Good News & Bad News, page-26518

Just as Oils aren’tOils: Batteries aren’t Batteries.

The case for Li shortsupply.

Much has beenpostulated about the over-supply of Li and potential for a decline in prices.So, let’s debunk this once and for all. In this short article, I’ll give it theKISS principle: (Keep it Simple Stupid).

Firstly, I acknowledgethere are all types of battery chemistries, with many smart people developingothers. None of them will replace Li, why? Weight. As you are probably aware Liis the third lightest element, if it did not react (dissolve) in water, it is ametal that would float! Why is this important? I come back to this pointshortly.

Secondly, there arebasically 4 types of batteries, Mini button size, we are all familiar with,power tool batteries weighing up to 1kg, EV car batteries weighing around200kg+ and massive power-grid batteries of hundreds if not thousands of tons.

For the last category,weight and size is not a problem, cost becomes the major concern, cheaperbattery chemistries with similar power density: stand-up and take a bow.

EV car batteries needto be as light as possible, basic physics, power to weight ratio, the lighterthe car and battery = greater range: simples.

Now, the big sleeperis tradie power tools, home appliances and garden tools. All now are beingpowered by batteries, Power tools, cordless vacuum cleaners etc. need to be aslight as possible, therefore Li batteries. Just consider, millions ofhouseholds, with cordless devices worldwide, that demand for Li batteries is animmense sleeper seeming not factored into Li demand.

EV batteries will berecyclable, and plants are being built specifically to recycle EV batteries andvehicles. This supply of recycled Li will not come on stream in any quantityfor about 10 years when the first gen. of EV come to be replaced. Will thisrecycling be economic? Probably not, just imagine delivering an EV to arecycling centre a 1000ks away. Hmm, therefore there needs to be an inbuiltdeposit of between $1/2k redeemable when the EV is delivered to the recyclingcentre to make this work.

Currently, tradie& home appliance Li batteries are not easily recyclable, so once use only,why? When you stack small batteries with plastic casings, they crack, short-outdue to residual charge and catch fire, a Li battery fire is almost impossibleto extinguish. On the roads there are considered hazardous cargo. Again, adeposit premium will need to be built into the cost of new batteries so whenthey a surrendered at approved collection points they can be properlydischarged, wrapped and packed so they are not dangerous cargo. Otherwise abouta third of all Li batteries produced each year will not be recycled.

Oversupply of Li? Idon’t think so. Elon Musk has recognised the problem saying he is not going torely on rare earth magnets for motors and looking at alternative battery chemistries. Really? So, you’re not going to build cars that are as efficient as possible?

Personally, I thinkthe current weakness in Li pricing is due to several factors, Christmas inEurope and America, bad weather, Chinese new year, Covid along with generalisedun-ease in financial markets and inflation. New EVs are not cheap and gettingmore expensive by the day.

Albemarle wants all ofLTR production in a couple of years because they recognise the massiveshortages, they are the biggest, they run the numbers, they know what thedemand is likely to be from their clients. Don’t buy the concentrate, or themetal, buy the mine.I think PLS is next in the cross hairs of TO orprivate equity.

Fill you boots, happy& comfortable retirement.

Cheers XanaX