn’t appear that 22Motors plans to offer a battery exchange service like Gogoro does for their electric scooters in Taiwan. However, since the KYMCO Commercial system supports this, it could be just a matter of time.

The Ionex batteries will be imported at first. However, the companies indicated that future Ionex batteries may be produced locally in India if demand is sufficiently strong.

A battery company that started eight years ago with a group of UND researchers is one step closer to building its own factory north of Gateway Drive in Grand Forks.

The company Clean Republic produces lithium ion batteries for electric bikes. Since 2010, when the company began, Clean Republic has expanded to include a facility in Seattle. It still manufactures batteries at a warehouse in Grand Forks.

“They’ve gotten better with it and they’ve iterated a couple new product lines,” said Business Development Manager Brandon Baumbach of the Grand Forks Region Economic Development Corp. Baumbach said his group supports the company’s mission to build a factory here in town for the “new wealth” it could bring to the Grand Forks community.

It’s still too early for Baumbach and others to tell how many people will work at the factory and how much money it will bring into the community.

On Monday night, the Grand Forks City Council agreed to replat a portion of land on North 39th Street, where Clean Republic has indicated it is interested in building its factory. The next step, Baumbach said, is offering Clean Republic an investment incentive.

“Because the sooner we get a business to invest in our community, the more likely they are to stay and grow here,” Baumbach said.

If the company buys that property and wishes to begin construction, City Planner Andrea Edwardson, who has also been working with Clean Republic for the last couple of months, said it will have to submit designs to her department.

“It would just be to make sure everything they’re doing meets code from here on out,” Edwardson said.

This next process of approval will take anywhere from one to two months, Edwardson said, depending on how fast the company wishes to proceed.

The factory will be near two other facilities currently under construction—one is a landscaping company, and the other is the Red River Biorefinery.

Founded in 2010, Clean Republic makes kits to convert bicycles into electric bikes, according a UND blog post from this year. The founders have recently been researching the use of a byproduct of North Dakota coal to create a more reliable rechargeable battery.

“It’s the mission of UND to commercialize some of the research it’s done,” Baumbach said. He added work from Clean Republic and the UND Institute for Energy Studies shows just that.

Clean Republic representatives were unable to respond to a request for immediate comment Tuesday.

The automotive industry is on the verge of an electric revolution. The International Energy Agency has predicted the number of electric vehicles on the world’s roads will triple to hit 13 million by the end of the decade – and by 2030 that number could soar to 125 million.

Meanwhile, the rise of renewable energy generation has boosted demand for battery storage, which can balance intermittent power from green energy sources. The global energy storage market is expected to grow to more than 300GWh between 2016 and 2030, according to Bloomberg New Energy Finance (BNEF).

These new industries are powering demand for batteries, which has thrust a number of little-known metals into the spotlight. This has led to the price of lithium – a key component in lithium-ion batteries – doubling between 2016 and 2018. Meanwhile, the price of cobalt – a by-product of copper or nickel mining that is used in battery cathodes – has more than tripled since January 2016.

The surge in the value of these crucial components could be reaching its limit, however. In fact, as cobalt prices already start to drift lower and lithium stabilises, some analysts have suggested that the metals are on the brink of a crash.

Supply and demand

The market for lithium-ion batteries is growing rapidly. Used in everything from iPhones to electric vehicles, the power units are made up of a mix of metals, such as lithium, cobalt, nickel, manganese and graphite. The lithium industry is projected to grow from 100GWh of annual production in 2017 to nearly 800GWh in 2027, according to Cairn Energy Research Advisors.

As the chatter around electric vehicles evolved from speculations to tangible predictions, it has become clear that global lithium supplies are lacking. Lithium can generally be produced from one of two sources: spodumene hard rock, or brine. Producing lithium through brine in Central and South America is a “very, very simple operation”, and it is also relatively cheap, according to James Mills, a mining analyst at SP Angel. The process is time-consuming, however, taking between 12 and 18 months.

While the market waits for those supplies to come online, the gap is being filled with spodumene production in Australia. The country has seen a rapid move to extract these hard rocks, so much so that this year it overtook the ‘lithium triangle’ – Chile, Argentina and Bolivia – as the largest producer. This process is more expensive, however, and produces lower-grade lithium that must be shipped away, typically to China, to be upgraded into a battery-ready product. As a consequence of this, Mills said future supply is not expected to come from Australia, but from the large brine producers, like Chile-based SQM.

The deluge of investment into new projects is expected to meet demand forecasts for at least the next five to seven years, according to BNEF. However, in a recent report by Bank of America Merrill Lynch (BAML), analysts led by Head of Metals Research Michael Widmer predicted a glut of lithium on the market could cause the price of lithium to plunge by more than half to $10,000 a tonne by 2025. Producers are expected to add 815,000 tonnes of lithium to the market, surpassing a 460,000-tonne increase in demand.

Widmer told World Finance that, because supplies are ramping up gradually, prices will not fall every quarter – instead, over the next year or two they will start to “normalise and come a bit lower”. But to balance the market beyond 2020, Widmer opined that 50 percent of mines would need to be idle.

