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 June 23, 2014
Tesla Gigafactory Could Be Boon for Graphite, Lithium, Cobalt: Simon Moores
    Publisher: The Gold Report
    Author: Brian Sylvester


Tesla Motors makes the most sought-after electric cars in the world. The cars run on advanced electric batteries and Tesla CEO Elon Musk wants to build those batteries in America. Tesla has dubbed its $5-billion pet project the "Gigafactory," and it could be up and running by 2017, prompting the need for battery-grade materials like graphite, lithium and cobalt. In this interview with The Gold Report, Simon Moores, manager of industrial minerals data with London-based Industrial Minerals, helps readers sort out the critical materials investors should keep an eye on.

The Gold Report: Tesla Motors Inc. (TSLA:NASDAQ) is planning to build a $5-billion "Gigafactory" in the southwestern U.S. that would produce batteries for its high-end electric cars. You seem excited about it. Tell investors why they should be.

Simon Moores: This one plant would essentially double the world's output of electric vehicle (EV) batteries. That's 500,000 batteries a year at capacity. The idea is to drive down the cost of EV batteries by 30% or more. Tesla is focusing on the supply chain to build the lowest-cost batteries possible. If it can make the cost of its cars much cheaper, it should spark mass uptake of electric vehicles. It's a plan to turn the world electric, in a sense, and Tesla begins in 2017 with the Gigafactory and the launch of its third generation and first mass-market model.

TGR: Would Tesla be building batteries solely for Tesla or would it be leasing its technology to other vehicle manufacturers?

SM: It's a good question. At the moment, Tesla is partnering with Panasonic Corp. (PCRFY:OTC.MKTS) to build batteries for its electric vehicles. But Tesla wants to build the batteries itself, the majority of which would supply Tesla's car assembly plant in California. But there would be more batteries than Tesla could use initially, so it is looking to sell batteries elsewhere, too.

TGR: Initially, there was some chatter about Apple Inc. (AAPL:NASDAQ) being involved.

SM: I heard that rumor as well. Initially I thought that Apple could be involved in the design of the electric vehicles, but to be honest Tesla has done a pretty good job without its neighbors.

In terms of a battery offtake with Apple, I haven't heard anything on this but I believe the plant will only be producing EV batteries, which are much bigger than the portable energy batteries that Apple uses.

TGR: Why would Tesla build a plant to produce EV batteries in the U.S. while others already exist in Asia?

SM: Mainly because that's where Tesla's cars are made. The commercial battery industry is really an Asian one, centered on Japan and South Korea. It's just the way it's developed since the 1990s with leading companies like Sony.

But the thing that really has people excited is the size of the project. Something on this scale could see the return of manufacturing for the 21st century in North America. Asia is where the battery industry grew and developed over the last 20 years. That's where the U.S. missed out.

Companies like Apple have led the U.S. tech revolution but Apple creates its ideas in California, yet manufactures them in China. With something like Tesla's Gigafactory, there is a chance for high-value manufacturing to come back to the U.S.... (To Read the full article please click here).

 June 19, 2014
Audi Preparing Luxury Electric Car Offensive to Rival Tesla
    Author: Via Reuters


Audi has drawn up plans for an electric performance car offensive to tackle and rival the future plans of Tesla Motors if the electric market continues to rise in popularity and importance.

Analysts believe that by the end of the decade, sales of electric cars will rise sharply and as it stands, Tesla is ahead of the game. Additionally, Audi rival BMW has already launched an all-electric car in the form of the i3. As a result, Audi is said to be lagging behind the competition slightly but next year, the company's first all-electric car will be launched in the form of the long-awaited Audi R8 e-tron.

While production of the Audi R8 e-tron will be tailored to demand, the fact that Audi has managed to solve range problems and lift the range to 450 km in just a couple years plays testament to the progression of battery and electric motor technology. The Audi R8 e-tron isn't the only electric high-end car the German marque is preparing with it having drawn up blueprints for a range of high-performance electric sedans and SUVs.

While speaking with Reuters, NordLB analyst Fran Schwope said, "Germany's major carmakers all have their electric-car plans ready in the drawer. They want to be prepared when demand accelerates." Schwope suggested this demand could happen in 5-7 years.

One key electric model Audi is said to have started drawing up is an electric version of the upcoming Audi Q8 SUV to rival the Tesla Model X.

Via Reuters

 June 19, 2014
Is Tesla the most important car company in the world? Morgan Stanley thinks so
    Publisher: Market Watch - The Wall Street Journal
    Author: Claudia Assis


From fledgeling startup to "arguably the most important car company in the world": that's how analysts at Morgan Stanley defined Tesla Motors Inc. in a research note published Wednesday.

In case anyone had any doubts, "we are not joking," said the analysts, led by Adam Jonas. "Tesla is also emerging as an emblematic force in America's effort to foster high tech manufacturing job growth," they added.

