
Tesla Shakes Up Market for Lithium, Other Metals - Osiris30
http://www.wsj.com/articles/how-lithium-defied-the-global-commodities-rout-1462450790
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mchannon
Lithium doesn't weigh much of anything (even compared to oil), so a ton of
Lithium is a LOT of lithium. Since as a commodity it's never traded in
metallic form (too hazardous and energy-intensive to get it there, and not
much market for straight metal, even as an input to battery production). It
tends to be traded as carbonate, so a ton of lithium carbonate still has a
very small amount of lithium in it.

The article completely misses the fact that lithium is not the most important
metal in a lithium-ion battery. More pounds of cobalt are required than are of
lithium (remember, lithium weighs almost nothing).

Lithium traditionally comes from briny lakes and salt deserts like those in
Chile, along with other valuable commodities like Iodine and Nitrate.

Lithium occurs throughout the US in ores like Lepidolite, but it's never been
considered cost-effective to extract it. I've found a way.

~~~
Retric
ED: Sounds interesting, I hope the economics work out.

Current production of lithium is low because demand for lithium is low.
Lithium @ 17 ppm is actually more common than Lead @ 10ppm in the earths
crust.
[https://en.wikipedia.org/wiki/Abundance_of_elements_in_Earth...](https://en.wikipedia.org/wiki/Abundance_of_elements_in_Earth%27s_crust)

PS: 37,000 tonns of Lithium are produced in 2012 vs 5,200,000 of lead.

~~~
maxerickson
I'm not real worried about resource availability limiting production of
batteries, but the lead comparison doesn't seem to provide much information
about how much lithium can be produced over short to medium terms.

I know next to nothing about geology, but a little browsing suggests that it
is easy to find galena and that it is a much more productive ore than the
typical lithium ores.

~~~
Retric
I am really only approaching this as an investor so take this in that context.

My point was, it's not really a question of how much can be produced, but at
what price you can produce it. Right now the market is paying ~6,000$ per
tonne which has been fairly steady if slowly growing over time. With battery's
making up about ~1/3 of the market. At say ~12,000$ per tonne production could
double in well under 5 years.

So, as long as Tesla is happy to pay 12k/tonne they can get more or less as
much lithium as they could ever want. More importantly the price need not
spike anywhere near that much as long as demand is predictable. In 5 years the
price for most commodities is often more or less a function of the delta
between expected demand and actual demand.

If you can get into production at say 4k/ tonne it's no question the market is
growing so at the price is unlikely to crash any time soon. At ~6k/tonne cost
cutting is going to be really important fairly quickly, but it's a reasonable
investment. At 7+k/tonne it's a huge risk which is only worth it IMO if you
can line up a long term contract at a fixed and profitable price or if you can
tightly control costs and only ramp up in case demand spikes (ex: your mining
something else, but you could also exact lithium from your tailing).

~~~
paul_milovanov
Lithium market is a three-company oligopoly.

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oflannabhra
The headline is a misquote. The actual quote, from Musk in the article, is "In
order to produce half a million cars a year…we would basically need to absorb
the entire world’s lithium-ion production."

That is very different that the entire world's lithium production.

~~~
mtgx
Which is just another variation of something he's said since he announced the
Gigafactory - "We'll produce more than the entire world's capacity of
batteries."

~~~
hinkley
And I'm still trying to figure out why everyone thinks this is a big deal.

Lots and lots and lots of companies end up at some point representing 50% of
all sales, products, or activity in their market.

Hell, even Starbucks was opening coffee shops so fast they were targeting
owning half of all coffee shops on the planet.

If he said he needed to quadruple the world output, I might furrow a brow. If
he said he needed 8 times the world supply, I'd think he was nuts.

