Price and Chart HIO, page-375

Tesla has been busy securing rights to nickel in recognition that it is a vital battery material that will soon be in short supply. Legacy auto makers are asleep at the wheel and cannot get enough supply an will be on the chopping block then carved up by Tesla and Chinese EV manufacturers. With the emergence of cheap LFP (iron) battery technology, it turns out that higher density nickel batteries will only be needed for applications like high end performance cars and trucks. That leaves LFP to fill the massive markets of medium to low end cars and residential and grid scale batteries as although iron based cathodes are less energy dense all of the lithium irons can move in and out on charge/discharge cycles vs other technolgies where up to 50% of the Li-ions remain in the cathode that makes up ~70-90% of the battery by weight. Plus LFP batteries can have iron anode plates and casings.

So what?

Well the Chinese hijacked the EV market when they started producing EV's at the same price as inetrnal combustion engine cars of equivelent power and specs ensuring that they and Tesla will domintae the 100m vehicle market in the flash of an eye, only hindered by the speed at which they ramp up production, not demand. Nimble Tesla quickly pivoted from nickel to LFP but the other auto makers will be left in the dust, or smoke in the GM's Chevy Bolt's case. This means that there will now be 2 types of Tesla 4680 cell, Nickel and LFP wheras before it was all nickel.

So what?

Well suddenly the battery world needs truely humongous amounts of pure iron powder. Battery megapack for storing grid scale power is exploding because cheap surplus power can be stored in them at times of high wind and solar production at cheap prices, then sold when prices are higher at time of peak demand. kWh hours of power is now traded like shares, arbitrage powered by autobidder software that buys and sells power at the limits you set, day trading on steroids!

Plus probably 60-70% of cars will also be powered by LFP batteries, as there is nothing cheaper than Iron that along with phosphate creates a lattice structure like zillions of baseball gloves, each of which catches a lithium ion perfectly then releases it back to the anode through a field of seperating electrolyte in continuous charge/discharge cycles for years, even decades, on end.

So what?

Well Tesla just did a deal with Talon resources for nickel supply and will help them produce it as green as possible. There are by-products apart from nickel in the ore such as copper and gold but they value iron so little that they dont even measure the it's content.

But guess what? Tesla does:

"The purchase price to be paid by Tesla for the nickel in concentrate will be linked to the London Metals Exchange (LME) official cash settlement price for nickel. The parties have also agreed to share in any additional economics derived from by-products extracted from the nickel concentrate, such as iron and cobalt."

Why?

Tesla now realises that iron cathodes will play a massive role in the electrification revolution now underway... but it's so cheap, right? Why bother extracting it as a by-product of nickel ores when they can just buy 65% Fe for ~16 cents per kg?

Well pure iron powder that actually goes into the LFP battery is more like $1.80 per kg and the higher quality of the base ore it's derived from, the less the processing cost, pollution, energy and waste product to dispose of. This could be a new and rapidly growing new market for ore like Supergrade, should it prove suitable for the purpose, which it most likely is. Companies like Tesla may go straight to source and process it into pure iron powder worth $1800 per tonne themselves, or in a JV with the miner like thay just did with Talon, in order to reduce the cost. Tesla's Berlin Gigafactory alone plans to produce an outstanding 250GW of batteries and Texas even more.

It's a small market for worldwide iron ore but a huge one for the few able to supply the right type of ore.

(Disclosure: our Tesla model 3 is on order from China now that it comes with long life LFP batteries and we hold HIO shares and 1 TSLA share. There have been multiple improvements to the car since we ordered it in Dec such as the standby 12v lead acid battery now being LFP and the car will continue be upgraded via software and firmware updates as Tesla innovate at the speed of thought, averaging 27 model and software upgrades - per week! Coventional car makers can switch to make electric cars, but not smart cars. Imagine a smartphone that looked the part but only had the functionality and battery life of an old Nokia... that's why we chose Tesla!)