Thank you very much
@jaydee74. I nearly didn't listen to this, only because it's 41 minutes long, but am so glad I did. I expected it to be an enlightening overview of industry movements, and it is that, but imo much pertains specifically to our company too. I jotted down a few notes during my first listen, but ended up transcribing some worthwhile sections, playing it a second time. Highlights are parts I feel are particularly relevant to Lepidico. Hoping everyone takes time to listen, as Simon is persuasive. For any who haven't heard SImon speak before, his voice is calm and steady, but his words are powerful. He doesn't need to use fanfare, as the facts speak for themselves. The slides and graphics are excellent and clearly illustrate his points. It's from this presentation that
@RTFQ kindly shared a few slides a couple of weeks ago in our Lithium Related News thread. Simon's conclusions leave me feeling even more confident in my choice of investment. Here you go:
"We are very excited to hear his forecasting for the undeniable demand surge that we are all expecting in this square and that we are already seeing."
Outlining the battery supply chain:
The key raw materials...are key on the cathode and anode side because they are chemically refined speciality products. They're not just commodities. There's not just primary processing of these raw materials. There's a chemical step which requires know how. And that is a blocker, if you like, to getting new product into the market for the battery industry, for the electric vehicle industry.
From Simon's presentation at the G7 Summit in the UK:
The global battery arms race >>> building a lithium ion economy
- It's developing gigafactories alongside giga-mines. Every gigafactory is one lithium mine.... This is how we have to view it.
- The second is building it on time: It takes 7 years at best to build a lithium mine from scratch. It takes 24 to 36 months to build up a battery plant. That is your fundamental problem and challenge with the battery supply chain. So you can announce your EV. You can then announce you've got battery plants being built for them, but if you are not announcing new supply of lithium.... This hasn't been happening.... You have to really have assets, ownership all the way across the supply chain. This is what we're saying to OEMs, governments and the like.
- There are no major blockers to this. That's the upside. There's going to be 10 years of volatility and 10 years therefore of investment opportunity.... When prices rise in these niche industries, they don't go up by 10%, 20%. They snap. They double, they triple, they quadruple and so it's just going to be a 10 year period of volatility before this new blue print, this new base of this lithium ion economy, this electric vehicle energy storage revolution is built and so that really started end of November, and so we are just 8 months, 9 months into this.
So much lithium is going to be needed. This is the global battery arms race that I mentioned. We are now at 215 plants, an incredible amount of battery plants from, 3, in 2015. 3.8 TWh, but more to come, and especially more to come in the USA.
There are tiers of quality, so that is a blocker. (to bringing enough battery grade supply on line to meet the demand)
Last year $65B of capital was committed to building these plants. More money will be committed this year. It will probably be in excess of $100B committed on new battery plants.
Whenever an OEM announces a 30 GWh facility...just sketch out. When you sketch it out, it's roughly a mine's worth, per plant. So it's a challenge for, well, it's a challenge for everyone, but if I was the OEMs and the battery makers...alarm bells should be ringing.
I'm saying generationally important, but it's bigger than that. I remember speaking to, this is about 2 and a half years ago now, I was speaking at a world bank conference with some of the CEOs of the big mining companies, the big commodity guys, and I asked 2 of them separately if they'd seen this level of growth in other raw materials, ever? And both of them said no, independently, both said no.... but the level of demand is shocking.
Certainly if I was an OEM, I would be laser focussed on the Mid Stream, that cathode, anode and that chemical. If you've got the capacity there, you can make your batteries, 'cause pretty much I think the mining side will naturally sort itself out if the Mid Stream is there.
Then the other key thing is quality and that's what people don't talk about enough is the tiers of quality that you need.... If you start making lithium now, it will probably take you 2 years to tweak it and perfect it for an OEM.... That's just something to bear in mind.
The great raw material disconnect...this underlines the challenge or, let's say, the pace of what's happening and how special the moment is, on a global level.
But by 2030 you can see the disconnect just growing and growing and growing. We are forecasting the supply of lithium to be 1.5m tonnes, whereas the demand will be 2.4. It's a huge gap, that has to be bridged, otherwise you won't have your electric vehicles and you won't have your, your everything above- decarbonisation of cities, countries and so on and so forth.
We are seeing, across the board, prices are increasing. Of course, on top of battery demand increase in prices, you've got this beginning of, whatever you want to call it, a commodity super cycle or a green powered super cycle. And right at the top of that tree, that super cycle tree, are the EV battery raw materials. It's really important to underline that.
Where's it going to come from? ...It's going to come from everywhere around the world, ultimately, over the long term. Disruptors are essential. New companies are essential. Otherwise we're not going to be able to do what we need to do.
If you want to build a lithium ion economy...you need to own a Mid Stream.... If you own the Mid Stream, the raw materials will flow into that company and you will get downstream dominance of this energy storage revolution.
So all that means is, that the scramble for the raw materials, the further we get into the decade, intensifies. And it will end up with, the guys that can actually produce these chemicals, these key chemicals, that the OEMs and battery makers want, they'll be able to call all the shots. And that's something that I can't see changing, unless a lot of them, tens of billions, pours into the mining industry, within the next 12 months.
On the pricing side...the second part of standardisation is or let's say, speeding up, or smoothing out these volatility curves as we grow, is actually OEM's, battery makers reducing their lead times to qualify new material. So if you are bringing on a new mine with a new chemical that you're going to produce and sell, actually those lead times now are down to about, they can be down to about, 12 months. But when we first started, at Benchmark, they were like 2 to 3 years. So that's how far the downstream has come. So there is movement on both sides to speed this thing up. It will be interesting to watch how that evolves.
"Where do you anticipate the majority of the bottlenecks for the global production of lithium ion batteries, both in terms of geopolitics and just fundamentals in general?" The Bottlenecks will be the chemical stage...and the lithium ion battery cell stage. 
(20min delay)