Double? That's just a really big growth market.

~~~
xenadu02
Indeed; at one point iPod production was consuming over half the world's flash
memory. What happened? They built more factories. Prices of flash continued to
drop aka "a functioning market".

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Robin_Message
In shocking other news: car, utility companies currently absorbing entire
global fossil fuel production, a state of affairs which is set to continue

~~~
coredog64
car makers, utility companies, plastic makers, paint makers, etc. You
underestimate the utility of petrochemicals.

~~~
astrodust
Transportation uses absolutely dwarf others, and many of the non-gasoline
byproducts are only cheap because the gasoline itself is so in demand.

Gasoline itself was once seen as a useless byproduct of kerosene production.

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Eric_WVGG
“that some call ‘white petroleum’”

stop trying to make “fetch” happen

~~~
hinkley
Utah Tea.

Well the next thing you know Elan's a billionaire.

The kinfolk said "hey move away from there!"

They said Californi' is the place you oughta be

So he loaded up the truck and he moved to Beverly

~~~
busyant
Last line should be "built a gigafactory"

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epicmellon
Musk further said, "This is totally not related to why we want to mine
asteroids."

~~~
adwn
SpaceX isn't planning to mine asteroids, that's Planetary Resources.
[http://planetaryresources.com/](http://planetaryresources.com/)

~~~
hga
Someone needs to get their space craft there....

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seltzered_
I don't have wsj access to read the article, but for those looking for some
help in doing the math Danielle Fong has an interesting collection of notes on
calculating lithium ion storage growth (page 19) :
[http://worrydream.com/ClimateChange/refs/DanielleFong-
Growth...](http://worrydream.com/ClimateChange/refs/DanielleFong-
GrowthRateRequiredInEnergyStorage.pdf)

(found via the energy storage section in
[http://worrydream.com/ClimateChange/](http://worrydream.com/ClimateChange/) )

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ck2
There is no shortage of lithium, even the USA has lots of it (owned by
Canadian companies).

It's just they don't want to mine it until the price is much higher.

Kind of like oil vs gas prices.

But I am curious to see what the next level beyond lithium is for compact
power storage. Lithium can't be the end of the line.

~~~
no1youknowz
Where are we with the next-gen battery tech? It's like every 5 years we see
some research lab announce a breakthrough but as if yet no real progress.

You would have thought it would be a priority for Musk to research next-gen
batteries in a really serious way.

~~~
goda90
Heck, I'd say I see an article about new battery developments multiple times a
year.

I wonder if the delay has as much or more to do with economics than actual
research and development. It might not be in the best interest of a lot of
players, whether that's battery manufacturers, or device manufacturers, to
produce something that has improved longevity if that means fewer sales due to
batteries wearing out.

~~~
extrapickles
Its economics in the manor that its non-trivial and time consuming to produce
a physical good. A existing factory can take 6+ months to retool, especially
if you don't want to interrupt its existing output much.

Also a bunch of the developments don't pan out for various reasons, like not
being able to get the yield high enough to be worth while, requires large
amounts of unobtainium, have very restrictive operating requirements not
mentioned in press release (such as a 140F auto-ignition temperature), etc.

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portman
Article is actually titled "Tesla Shakes Up Market for Lithium, Other Metals"
which is less sensational and more accurate.

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olivermarks
[http://www.extremetech.com/electronics/149779-sodium-air-
bat...](http://www.extremetech.com/electronics/149779-sodium-air-batteries-
could-replace-lithium-air-as-the-battery-of-the-future)

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kilroy123
I don't really see the problem. It's simple supply and demand. Once the
gigafactory is operation and demand goes up, supply will also go up in time.

I'm just worried costs will rise so much, the 35k for the Tesla model 3 will
rise as well.

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Zekio
Wasn't there recently an article that stated lithium had already tripled in
price.

And if it reached a quadruple it would become cost effective to extract it
from the ocean?

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duaneb
How viable is lithium recycling?

~~~
mizzao
There are so many discarded batteries from old electronic devices. Even
chemical separation must be more effective than digging it out of the earth,
right?

~~~
mjevans
You'd probably assume liability for all of the other stuff that's around that
thin lithium lining.

It must be cost, because I can't think of any other reason that we don't have
micro-machine dis-assemblers for slowly picking apart our garbage in to neatly
binned resources.