Here is Morgan Stanley's case for Tesla, in three broad themes:

Suppliers want to do business with Tesla

"We hear numerous examples of suppliers who once shunned Tesla who are now considering dedicated line and facilities only to supply [Tesla]"

Much-larger car makers respect it

"A BMW engineer recently explained to us how Tesla's presence has helped invigorate the spirit of automobile innovation that was beginning to run stale, further testifying that BMW will be a stronger company longer-term because Tesla is around. Whoa."

Five states are scrambling to have Tesla's $5 billion 'gigafactory'

A governor "would need a very good reason to say no to a Tesla factory," Morgan Stanley said. Sales forecasts plus a vertically integrated battery factory and charging infrastructure could imply Tesla directly employing 20,000 U.S. workers and indirectly behind more than 100,000 U.S. jobs in the next seven years, the investment bank said.

Moreover, Tesla's "Gen 3″ car --- aimed at the mass market and expected to hit the road around 2016 --- will be the "most American-made car on the road," pushing 90% U.S.-made components, more than a Ford F-150 or a Chevy Silverado, Morgan Stanley said.

Claudia Assis

Follow Claudia Assis on Twitter @ClaudiaAssisMW

 June 16, 2014
Chris Berry sees potential in energy metals uranium, scandium, cobalt
    Publisher: Northern Miner Mining Markets
    Author: Alisha Hiyate


Chris Berry sees potential in energy metals uranium, scandium, cobalt

Chris Berry, co-editor of Disruptive Discoveries Journal,
believes the global economy is in for a period of disinflation or deflation -- not a supportive environment for commodities.

"We see a lot of excess capacity in the global economy right now, we see an excess of labour, an excess of capital and an excess of dollars sloshing around in the global economy --- all of which needs to find a home and be soaked up," Berry told TNM TV news at the Canadian Investor conference in early June.

"And until that happens, we see a very challenging period for the commodities sector going forward."

Berry, who writes the Disruptive Discoveries newsletter with his father Michael Berry, explains that a disinflationary or slow growth environment implies a cap on wages, living standards, and on the commodity demand that underpins such growth.

However, the ongoing trend toward a rising standard of living in the developing world, something Berry calls a "convergence of lifestyles" between the emerging world and the developed world, is still in place.

And for selective investors, there are still opportunities in commodities.

"I think you need to look individually at each commodity, look at its supply and demand dynamic, look at where it's used today, look at next generation technology or uses, and try and formulate an idea going forward," he said.

Energy metals such as uranium, lithium, graphite, copper and cobalt are a big part of Berry's investment thesis.

"It has to do with the idea that no middle class has either grown or sustained itself throughout history without reliable access to affordable energy," he said.

Berry is particularly interested in uranium, cobalt and the esoteric metal scandium.

"Scandium is a very, very tiny market -- about 15 tones per year. There's really no primary production, it all comes from either tailings or as coproducts elsewhere," Berry said.

Despite its limited supply, there numerous high-tech applications for scandium, including solid oxide fuel cells and the aircraft business, where aluminum-scandium alloys can make planes lighter and more fuel efficient.

Berry says the potential growth in demand from solid oxide fuel cells alone is "supernormal," and he believes scandium junior EMC Metals (TSX: EMC) could be poised to benefit.

While growth in the scandium market is predicated on a reliable source of scandium, that is what EMC hopes to be able to provide in the coming years, Berry said.

EMC primary project is the Nyngan scandium project in New South Wales, Australia.

To Watch the full TNM TV news interview with Berry here.

 June 11, 2014
Report: Tesla Gigafactory decision down to San Antonio and Reno
    Publisher: Phoenix Business Journal
    Author: Lance Murray

  Tesla CEO Elon Musk's economically-charged decision on where the company will locate its $5 billion Gigafactory battery plant may not come until the end of the year, but an expert has told USA Today the battle has come down to a David and Goliath story.

Arizona, New Mexico, Texas and Nevada have been reported as the frontrunners for the factory, but USA Today said the real battle is likely down to big San Antonio vs. little Reno.

"A case can be made for both Arizona and New Mexico ... and you have to give them credit," John Boyd, a principal of Princeton, N.J.-based site selection firm The Boyd Company, told USA Today. "But the two leading contenders are Reno and San Antonio."

Tesla has said it will break ground in two or three of the states while it works on making a decision, but that could just be Tesla wanting to save time once a decision is made.

"I think it's just a matter of Tesla saving time on the development process once it picks a site," Dennis Donovan, a principal with another New Jersey-based site selection firm, Wadley Donovan Gutshaw Consulting, told USA Today. "(The concurrent development) is actually not that bad for those communities even if the company goes somewhere else because the site infrastructure will be valuable for other prospective tenants."

According to USA Today, San Antonio and Reno have advantages over other locations.