Panellists at a recent mining conference hosted by S&P Global Market Intelligence added that a major correction could happen as soon as 2021, due to lower-than-expected demand for lithium. Arnab Sen, Chief Investment Officer at investment firm Harbour Capital Management, said in the next three years, demand would “surprise the market to the downside” compared with current expectations. Paired with the pipeline of new lithium supply coming online, he said a price “reset” was on the horizon.

However, analysts at Goldman Sachs said the fears – and the resulting sell-off in lithium producers’ share prices – have been “overdone”. Analysts at the bank said it will be more difficult to develop new lithium mines than many people think, and at the same time demand will rise fourfold by 2025.

Despite the increase in new projects around the world, Goldman Sachs wrote: “We expect lithium markets to remain sufficiently tight to handsomely reward incumbent producers.” The share prices of US producers Albemarle and FMC in particular could rise by a further 34 percent and 30 percent respectively, the analysts added.

New battery chemistry

There are two big uncertainties for the future of battery metals, according to Widmer. The first is how quickly electric vehicles will penetrate the automobile market. This relies on improving consumer appeal by creating convenient re-charging infrastructure and advancing battery technology to boost vehicle range. But Widmer implied the eventual uptake in electric vehicles is inevitable: “In the end, it’s still a market where [electric vehicles] will ultimately become more important.”

The remaining uncertainty is the chemical make-up of electric vehicle batteries. Cobalt is an important element in a lithium-ion battery, as it essentially extends the cell’s life cycle. Although it can be replaced by nickel – which is more widely available and cheaper – this could lead to a fire hazard as cobalt keeps the cell from overheating and combusting.

Despite this, battery makers are increasingly looking to distance themselves from the costly metal after prices surged based on fears that a supply shortage would come as soon as the early 2020s.

Elon Musk, the founder of Tesla, famously claimed he would reduce the amount of cobalt in his electric vehicles to “almost nothing” by increasing the amount of nickel. Although Tesla does not publicise the composition of its batteries, it reportedly uses a lithium-ion battery with a cathode primarily composed of nickel, cobalt and aluminium. According to S&P, these batteries are typically made of 85 percent nickel, 10 percent cobalt and five percent aluminium.

Panasonic, which makes the batteries used by Tesla, added in May that it plans to begin developing electric vehicle batteries that use no cobalt. Kenji Tamura, who is in charge of Panasonic’s automotive battery business, told analysts: “We are aiming to achieve zero usage in the near future, and development is underway.”

It is expected that cobalt-free batteries will take years to develop, but Tesla and Panasonic have already reduced their cobalt usage by about 60 percent. Some analysts fear that reducing it further could create engineering problems.

But the threat could still impact long-term cobalt prices, Widmer said: “If you take a little bit of supply growth coming through together with engineering cobalt out of the market, you end up in an environment where cobalt looks to be oversupplied [in] the coming years.”

Cobalt prices have already started to fall in the last few months, and according to Wood Mackenzie, supply will exceed demand by 652 tons this year. Next year, that gap will widen to 20,842 tons, which could cause prices to drop 23 percent from this year’s forecast to an average of $62,502 a ton. By 2022, the energy consultancy expects the price of cobalt to average just $44,585 a ton.

Ethical dilemma

A high price is not the only factor pushing battery producers and car manufacturers away from cobalt – geographical and ethical issues are also on the table. Global cobalt reserves are largely concentrated in the Democratic Republic of the Congo (DRC). The central African nation accounts for more than 60 percent of the world’s mined output of cobalt, which, according to Widmer, brings “a whole load of problems with it”.

The DRC has a turbulent relationship with the mining industry, having increased taxes and royalties on cobalt in January. The government then declared cobalt a “strategic mineral” just a few months later, meaning it can raise royalties paid to the government from cobalt mining up to 10 percent from a previous cap of two percent.

Those looking to source their cobalt from outside the DRC will struggle. The world’s reserves and resources outside the country are geographically diverse, with no region in a position to replace production if supply in the DRC is disrupted.

What’s more, the DRC has also faced criticism for using child labour in its mines. Approximately 20 percent of cobalt in the DRC is mined by hand, and Amnesty International has said children as young as seven are among those working in the narrow, man-made tunnels of these small mines. Last year, Amnesty accused major electronics and electric vehicle firms such as Apple, BMW and Tesla of not doing enough to stop human rights abuses entering their supply chains.

In addition, the London Metal Exchange (LME), the world’s largest metal bourse, is said to be strengthening its scrutiny of companies that source their cobalt from the DRC. According to the SP Angel 2017 Commodity Research Book: “The LME, Amnesty International and consumers of DRC exports are probing into responsible mining practices, and demanding increased transparency toward ethical supply.

“Restricted tolerances on the supply chain are aimed at reducing the demand on the 20 percent supply from artisanal mines, which are employing an estimated 40,000 child labourers.”

There are also some efforts to use blockchain technology to securely track cobalt from mine to manufacturer to give firms a guarantee that children did not mine the cobalt they use.

