Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
During Tuesday’s much-hyped battery day, Tesla CEO Elon Musk laid out plans to put everyone behind the wheel (or is that sleeping in the back) of a $25,000 car that drives itself.
Much of the three hour-plus presentation was low on detail, high on promotion and stratospheric on ambition, (it is ever thus) but Tesla’s plans to start mining seemed particularly simplistic.
With great fanfare and 40 years after Chevron’s Thacker Pass, Tesla announced to the world – and to a parking lot – that there were significant untapped lithium reserves in Nevada clay.
“People haven’t even been trying. It’s just like widely available”
Tesla said they secured the rights to 10,000 acres in the Silver State but if their factory was in Hawaii they probably would’ve mined there, because as Musk told the cars assembled in front of the stage “it’s pretty much everywhere”:
“There is basically so much damn lithium on earth it’s crazy. It’s one of the most common elements on the planet.”
Yes. It is crazy.
Musk went on to explain there is enough lithium in the United States to convert the entire vehicle fleet in the US to electric.
Enthusiastic honking from the lot.
Musk was later corrected by his SVP on stage that actually the lithium in Nevada alone is sufficient to electrify the 300 million US car parc.
Moreover, that’s lithium already been “discovered today” to which Musk appended:
“People haven’t even been trying. It’s just like widely available.”
There are 63kgs of lithium carbonate in a Tesla 70kWh battery. So that’s 18.9 million tonnes if everyone wants to trade in their clunker for a Model Y.
Global lithium carbonate equivalent production last year was 365,000 tonnes, an increase of 32% from the year before.
Just 32%? Clearly the lithium mining industry simply hasn’t been trying.
“It will look pretty much the same as before. It will not look, like, terrible. It will be nice”
Elon Musk
Musk solves difficult problems from a “first principle standpoint” which he frequently referred to on stage.
Invented by Aristotle and evidently perfected by Musk, this approach basically says forget about how things have always been done. Think like you’re the first one looking for answers to solve a particular problem.
The question, according to Musk:
“What is the smartest way to take the ore and extract the lithium and do so in an environmentally-friendly way?”
The solution, according to Musk:
“What we’ve found is we can actually use table salt to extract the lithium from the ore. Nobody’s done this before. All the elements are reusable. It’s a very sustainable way of obtaining lithium.”
Add table salt. Add water. A recipe for lithium mining.
With extraction solved, how about tailings?
Again, first principle thinking will provide the answer:
“The nature of the mining is also very environmentally sensitive in that we sorta take a chunk of dirt out of the ground, remove the lithium, and put the chunk of dirt back where it was.
“It will look pretty much the same as before. It will not look, like, terrible. It will be nice.“
Honk. Honk. Honk.
“It would just be, basically, raw materials coming from the mine and from raw materials from the mine out comes the battery ”
Cobalt hardly got a mention in the session, except in the bit about how a cathode is like a bookshelf with cobalt being the “stable” part of said bookshelf.
If they really wanted to put it into layman’s terms they could just have said cobalt stops our cars from bursting into flames.
“Leveraging novel coatings and dopants,” is how Tesla says it successfully eliminated cobalt altogether, which is not the first time Musk has leveraged dopants either.
Did Tesla join the Congo artisanal cobalt support group this month? Yes. Why? No reason.
Did Tesla sign a long term supply agreement with Glencore for cobalt from the Congo in June? Yes. Why? No reason.
Honk. Honk.
With lithium mining sorted, cobalt gone and graphite replaced by “awesome and inexpensive” sand (it’s not called Silicon Valley for nothing), Musk moved onto nickel.
Tesla will need the devil’s copper in spades (in spades, not in HPAL) as it motors towards nickel rich batteries and annual production of 20 million cars a year.
“I think they are going to make more nickel.”
Think 20m is too ambitious? You must not be using first principle thinking, because all you really need to do is eliminate “legacy things” like metal sulfates from the process.
Eliminating this “insane” step – which “just happened to be what chemists wanted a long time ago” – you end up with this:
“It would just be, basically, raw materials coming from the mine and from raw materials from the mine out comes the battery. ”
Even so, Musk worries that Tesla won’t be able to scale and “we have to make sure we are not constrained by nickel availability”:
“I actually spoke to the CEOs of the biggest mining companies in the world and told them please make more nickel. It is very important. I think they are going to make more nickel.”
You’re right, Elon, miners are making more nickel as I write this.
Just get on the horn again when you need them to make more.
