Running discussion on SP, page-54307

Rio looking outside Tier-1 jurisdictions

Rio has become the latest major to cast its eyes beyond the generally regarded Tier-1 jurisdictions of Australia, Canada, the US and South America in its hunt for growth.

Rio executive Mark Davies told investors on its investor day panel on Wednesday only Russia and a handful of other jurisdictions were off limits in its search for commodities useful to the energy transition.

“So I think one of the key changes that we’re looking at making is, is really for exploration and their project development teams opening up the portfolio, a broader range of options … a broad range of commodities probably focused around those commodities that support the energy transition,” he said.

“A broad range of countries (with) probably only one or two exceptions, maybe Russia that we wouldn’t touch, but I think really, really opening up the portfolio, looking at smaller, smaller projects, and a minimum viable project approach where we start small and grow and create optionality and many of our assets actually over over time have come from that.

“If I were to summarise I would say we’re going to move from a short green list to a very short red list.

“That will not only give us a better chance of success but we can kill things quickly because we’ve got the next thing to move on to.”

In particular, its executives are remaining upbeat on the idea its high grade Simandou project in Guinea can be brought into production in spite of the historic challenges associated with developing iron ore projects in West Africa.

Rio executive Bold Baatar described Simandou, with its low impurities and 67% iron ore grade as the “Rolls Royce” of iron ore, suggesting unlocking the deposit – and negotiating complex relationships and infrastructure developments with Chinese partners and the Guinean Government – would be a key in providing iron ore for a low carbon steel industry.

“One thing that you have to think about is if you would like to reduce CO2 the steel blast furnace emits 2 tonnes of CO2 for every tonne of steel production,” he said.

“If Simandou ore comes in it raises a potential to reduce it by more than half.

“So I think impeccable ESG has a view towards a balance of many considerations and I think decarbonisation and the future of DRIs is definitely in the cards.”





Tesla may have cut 10GWh deal with BYD to make more cobalt free cars

A small note in Tesla’s latest presentation that stated it would shift all its Standard Range vehicles to cobalt-free batteries has sparked speculation on which battery maker it will buy them off to keep to its strategy of using locally made parts.

In the third quarterly report for 2021 released on October 20, local time in the United States, Tesla stated that “For standard range vehicles, we are shifting to lithium iron phosphate (LFP) battery chemistry globally.”

Tesla currently uses LFP batteries from Chinese battery maker CATL in the Standard Range vehicles it makes at Shanghai.

While they are less energy-dense than the NCA (nickel cobalt aluminum oxide) batteries it uses in its Performance and Long Range vehicles, they have the advantage of being cheaper to produce, they are cobalt-free and they can (and should be) be regularly charged to 100%.

But with Tesla’s ultimate goal to make electric cars more affordable driven by using as many locally made parts as possible, it means that it would ideally be sourcing LFP batteries from a US-based factory.

“Certainly, our goal is to localize all key parts of the vehicles on the continent — at least the continent, if not closer to where the vehicles are produced,” said Tesla’s senior VP Drew Baglino when asked about the change to LFP batteries at its Fremont factory in California.

The new report from China suggests that Tesla may have already cut a for 10GWh deal – enough for 200,000 50kWh batteries a year – with BYD, which is also one of China’s largest EV makers and which in 2020 launched a “Blade” LFP battery that it says is the safest on the market, having a much-reduced tendency to thermal runaway.

“The information I got is that BYD has already obtained Tesla’s 10GWh order,” a source close to BYD was quoted as saying by Chinese media.

Although BYD declined to comment to Chinese media, subsequent follow-up news indicated that BYD’s “blade battery” may be the first to be installed in Model Y.

Reuters reported in June that sources told it Apple was in talks with both CATL and BYD to get LFP batteries for a planned (but perennially) electric vehicle and wants them to build factories in the United States.

If Tesla is using BYD’s batteries it may help to ward off some of that potential competition; no matter how much Tesla says it welcomes this, it owes continued profitability to shareholders.

Public information shows that BYD has a LFP battery factory in Lancaster, Pennsylvania, to provide batteries for BYD electric buses sold in the United States.

Although the capacity of this plant is only about 1GWh, it is only about 800km away from Tesla’s Fremont plant.

Tesla recorded its most profitable quarter ever in its Q3 report, noting a “structural shift” in demand for electric vehicles.

