Chile’s left-wing government has nationalized its important lithium mining operations, casting doubts about the supply from the world’s second largest lithium producer behind China. Reuters reported Tuesday (Apr. 25), “Chile’s leftist President Gabriel Boric last week announced that control of the country’s vast lithium operations would over time be transferred from Albemarle and SQM (SQMA.SN) to a separate state-owned company.” Albemarle (ALB.N) is a U.S. company.
Reuters commented, “The move shocked investors and foreign companies and raised concerns about the production and supply of lithium, a metal essential in electric vehicle batteries. Chile has the world’s largest lithium reserves.” Citing ANZ bank, the Wall Street Journal said, “The pace of transition to the green economy could be slowed because of increasing resource-nationalism, with countries such as Chile moving to nationalize its lithium assets, a potential headwind for green uptake.”
Separately, Reuters reported, “Chile’s state development office Corfo said on Tuesday it met with U.S.-based miner Albemarl to discuss the South American country’s plan to nationalize the lithium industry.”
Axios commented that Chile’s move is “part of a wider trend of countries looking to exert more control of materials in high (and growing) demand as the world shifts to more climate-friendly tech. For instance, Mexico nationalized lithium mining last year….”
Tesla, celebrating low lithium commodity prices, says it is concerned about refining capacity of the crucial mineral for electric vehicle batteries and large-scale electric storage. Manufacturing Dive reported, “Tesla saw commodity prices for minerals, including lithium, begin to drop in Q1, the company said on its Q1 earnings call last week. But the ‘choke point’ in the supply chain is not in the price of the material but the capacity to refine it, CEO Elon Musk said, and if production can continue to match demand.”
Tesla announced this month that it will start construction in May of a $375-million lithium hydroxide refinery in Corpus Christi, Texas, Tesla executives said earlier this month in a call with investment analysts. Press reports in Texas said the company had broken ground on the site in March, but there was no way to confirm or deny those accounts as Tesla shut down its media operations in 2020. Tesla filed paperwork in September for what it said will be the first of its kind plant in North America. Commercial operation is planned for 2024.
Musk said, “We will have, by far, the most lithium refining capability and the most cathode refining capability in North America,” the CEO said. “So, can other people please do this work? That would be great. We’re begging you. We don’t want to do it. Can someone please?”
China, the world’s largest lithium producer, is seeing soft prices firm up, according to OilPrice.com. The online news service said on Wednesday (Apr. 26), “After falling to their lowest level in 18 months in April and shedding some 70% from peak prices in November last year, lithium prices in China ticked up slightly …for the first time in over a month, signaling a potential recovery in battery demand growth.
“Based on data from Trading Economics, lithium carbonate prices slipped below CNY [Renminbi] 175,000 per tonne this month due to strong supply and weak demand, while analysts have predicted a surplus for 2023.”
Bloomberg reported, “Lithium prices in China halted a five-month slide on signs that demand growth among battery makers may finally gather pace.” The article quoted non-ferrous metals analyst Jesline Tang, at S&P Global Commodity Insights, “There’s some pickup in buying from traders who think prices have bottomed, which supported lithium this week. There’s also talk of declining inventories at battery makers, which could drive restocking activity.”
Bloomberg added, “There is also acquisition activity in the industry, with top U.S. producer Albemarle Corp. seeking to buy Australian miner Liontown Resources Ltd. in recent months, signaling optimism over prices in the long term.”
General Motors has announced the end of the Chevy Bolt EV and the Bolt EUV, the mainstays of the giant automaker’s EV lineup, at the end of the year. The two Bolt models were by far GM’s best-selling electric vehicles and the lowest-priced EVs in the U.S. market, with sticker prices in the $25,000 range, and much less than that with the full $7,500 tax credit available under the Biden administration’s climate legislation, the Inflation Reduction Act.
The Bolt made its market debut in 2016 and, after some initial problems with battery fires, has become a solid seller and has received good reviews, particularly for its fit and finish, befitting a historic automaker. Tesla has faced many complaints about fit and finish, although its technology is first class.
The reason is the Bolt is bolting the market is that GM is transitioning to a full EV fleet, using the company’s new, innovative lithium ion “Ultium” battery. Unlike Tesla’s cylindrical 4680 battery, GM’s Ultium uses pouch cells that can be stacked horizontally and vertically, providing a flexible platform for the car body and internals. “The Ultium system is a completely new chemistry with a completely different form factor for the batteries, module, electronics, and communication system,” Jesse Ortega, General Motors architectural chief engineer, said. “So there are no plans to incorporate the Ultium system into the Bolt or Bolt EUV.”
GM’s new entry-level EV will be an electric version of its standard SUV, the Equinox, with a base price of about $30,000. The gas version of the Equinox is a traditional SUV, as opposed to the compact Bolt line, and is generally well regarded. The EV version is likely to be a solid seller.
–Kennedy Maize
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