The Industrial editor at the Telegraph:
The opening of America’s first cobalt mine for decades, marked with pomp and a ribbon-cutting ceremony, was supposed to be a step towards better energy security.
Instead, the facility in Idaho, built by Jervois Global, has become a victim of the problem it was meant to solve – reducing the West’s dependence on China for critical minerals, as Beijing seeks to dominate them.
“We are an unfortunate case study,” says Bryce Crocker, chief executive of Jervois. “I’d rather not be, but we are.”
…
Yet six months after opening, Jervois was forced to mothball the new facility as the price of cobalt plunged so low it became impossible to make a profit.
As Tim Newman will tell you, very loudly, the problem was Jervois screwing up the design of the refinery over contaominant elements in the ore. Which then, of course, leads to this:
Even on that score, Jervois’s Crocker sounds a positive note. His company is currently working with the Pentagon to expand the size of the US’s mine and open a potential refinery, helping to make the overall proposal more economically viable.
“We don’t need a 90pc market share, just a share that allows the portion of the product that goes into certain industries, which are genuine and critical, not to be cut off in the event of geopolitical unrest,” he adds.
“It’s an insurance policy. And I guess, since Covid and Ukraine, people are starting to realise that insurance policies matter.”
Plus the usual “Please Mr. PentagonMan, can I have some money”?
This also has the ring of a lot more hope than sense about it:
In Tyneside, one company seeking to do just this is Tees Valley Lithium. From 2026, the company hopes to begin producing lithium hydroxide and carbonate at a refinery near Redcar that will supply UK battery factories.
Paul Atherley, chairman of Alkemy Capital, the company’s parent, says he is “agnostic about the lithium price” to a degree because his company will be seeking to deal with car makers who sell to wealthier customers, not those looking for cheaper, entry level cars.
“We’re targeting that premium market, where anybody who is consumer-facing has to make a value decision about the product and the supply chain that goes into it.
“Customers also want to re-align their supply chains, so they’re not totally dependent on [China].”
You just try charging a substantial premium for local lithium for local people matey. You’re not gonna get far.
But to me the joy is here:
the price of cobalt plunged so low it became impossible to make a profit.
Over the past two years the metal’s value has tumbled from around $19,000 per tonne to less than $5,000, according to data from Benchmark Mineral Intelligence,
No, that’s not the cobalt metal price, which remains in the $25 to $30k per tonne range. Probably one of the salts.
Two years ago, the global price of nickel peaked at around $7,000 per tonne. Now it is below $4,000 per tonne following a significant boost in production by Chinese-owned mines in Indonesia.
Eh?
And, you know, if you’re that far out on the prices – which can be looked up real easy – then the strategy and real story stuff is going to be…..
What is your expert view?
Yep, don’t get the geezer with the lithium mine. Perhaps he thinks that a little union jack on the battery and “Made with British Lithium” is going to impress the punters. “Dug out only with British slave labour.”
Perhaps that’s what we’re missing, an equivalent to Jim’x Red Tractor – red pick and shovel, perhaps.
Well, I’ve mentioned before that the heathen Chinee have mined lots and lots of nice cheap coal to provide the energy to produce nickel in Indonesia.
Oddly enough, the energy from our wonderful cheap windmills is more expensive. So we’re losing market share.
Maybe they don’t believe all that bullshit about global warming??
The Tyne one is a little weird. There’s another company up there trying the same thing – and it’s not too different from Cornish Lithium either. Geothermal waters, Li dissolved in it. In theory should be able to get energy and Li. I know people who make the filters for this – works, no doubt about it. But economic? Well, ummm…. if you can sell the power on a CfD then almost certainly yes. If you can’t, well……
Exxon is drilling in Alabama to extract lithium from brine reservoirs. And usually Exxon are not mugs. (If it was BP or Shell I’d be more suspicious.)
Warren Buffett’s Berkshire Hathaway is extracting from geothermal under the Salton Sea. Already got the power plants, just a matter of the right membrane to be added to the system. There’s no doubt at all that the idea is possible technically. Now, profitable, well. We’ll find out.
“Insurance policy” – makes sense, depending what you believe you’re insuring against, and the price of batteries may not be it.
There’s an option there, probably long-dated, with a premium and all the underlying sensitivities. Do-able.
“ Even on that score, Jervois’s Crocker sounds a positive note”
He’s sounded quite a few positive notes, I particularly liked Common People.