It is aiming to increase vehicle deliveries by an average annual growth rate of 50% in the next few years, and the goal is still to produce the first Model Y in Berlin and Austin, Texas by the end of this year.

https://thedriven.io/


*To Remind,



Tesla supplier CATL plans a major battery plant in Shanghai

China's CATL is planning a major new automotive battery plant in Shanghai, continuing a blistering pace of expansion that will cement its lead as the world's No.1 supplier, two people with knowledge of the matter said.

Locating the factory in Shanghai will put it close to Tesla Inc's Chinese production base after it began supplying batteries for the U.S. automaker's Model 3 cars in China last year.

CATL hopes to rapidly expand that relationship, aiming to become its biggest supplier in the near future by providing half of the battery cells Tesla uses globally in electric vehicles and roof energy storage, said a senior source at the Chinese company.

CATL said that it is in talks with Tesla about more collaboration and Tesla is seeking help from the company on battery solutions, but declined to comment on any plans for additional production capacity.

Many battery makers are ramping up production to meet soaring worldwide demand as car makers accelerate their shift to electric vehicles to comply with tougher emission rules aimed at tackling global warming.

Tesla in April also urged its suppliers to produce as much as they can.

In March, LG Energy Solution said it plans to invest more than $4.5 billion in its U.S. battery production over the next four years. read more

At 80GWh per year, the new Shanghai plant would be capable of powering some 800,000 electric cars, analysts said.

The plant is likely to be located south of Tesla's Shanghai factory in Lingang, Pudong New Area, said the second source, adding it will hire 5,000 workers and manufacture cell-to-chassis (CTC) batteries.

The new technology integrates cells directly onto an EV's frame to increase the energy density of battery systems.

CATL Chairman Zeng Yuqun has said electric vehicles could attain driving ranges of over 800 km (500 miles) with CTC technology, adding that CATL aims to launch the technology before 2030.

By comparison, CATL's cell-to-pack technology currently used in Tesla's Model 3 cars gives the vehicles a driving range of around 468 km per charge.

CATL, whose clients also include Volkswagen, General Motors, BMW and Daimler as well as Chinese auto makers, nearly quadrupled its battery sales to 21.4 GWh in the first four months of 2021, according to SNE Research.





Apple, Chinese manufacturers in talks on U.S. car battery factory

Apple Inc is in early-stage talks with China’s CATL and BYD, about the supply of batteries for its planned electric vehicle, four people with knowledge of the matter said.

Apple has made building manufacturing facilities in the United States a condition for potential battery suppliers, said two of the sources.

A senior official in U.S. President Joe Biden's administration confirmed that condition on Tuesday.

"My understanding is that Apple is talking about building advanced battery production factories here, here in the U.S.," Jared Bernstein, a senior White House economic adviser, told Reuters.

"That is completely consistent with what the president has talked about in terms of onshoring supply chains particularly in areas where we might grab global market share," he said.

CATL, which supplies major car makers including Tesla Inc, is reluctant to build a U.S. factory due to political tensions between Washington and Beijing as well as cost concerns, the two people said.

It was not immediately clear if Apple is also talking to other battery makers.

Apple, which has yet to make a public announcement about its car plans, declined to comment.

CATL, the world's biggest automotive battery maker, and BYD, the world's No. 4, also declined to comment.

Apple is in favor of using lithium iron phosphate batteries that are cheaper to produce because they use iron instead of nickel and cobalt which are more expensive, the four people said.

People familiar with the matter have previously said Apple's planned EV could include its own breakthrough battery technology.

It was not immediately clear if the discussions with CATL and BYD involved Apple's own technology or designs.

The discussions come at a time when the U.S. government is looking to attract more EV manufacturing.

Biden’s proposed $1.7 trillion infrastructure plan includes a $174 billion budget to boost the domestic EV market with tax credits and grants for battery manufacturers, among other incentives.

Many battery makers are ramping up production to meet soaring worldwide demand as car makers accelerate their shift to electric vehicles to comply with tougher emission rules aimed at tackling global warming.

Chinese battery makers are expected to grow at a faster pace than their foreign peers thanks to further expansion of the world's biggest EV market, SNE Research said in a June report.

Reuters reported last week that CATL is planning a major new automotive battery plant in Shanghai, continuing a blistering pace of expansion that will cement its lead as the world’s No. 1 supplier.

The factory would be near Tesla’s China manufacturing operations.

www.reuters.com