First, both are in right-to-work states, which New Mexico is not. Also Arizona has a corporate income tax, which wouldn't be an obstacle in Texas and Nevada.

Also, Texas and Nevada have large talent pools at the ready, as well as infrastructure with access to alternative energy sources such as solar and wind.

Lance Murray edits and writes for the DBJ's website and can be reached at 214-706-7106

 June 10, 2014
What will Tesla Motors' battery super plant mean for Critical Mineral demand?
    Publisher: Industrial Minerals Data


In February of this year, Tesla's announced its ambition is to build the world's largest electric vehicle battery production facility at a cost of $5B, known as the Gigafactory - the equivalent of today's global battery production in one plant. The expected demand for critical metals for the batteries, including cobalt, lithium and graphite, is substantial. It is estimated the global demand for cobalt alone from the Tesla Gigafactory will increase by 20%.

Tesla's CEO has stated publicly that the Gigafactory intends to ethically source its raw materials as locally as possible to reduce its carbon footprint. The front runner for the plant's location is rumoured to be near Reno, Nevada -- a relative stone's throw from Formation Metals' fully permitted Idaho Cobalt Project, a near term cobalt mine that could be in production in as little as 12-14 months upon the successful completion of mine financing.


This free report is made available from Industrial Mineral Data with permission. The report covers a wide range of topics related to this ambitious project, including Tesla's demand for the critical minerals it will require.
 June 05, 2014
ENRC to halt production of cobalt oxide concentrates in 2015
    Publisher: MetalBulletin
    Author: Fleur Ritzema


ENRC to halt production of cobalt oxide concentrates in 2015

Kazakhstan-based miner ENRC will halt production of cobalt oxide concentrates at its DRC Boss Mining operation from the start of 2015, Metal Bulletin understands.

The company will not expand its DRC mine when oxide concentrate resources are depleted next year, owing to low market prices, according to sources familiar with the situation.

Low-grade cobalt metal prices, on which concentrate sales are typically based, have dropped from close to $20 per lb in 2010 to the low teens in 2014.

Cobalt prices have stabilised over the past few weeks at $13.25-14.10 on low-grade.

The news about ENRC will come as a blow to Chinese cobalt salt makers, who have been struggling to source raw material at a time of tough competition on end products.

Oxide concentrates are widely used in China, where they are leached and used to make cobalt salts.

Most Chinese cobalt salt makers source the majority of their feed from three DRC-based suppliers: ENRC, Freeport Cobalt and Glencore.

ENRC exports around 4,000 tpy of cobalt contained in oxide concentrates to China, sources estimate.

ENRC will continue to produce sulphide concentrates at Boss Mining.

These sulphide concentrates are used as feed for cobalt and copper metal at ENRC's Chambishi operation in Zambia, Metal Bulletin understands.

Some cobalt hydroxide produced at the Tenke operation in the DRC used to be sold to Chambishi, Metal Bulletin understands. More of this hydroxide is now going to Kokkola in Finland, however, after its sale to Freeport Cobalt last year.

Chambishi cobalt is now solely reliant on sulphide feed from Boss Mining, Metal Bulletin understands.

Sulphide concentrates cannot be treated at most Chinese operations, owing to a lack of roasting facilities, Metal Bulletin understands.

ENRC had not responded to requests for comment at the time of writing.

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 May 25, 2014
Tesla's Gigafactory: Needs 6 new graphite mines, but where will cobalt be sourced?
    Author: Simon Moores - Industrial Minerals


Tesla's Gigafactory: Needs 6 new graphite mines, but where will cobalt be sourced?

The graphite, lithium and cobalt industries are set for major demand surges as Tesla Motors prepares to break ground on its super-battery plant, the Gigafactory, next month.

The high-end EV manufacturer is looking to double the world's battery output as it seeks to bring the production cost of battery packs down in a bid to spark mass EV uptake.

The company is aiming to begin construction on the Gigafactory in June 2014 with an old airfield in Reno, Nevada rumoured to be the favoured site.

One of the biggest impacts of the Gigafactory will be demand for the critical minerals that will fuel it.

Lithium, graphite and cobalt are all set to be key raw materials to make Tesla's lithium-ion batteries, but the question remains whether the company can get the volumes and consistent quality it needs in time.

Below is an analysis on the potential volumes of critical minerals Tesla would need for a Gigafactory operating at capacity which is expected in 2020.

Graphite demand up 152%

Graphite will be the largest input raw material for Tesla. Should the company choose natural graphite, it would require as much as 126,000 tonnes of flake graphite each year in the form of 50,000 tonnes of the battery-grade material, spherical graphite.

This is an increase of 152% on today's battery demand for the mineral. It equates to six new graphite mines on the basis of today's 30,000 tpa mine size average and the yield of suitable material gained from the mine.

