Battery partnerships with China: not being appreciated but needed | Mining projects buying spree
Weekly batteries & Mining updates (July 31 - Aug 6)
Mining and Minerals
FT: China’s overseas investment in metals and mining set to hit record
In the first half of this year, Chinese investments and new contracts in the mining and metals sector topped $10B, which is more than last year and on track to exceed 2018’s record of $17B.
Don't know how Tsingshan feels about this…
FT: France’s Eramet blames lack of EU funds for deeper partnership with Chinese
French mining group Eramet (27% owned by the French state) has blamed a lack of EU critical minerals funding for having pushed it into a deepening partnership with China’s Tsingshan, the world’s largest stainless-steel producer, which was behind the nickel market blow-up last year. “It’s because of the lack of financial support from Europe that we further developed our partnership with Tsingshan.”
Eramet has partnered with Tsingshan in Indonesia on a vast nickel project and opted to branch out into lithium in Argentina together. Eramet’s activities in Indonesia are mainly nickel and ferronickel production with PT Weda Bay Nickel (Eramet 43%; Tsingshan 57%, operator). In November 2021, Eramet announced a partnership with Tsingshan to construct a $400M lithium plant in Argentina, which has now been revealed to have expanded to a $1.7B project as of this June.
BMI: Saudi Arabia enters nickel mining through Vale deal, lithium could be next
Saudi Arabia recently sealed a $3.5 billion deal for a stake in Vale’s copper and nickel unit. The Middle East kingdom has been actively seeking opportunities in the mining space. Early in January, Saudi Arabia launched a mining fund in an effort to reduce oil dependency, planning to invest up to $15B of capital in overseas assets. In June, it announced the plan for a second lithium processing facility to supply BMW.
BMI: Albemarle looks to acquire more lithium resources to secure post-2030 supply
The world's largest lithium producer Albemarle announced it will acquire more early-stage lithium projects to meet forecast demand beyond 2030. It has picked an opportune moment to acquire undeveloped lithium assets, with prices for the metal still falling and a supply shortage due to start in 2027.
Albemarle has bought stakes in two companies developing sites across Canada and Australia this year. In August, Albemarle invested C$109M ($82.6M) for around a 5% stake in the Canada-based lithium developer Patriot Battery Metals, which owns one of North America’s biggest hard rock lithium deposits, the Corvette lithium project in Quebec. In Junes, the Australian arm of Albemarle bought Australia's Lithium Power International for A$30M ($20.64M), which owns lithium mines across Australia and Chile.
BMI: Lithium industry needs over $116 billion to meet automaker and policy targets by 2030
Rio Tinto felt a similar way about the copper mine buying spree
FT: Miner Rio Tinto to test ‘new frontiers’ as copper age dawns
The Rio Tinto Chair highlighted that relying solely on M&A for copper expansion is inadequate due to a significant demand-supply gap. He emphasized the necessity for innovative strategies in the long run, though also recognized the increased exploration spending. He advocated enhanced cooperation with smaller firms, vital for initial high-risk mapping and drilling, facilitating larger extraction later. In the near-term strategy, he expressed skepticism about placing copper processing facilities near the copper mine, due to mine-related economic issues, energy, and water challenges.
Rio Tinto is in the process of developing its copper mine at Oyu Tolgoi in Mongolia, though Rio Tinto is not the only customer on Mongolia’s mind: Reuters: Mongolia to deepen cooperation with US on rare earths, prime minister says
FT: Uranium: Niger coup highlights mellower view of yellow metal
Low prices over the past decade reduced production, which fell a quarter from 194M pounds in 2013 to 145M pounds last year. As a result, global demand already outstrips supply by some 50M pounds per year. This is depleting stockpiles. On top of that, the metal is widely stored. In 2022, global stockpiles stood at about 3.8 times the annual demand.
More troubles for deep sea operations
BBG: In the Race to Mine the Seabed, China Takes a Hard Line
Countries like Norway and Nauru are also showing support for deep-sea mining.
FT: Seabed watchdog accuses miner of ignoring procedures after spill
During an underwater nickel collection, Nauru Ocean Resources, a subsidiary of The Metals Company, spilled 72,000 liters of water with seabed sediment and metallic fragments. An International Seabed Authority investigation, published in May, found no major environmental harm but criticized the company for inadequate risk awareness and procedure adherence.
WSJ: Mining Tech Startup Raises $28 Million Amid Critical Minerals Rush
Australian mining tech startup Plotlogic has raised $28M in Series B financing, co-led by Galvanize Climate Solutions and SE Ventures (backed by Schneider Electric).
Batteries
Tsingshan isn’t the only Chinese firm being underappreciated by their Western counterparts
FT: Chinese-owned battery group involved in Tata UK gigafactory
Despite attempts by Tata and government officials to keep it under wraps, the Chinese-owned battery manufacturer AESC is set to play a key role in Tata's UK battery facility. Tata recently committed £4B to establish a UK plant aimed at producing batteries for electric vehicles from Jaguar Land Rover.
BBG: Chinese Firms Are Seeking Korean Partners to Skirt US EV Rules
Over the past 4 months, Chinese companies and their Korean partners have announced some 5.1T won ($4B) of investments in 5 new battery factories in Korea. Chinese firms seek to access the US market, challenging Biden's bid to restrict their involvement in the electric car supply chain.
BMI: Phosphate concerns drive Chinese battery investments in Morocco
Morocco controls over 70% of the world’s known phosphate rock reserves.
Chinese Gotion ($6.3B), Tinci Materials ($280M), and Yahua Industrial Group (MOU) have all announced battery projects in Morocco this year.
BMI: Gigafactory investment slows in first half of 2023 as producers focus on existing plans
Cell gigafactory announcements this year have slowed, with capacity additions well below levels seen in 2022. Producers are currently prioritizing the existing projects rather than initiating new ones, and financial challenges have also led some new players to pause their projects.
BMI: The state of the cathode market
The cathode market is headed for a deficit starting in 2027 and right now, the only regions in surplus are China and the rest of Asia.
Certain cathode chemistries are already in a deficit. This year will also see the first-ever global shortfall in Tier 1 cathode materials.
Quick Read
Bloomberg: Tesla Wants to Build a Semi Truck-Charging Route From Texas to California, seeking $100M for nine big rig charging points
DN: Indigenous Groups in Argentina Protest Lithium Extraction on Their Land
BMI: Indonesia moves up the nickel value chain with Huayou nickel sulphate plant
OilPrice: What Does China's Stimulus Plan Mean For Rare Earths?