But with cobalt already down 20 percent from its all-time high and battery producers scrambling to find replacements, the metal may have a tough few years ahead. In the coming quarters, Widmer expects cobalt to fall back to the level where it started before the electric-vehicle-induced rally.

The forgotten metals

Lithium and cobalt have been the stars of the battery metals market because of their stunning price movements, but there are a number of other metals in the mix that are potentially more interesting.

“They’re called lithium-ion [batteries], and everyone just assumes they’re mainly lithium. They’re actually not,” Mills said. “There’s other metals in there which are very much undervalued, and their time is going to come.”

Graphite, for instance, makes up almost 50 percent of the mass of lithium-ion batteries, but Mills said this goes unappreciated: “The price is just starting to come up, and you’re going to be in a position where the growth in terms of demand is going to be huge and you don’t have enough graphite to support the market.” Research by market research firm MarketsandMarkets said the graphite industry is expected to be worth $29.05bn by 2022.

Nickel is another underrated battery metal, Widmer said, because for every gram of cobalt removed, the nickel content of the cathode must be increased. “And that’s exactly what has been happening,” he said, referring to moves by the likes of Tesla and Panasonic to eradicate cobalt.

However, over the past few years on the nickel market, a number of big mines run by giants like Norilsk Nickel, BHP Billiton, Glencore and Anglo American have burned through a lot of cash. Widmer explained: “They didn’t close their mines down, but they had to cross-subsidise a lot of those operations, and because of that we have seen virtually no growth [capital expenditure] going into the industry.

“So you’re now in an environment where the mining industry has stopped spending on operations at the same time as you’re actually seeing the demand increase coming through.”

Currently, nickel looks set to be one of the strongest metals fundamentally. According to Widmer, it is the raw material that BAML says gives the best exposure to the rising popularity of electric vehicles. “It looks very, very bullish,” he told World Finance. Prices have risen steadily, and as of July they were up about 40 percent over the previous year, even taking into account a sell-off due to various global trade disputes.

The case for many battery metals continues to look strong. Although there will be some oversupplies in the lithium market, its position as a key component of lithium-ion batteries means long-term demand will stay strong so long as demand for electric vehicles rises. Cobalt’s future, however, looks bleak.

Due to its concentration in a politically volatile country and the proliferation of child labour in the supply chain, many manufacturers have decided to engineer the metal out of their batteries. But until a transformational next-generation battery is developed, metals like graphite and nickel, which have yet to gain the same level of attention from investors, may be the ones to provide the most noteworthy price spikes in the months and years ahead.

Battery makers say they are getting closer to replacing lithium-ion batteries with solid state batteries, but one analyst predicts that’s at least five years from becoming a reality.

“We expect existing lithium-ion technologies to be the major area of growth in the market for at least the next five years,” Benchmark Mineral Intelligence analyst Andrew Miller told Stockhead.

Solid state technology is harder to engineer — but promises a lower-cost battery that is higher capacity, higher density, higher performance and quicker to charge.

Graphite miner Magnis Resources revealed earlier in October that its partner, battery maker C4V, had developed one of the world’s first solid state batteries.

The new battery, which was unveiled at a conference in New York, replaces more than 80 per cent of the usual liquid electrolyte with a solid electrolyte.

C4V’s battery also does not require cobalt, which is becoming harder to source and is an expensive component of batteries.

C4V reckons it could be producing prototypes for customers by as early as the second quarter of next year.

“Solid state appears the chosen successor of existing lithium-ion chemistries but how quickly this can be commercialised remains a major question,” Mr Miller said.

“It takes a long time for a new technology to overcome the hurdles of performance, cost, safety etc so we don’t expect to see solid state enter the market in a major way before around 2025.”

Mr Miller also expects lithium-ion batteries to continue to play a major role in stationary storage.

“The cost and performance advantages that are being created through this period of major investment will make lithium-ion a leading contender, despite not always being the most efficient technology for stationary applications,” he said.

“Other technologies haven’t gone through this period of commercialisation and market adoption so while they may be a better fit hypothetically, the supply chains and technologies still need to develop to challenge lithium-ion.

“For that reason you will see a lot more technologies used for residential and grid applications.”

Chile wants lithium traded on the LME

Meanwhile, Chile is pushing for lithium to be traded on the London Metals Exchange (LME) and Benchmark Minerals Intelligence is looking to help out with that.

The South American country is the world’s second largest lithium producer after Australia, which took the number one spot this year.

“The lithium industry needs to evolve before an exchange traded contract will be widely used,” Mr Miller explained.

“Today, the majority of global production is traded on term contracts, so a spot market needs to emerge before an LME contract would attract much liquidity.”

Mr Miller said for countries like Chile, the transparency this type of contract would bring would be beneficial as it would give them more information to base their policy decisions on.

But for the industry, there are still questions about how an LME contract would benefit them given the current nature of the market, he noted.

“This is why Benchmark is proposing to enter into a development partnership with the LME, to ensure the launch of a contract is useful to the market and to provide the necessary foundations for liquidity on the contract.”