...we should do that.
First up, one of the funnier Twitter back-and-forths so far this year:
Chile is the largest copper producer in the world 29%.
— Wall Street Silver (@WallStreetSilv) January 22, 2023
In order for green technologies to scale up, the world needs to double ANNUAL copper production. That seems unlikely.
Activists are using ESG to block development of new mines. Copper to the moon🚀
Credit @SRSroccoReport pic.twitter.com/zZRD8UDVDM
Damn, I just got fact checked by Elon Musk. 😢
— Wall Street Silver (@WallStreetSilv) January 22, 2023
That had been preceded by this, nine months earlier:
Price of lithium has gone to insane levels! Tesla might actually have to get into the mining & refining directly at scale, unless costs improve.
— Elon Musk (@elonmusk) April 8, 2022
There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.
And here's the latest. As Barron's headlines it, A Big Deal, May 9:
Tesla Breaks Ground on Texas Lithium Facility. Why It’s a Big Deal.
Tesla broke ground Monday on its new lithium refinery in Texas, which is expected to produce enough of the battery-grade metal to build one million electric vehicles by 2025.
Chief Executive Elon Musk, who joined Texas Gov. Greg Abbott for the groundbreaking ceremony, said construction was expected to be completed next year with production starting in 2025. It will make Tesla (ticker: TSLA) the only North American car maker to refine its own lithium.
“Increasing lithium refining capacity is critical to a sustainable energy economy—today we’re breaking ground on our in-house lithium refinery outside of Corpus Christi, Texas,” the company said in a statement on Twitter.Increasing lithium refining capacity is critical to a sustainable energy economy—today, we're breaking ground on our in-house lithium refinery outside of Corpus Christi, TX.
— Tesla (@Tesla) May 8, 2023
This facility will also prioritize the elimination of a challenging refinery byproduct (sodium sulfate).… pic.twitter.com/mBnDBLNrW7It’s a significant moment for Tesla and marks a moment of vertical integration for the auto maker. Tesla is trying to control more of the raw materials for its cars as growth in EV sales around the world puts pressure on the global supply chain for lithium and lithium-ion batteries. Vertical integration isn’t new for the car business. Henry Ford ‘s company once mined the iron ore and manufactured the steel used in Ford vehicles. As the car industry matured, however, auto makers didn’t feel the need to vertically integrate and let suppliers invest the capital needed to meet their needs.
With EVs being a new technology, relative to the century-plus-old auto industry, vertical integration is back and other companies beside Tesla are taking similar steps. General Motors (GM) recently invested $650 million in the mining start-up Lithium Americas (LAC) and has supply agreements with other lithium miners. GM is also building battery plants with LG Energy Solution (373220. Korea) and has signed deals to ensure supplies of materials for battery cathode materials.
Tesla targeted lithium refining because that’s where it saw the biggest opportunity to reduce costs. “There’s like software margins in lithium processing right now,” said Musk on his company’s second-quarter earnings conference call in July 2022. “So I would really like to encourage, once again, entrepreneurs to enter the lithium refining business. You can’t lose. It’s licensed to print money.”....
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Related, March 23:
Lithium Mining Giant, Albemarle, To Build $1.3 Billion Processing Plant (ALB)
Not only is the big miner also thinking vertical integration, they are a supplier to Tesla.