Graphite both natural and synthetic is used as the cathode in a battery.

China is the leading producer of flake graphite and the leading processor of battery grade spherical graphite today. But the country is aiming to consolidate operations which could see it withdraw somewhat from the international market place.

Lithium demand up 50%

Lithium, the second largest input mineral by volume, will see demand increase by 25,000 tonnes a year from a Gigafactory at capacity. This is an increase in demand from the battery sector of 50% on 2013 levels.

Mined as a mineral and processed into a chemical, lithium is used as the cathode material in both hydroxide and carbonate form.

Chile is the leading producer of battery grade lithium today.

Cobalt demand up 17%

Cobalt demand from the battery sector could rise as much as 17% on 2013 levels thanks to Tesla's plans. This is the equivalent of 7,000 tonnes a year.

The metal is also used as a cathode material in lithium-ion batteries.

The leading supplier of cobalt is the war-torn country, the DR Congo in Africa which supplies 55% of the world's total.

Tesla has stated it does not get its cobalt from the Congo, however of most concern will be the lack of dedicated cobalt mines around the world with most supply coming as a by-product such as is the case of copper mining in Africa.

It is also important to note besides the Congo, there is no large producer of cobalt but rather many countries producing very small amounts varying from 3-7,000 tpa which collectively equate to the remaining 45%.

Other less critical raw materials Tesla will need include nickel, bauxite (aluminum), and copper. The company will not be using rare earths as its cars do not use a permanent magnet.

Please click here to read the full article.

 May 13, 2014
Cobalt Is the Key to Future Chips, Applied Material Says
    Publisher: Wall Street Journal - Digits Tech News & Analysis from the WSJ
    Author: Don Clark


Cobalt Is the Key to Future Chips, Applied Material Says

Few things get semiconductor experts more excited than a shift in the key materials used to make computer chips. Applied Materials (AMAT:NASDAQ) is proposing just such a change.

The Silicon Valley company, one of the best-known makers of semiconductor manufacturing machines, on Tuesday is announcing a way to head off defects that are becoming a stumbling block as manufacturers keep shrinking the size of transistors that act as tiny switches on chips. Applied plans to substitute the element cobalt to wall off the microscopic copper wires that connect the transistors together, replacing a material called tantalum.

"This is the first material breakthrough in the last 15 years in interconnect technology," says Sundar Ramamurthy, Applied's vice president and general manager of metal deposition products.

Applied's announcement follows a series of other changes spawned from the race to make smaller transistors, a pattern called Moore's Law that keeps driving down the cost of electronic functions. Intel (INTC:NASDAQ), for example, led a push to introduce the metal hafnium and three-dimensional structures into transistors to make them switch faster and use less energy.

As transistors get smaller, many more of them can be packed onto each chip--billions, in fact. Connecting them requires grids of wiring that are increasingly large and complex; the copper strands contained in all the chips fabricated on a typical 12-inch semiconductor wafer can measure 100 kilometers, Ramamurthy says.

But engineers run into problems as they shrink the size of those wires, which are formed by filling up furrow-like channels with copper. Like a large volume of water forced into a smaller streambed, current moves faster and causes impacts akin to the rocks or boulders moved by a rushing torrent, Ramamurthy says. The current can shake loose copper atoms, creating gaps called voids that lead to short circuits that cause chips to stop working correctly, he says.

The trick is to coat the sides of the copper-filled trenches with a thin film of cobalt instead of tantalum, as well as capping the channel with another cobalt layer, Ramamurthy says.

Encapsulating the interconnections with cobalt can bring an 80-fold increase in the electrical reliability of chips, Applied says.

There's another potential upside. Tantalum is what the industry calls a "conflict" metal, produced in parts of Africa where warlords sometimes control mining activity. Cobalt is available elsewhere.

Customers who want to make the shift will have to buy an Applied production machine to apply the cobalt, using a process called chemical vapor deposition. The company on Tuesday is introducing such a machine, an extension to an existing product line called the Endura Volta.

Ramamurthy says 75 of the CVD chambers for processing individual wafers are already in customer hands for testing purposes. The machines aren't likely to be introduced in large volumes until manufacturers are ready for their next process change to create smaller transistors.

After all, a switch in materials this basic doesn't happen often. "This is a big change," Ramamurthy said.

To read more or subscribe for the latest news and analysis follow on Twitter @WSJD,or subscribe your email address for the latest breaking news and reviews from WSJ personal-tech team

 April 22, 2014
China's cobalt concentrate imports up 13.3% in March
    Publisher: Metalbulletin


China's cobalt concentrate imports up 13.3% in March

China's cobalt concentrate imports rose by 13.3% year-on-year in March, according to the latest customs data.

Shipments last month were 11,555 tonnes, compared with 8,339 tonnes in February. The volume was within the normal range, market participant said, adding that cobalt concentrate imports...

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