Engineering & Mining Journal

SEP 2018

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2 E&MJ • SEPTEMBER 2018 FROM THE EDITOR The headlines relating to the demand for battery minerals seem to be everywhere these days. As this edition was going to press, Reuters reported that lithium and copper miners were competing for water supplies in the high desert that straddles the border between Chile and Argentina. Then there were the headlines relating to the declining cobalt prices, which have dropped from a recent high of $43/lb to less than $30/lb today. They said that signals the end to the battery minerals rush. That might be true for the spec- ulators, but not the mining business. Demand for minerals to support the anticipated electric vehicle (EV) explosion has not truly materialized yet. Manufacturers are only now lining up possible supply chains for lithium ion batteries (LIBs). As an example, LG Chem, a South Korean LIB supplier, recently increased its manufacturing plans to 90 gigawatt hours (GWh) of capacity in 2020 from the previous target of 70 GWh. Future use of LIBs in massive energy storage systems (ESS) will compound the demand. In June, Pacifi c Gas & Electric (PG&E) requested approval from the Cal- ifornia Public Utilities Commission for four energy storage projects totaling about 2,270 MWh. The commission authorized PG&E to solicit bids to replace three pow- er plants. PG&E selected offers for three ESS totaling 385.5 MW, 1,540 MWh. To add some perspective, this project would be three times the largest, which is Tesla's 100-MW, 129-MWh battery in Australia. Spurred by government subsidies, many countries, most notably China, are en- couraging the future use of EVs. The automotive industry's use of LIBs is on track to grow sevenfold to 650 GWh by 2025 from around 70 GWh in 2017, according to a recent report from Metal Bulletin. The battery mineral discussion includes cobalt, graphite, lithium carbonate, lithium hydroxide, manganese, nickel and spodumene. Right now, most of the attention seems to be focused on lithium carbonate equiv- alent (LCE) and cobalt supplies. Prices for these two metals have been dropping, and that's probably a good thing. Exceptionally high-metal prices usually motivate manufacturers to look at re- placement strategies. As the prices for raw materials fall, so does the cost of LIBs and ESS, which creates more demand for those minerals. It takes about seven to 10 years to bring a new greenfi eld mine online. That new battery mineral mine would start producing in 2025 if the project were launched tomorrow and the developers had the wind at their back during the permitting process. Doubling or tripling battery mineral production in this timeframe would be a tall order, but it has happened recently. In 2008, speculators drove the price of cobalt to $50/lb, anticipating the introduction of the smartphone. The prices subsequently cooled and cobalt was not engineered out of smartphone batteries. Cobalt demand has only increased since. It has remained the cathode mineral of choice for LIBs and the cathode represents about one-third of the manufacturing cost. The global cobalt supply/demand market has grown from 50,000 metric tons per year (mt/y) in 2008 to more than 100,000 mt/y in 2017. Supplies of LCE and cobalt are abundant. Cobalt production as a byproduct, however, is heavily infl uenced by the demand for copper and nickel. Despite all of the hype, the fundamentals for this market are extremely strong. To bring new sources of battery minerals to market, the prices will need to remain high enough to support economic extraction, but not so high as to discourage its use. The EV Era is Upon Us The headlines relating to the demand for battery minerals seem to be everywhere these days. As this edition was going to press, were competing for water supplies in the high desert that straddles the border between Chile and Argentina. Then there were the headlines relating to the declining cobalt prices, which have dropped from a recent high of $43/lb to less than $30/lb today. They said that signals the end to Steve Fiscor Publisher & Editor-in-Chief Steve Fiscor, Publisher & Editor-in-Chief sfi scor@mining-media.com Mining Media International, Inc. 11655 Central Parkway, Suite 306; Jacksonville, Florida 32224 USA Phone: +1.904.721.2925 / Fax: +1.904.721.2930 Editorial Publisher & Editor-in-Chief—Steve Fiscor, sfi scor@mining-media.com Associate Editor—Jennifer Jensen, jjensen@mining-media.com Technical Writer—Jesse Morton, jmorton@mining-media.com Contributing Editor—Russ Carter, rcarter@mining-media.com Latin American Editor—Oscar Martinez, omartinez@mining-media.com South African Editor—Gavin du Venage, gavinduvenage@gmail.com Graphic Designer—Tad Seabrook, tseabrook@mining-media.com Sales Midwest/Eastern U.S. & Canada, Sales—Victor Matteucci, vmatteucci@mining-media.com Western U.S., Canada & Australia, Sales—Frank Strazzulla, fstrazzulla@mining-media.com Scandinavia, U.K. & European Sales—Colm Barry, colm.barry@telia.com Germany, Austria & Switzerland Sales—Gerd Strasmann, info@strasmann-media.de Japan Sales—Masao Ishiguro, ma.ishiguro@w9.dion.ne.jp Production Manager—Dan Fitts, dfi tts@mining-media.com www.e-mj.com Engineering & Mining Journal, Volume 219, Issue 9, (ISSN 0095-8948) is published monthly by Mining Media International, Inc., 11655 Central Parkway, Suite 306, Jacksonville, FL 32224 (mining-media.com). Periodicals Postage paid at Jacksonville, FL, and additional mailing offi ces. Canada Post Publi- cations Mail Agreement No. 41450540. Canada return address: PO Box 2600, Mississauga ON L4T 0A8, Email: circulation@mining-media.com. Current and back issues and additional resources, including subscription request forms and an editorial calendar, are available at www.e-mj.com. SUBSCRIPTION RATES: Free and controlled circulation to qualifi ed subscrib- ers. Visit www.e-mj.com to subscribe. Non-qualifi ed persons may subscribe at the following rates: USA & Canada, 1 year, $90. Outside the USA & Can- ada, 1 year, $150. For subscriber services or to order single copies, contact E&MJ, c/o Stamats Data Management, 615 Fifth Street SE, Cedar Rapids IA 52401, 1-800-553-8878 ext. 5028 or email subscriptions@e-mj.com. ARCHIVES AND MICROFORM: This magazine is available for research and retrieval of selected archived articles from leading electronic databases and online search services, including Factiva, LexisNexis, and Proquest. For mi- croform availability, contact ProQuest at 800-521-0600 or +1.734.761.4700, or search the Serials in Microform listings at www.proquest.com. POSTMASTER: Send address changes to E&MJ, 11655 Central Parkway, Suite 306, Jacksonville, FL 32224-2659. REPRINTS: Mining Media International, Inc., 11655 Central Parkway, Suite 306, Jacksonville, FL 32224 USA; email: subscriptions@e-mj.com; phone: +1.904.721.2925, fax: +1.904.721.2930; www.mining-media.com. PHOTOCOPIES: Authorization to photocopy articles for internal corporate, personal, or instructional use may be obtained from the Copyright Clear- ance Center (CCC) at +1.978.750.8400. Obtain further information at copyright.com. EXECUTIVE OFFICE: Mining Media International, Inc., 11655 Central Park- way, Suite 306, Jacksonville, FL 32224 USA phone: +1.904.721.2925, fax: +1.904.721.2930, www.mining-media.com. COPYRIGHT 2018: Engineering & Mining Journal, incorporating World Mining Equipment, World Min- ing and Mining Equipment International. ALL RIGHTS RESERVED.

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