Pentagon is a niche market but it can be profitable, used to work in semiconductors and there’s a market suppling chips using old fab equipment as it has to be made exactly the same way and using same equipment as the original chip design and build. They also have a policy around sourcing US if there is a a slurve that would mean they have to pay the premium
A single mine in the Democratic Republic of Congo, opened by China Molybdenum and backed by state-owned Chinese banks, unlocked another 30,000 tonnes per annum of cobalt alone – compared to the 160,000 tonnes produced globally in 2021
Seems like the Chinese are making partnerships in Africa that produce real value for China, while Western nations are making partnerships that produce negative value for the West via hordes of African migrants.
Two years ago, the global price of nickel peaked at around $7,000 per tonne. Now it is below $4,000 per tonne following a significant boost in production by Chinese-owned mines in Indonesia.
China is ruthlessly removing cost from the global economy. Western nations are ruthlessly adding costs via Net Zero and DEI.
Who will win?
“Typically, the Chinese operations are the cheapest so they’re not the first players to be wiped out of the market when prices are low,” says Jennings-Gray.
“Often, you’ll see Western companies starting to drop out. But the big Chinese players can power through on lower margins.”
China will win. It’s not even a contest, is it? They’re busy getting richer, while the West is busy getting poorer, browner and gayer.
She argues Western firms will have to compete on other grounds, such as quality and carbon emissions, to sell at a premium. “This is meant to be about the green revolution, but often the supply chains aren’t as sustainable as you would like. So that’s a hot topic with automakers and is another driver for different sources of supply.”
The Sino-Russian bloc will enjoy cheap electricity, mass car ownership and widespread prosperity while Westerners grovel and scrimp under the Net Zero permanent austerity regime.
Compost the Greens.
Compost the Greens.
I’d prefer burning them. Alive.
“Fair-trade carbon-neutral gender-equal artisan lithium.”
In Tyneside … Tees Valley Lithium … near Redcar
I expect this geographical ignorance from the Guardian, but really, The Telegraph?
Jimmers – Don’t threaten me with a good time.
The Chinese are already doing so:
China to export deflation to the world as economy stumbles
FT – Feb 8th 2024
Prices of products shipped overseas have been falling at the fastest rate since 2008 crisis
Global investors expect falling prices in China to push down inflation rates worldwide this year, as excess capacity in its slowing economy prompts Chinese exporters to cut prices on goods they sell abroad.
Prices of Chinese exports have been falling at their fastest rate since the 2008 financial crisis, indicating the world’s largest exporter is starting to send deflation outward to countries that have been battling high inflation.
Somebody “save” us from lower prices and more value for your pound!
Yet the American Inflation Reduction Act (cost to “reduce” inflation: $800 Bn) is exactly such a scheme, as are various UK and European bespoke low rate mining projects that hoover up large sums of cash while producing fewer useful commodities than the Fischer–Tropsch process did in 1942.
If we end up in WW3 because the Chinks were giving us too good a bargain, I wouldn’t even be surprised. The First and Second Opium Wars were partly caused by the balance of Western-Chinese trade initially favouring China, which used to insist on being paid in hard currency (silver) instead of in drugs.
Greta, are we the baddies?
Compare and contrast when the civilised world started fracking in quantity, and the arabs were shitting themselves that the price of oil was about to fall through the floor.
All of a sudden, it became illegal to frack in the West.
I rest my case.
Two mates of mine are currently deep into negotiations with the Taliban to exploit vast lithium reserves in the south of Afghanistan.
Tyneside?!?
Redcar is south of the Tees, a little bit more than one whole County away from the Tyne.
Do NOT trust anyone stupid and lazy enough to say Redcar and/or Tees Valley is on Tyneside
@John77
Roger Whittaker lives! We’re just back from a weekend on Tyneside – see you Monday 😉
@ Chris Miller
Only in his songs …
But good illustration! Durham City (not town) is on the Wear, which is the middle of the “three rivers”
See you Monday
I wonder why people in the Business ( and related) are even surprised….
Heinlein featured the chinese as …Flavour… in several of his stories.
They were always a second, unrelated ..element.. in his more….political stories, and also always on the level of “dunno how they do it, probably selling rocks to each other”.
But even in the 60’s a major SF writer noted that if the chinese *ever* got their hands on “space technology” , they could and would perfectly well be Chinese, and get there without anyone really being able to stop them doing so. And thrive.
It’s funny how accurately his dystopian works are actually becoming reality nowadays.
The man either had cracked Nostradamus, a really good crystal ball, or applied the general cynicism towards Politicians and the State which we have here on a level we can only dream of.
When facing modern Clown World I can actually walk to my bookcase, pick up one of his works and read a passage. One on one.
It’s damn scary….