Honk.
11 Comments
Dan
Written like “The Bard” with excellent expertise & wit.
DNA
I’ve read your article very thoroughly.
And I can say with confidence that you are the type of person that is holding our species back.
Why is this world so filled with educated… yet stupid people ? What do we need to do ?
Steve
DNA, I agree. We are watching the demise of many arrogant ‘business as usual’ companies in the oil patch, The sarcastic ‘we know better’ attitude in this article tells me that the mining industry is ripe for disruption.
Ed
You sound like the same CEOs of big ICE car companies making a joke of Tesla now but will be crying tomorrow. Sure Elon tends to oversimplify things but he has always proven the naysayers wrong.
Dr Francis Manns
This time he’s very, very wrong…for many reasons…
Marc
This time? Musk is more wrong than right. By far.
Observer
Well done Frik, Elon can fool the world on visionary concepts that look and feel good and therefore are kept alive heavily subsidized, but mining isn’t in that category. When Japanese giants haven’t been able to figure out recovery from clay after many years of running pilot plants, my guess is table salt is a bit too simplistic. Just a bit Elon.
Kc
All you did was make fun of his claims. 0 useful information. Also I think you straw manned his table salt claim
JOHN
Those criticizing Frik here do not seem to understand what Frik is trying to say. There are lots of hurdles in setting up a mine. Some of those hurdles are not engineering hurdles.
1) Environmental / Regulatory / Law – Depending on the country and state, this alone could takes 3 years at a minimum, with some taking 5 years. During that time, the proponent submits an application to the regulatory body and submit plans to show what the proponent will do before, during, and after the operation of the mine, including, but not limited to:
* What it will do protect or minimise the impact on the the environment ( e.g. water usage AND effects on local water, fauna, local species, air quality ) — before AND after the mine operation.
* Depending on the country, what it will do engage the local indigenous community — Look at Canada Environmental Agency
During this time, the regulatory agency will receive the application, review it, and may ask for more information or clarification, which goes back to the proponent, the proponent submits again to the regulatory agency … and again and again … until the regulatory agency is satisfied.
This is meant to PROTECT the environment as per the mandate of the regulatory / environmental agency. This is not something you can ‘fast track” regardless of your intention or company name.
2) Even before submitting the proposal to the environmental agency, you need to go from workbench, then to pilot plant, before going full scale production. There is a long history where things were exciting at the workbench level, but then when scaled up to pilot plant, it either was not efficient, or not cost effective. This again takes another 2 years at a minimum, before you decide “Yes, we can economically scale up to production level without going broke”.
Not to mention design the flowsheet, which may have tweaks along the way.
3) As part of item [2], you need to produce, for Lithium at least, battery-grade level lithium chemical ( e.g. Lithium Hydroxide or Lithium Carbonate … not pure Lithium ). Even if the chemical is 99.9% battery-grade, the contents of the impurities on the remaining percentage is VERY IMPORTANT. The impurities depends mostly on the SOURCE … the actual deposit and the process ( how they are removed ). That’s why some areas are more valuable than others.
I could go on and on.
Even assuming Tesla solves item :
[2] — Can move to pilot scale, or maybe even assume they are already secretly in pilot scale for their Lithium plans,
[3] — Able to produce high grade purity Lithium chemicals that Tesla’s battery needs at the workbench level AND at the pilot plant level secretly.
.. then you still have the environmental approval which takes years to get approved .. BY LAW.
Now that is just for Lithium.
Maybe for Tesla, they do not need to be economical at the Lithium mine-level, and Tesla may run the mine at a loss. But for Nickel, which Tesla do not have a deposit for, the nickel miner needs to be economical, profitable, and environmental friendly in order to feed into Tesla’s supply chain.
Thus, you cannot just “turn the tap on” so to speak.
John
I don’t see Tesla looking forward to mine Nickel. So I don’t understand the reference to Nickel in your comment
John
Tesla has received the same level of sarcasm and ridicule every step of the way:
– EVs can never be on parity with Gas cars
– Auto companies building their own battery factories is a fools errand. Decades old battery manufacturers like Panasonic, Samsung & LG have perfected making cells and batteries. No way Tesla can make better and cheaper batteries
– Making their own autonomous hardware? crazy. There are tech companies like Mobile Eye, NVidia, Waymo who are giants in this space
– No startup can send a satellite to space, let alone send a humans to ISS
– Landing rockets is simply not feasible
Yada yada yada