High Voltage: Global lithium-ion battery gigafactories in pipeline hits eyewatering 4TWh
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Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel and vanadium.
Only four battery gigafactories — super-sized producers of lithium-ion battery cells — were being planned in 2015.
In July 2021 that number hit 232 when Nissan officially confirmed a second ~$US622m lithium-ion battery plant in Sunderland, UK. The plant will have an initial annual capacity of 9GWh, with potential on-site for up to 35GWh.
Roskill’s Global Li-ion Battery Gigafactory Dataset now shows global Li-ion battery capacity in the development pipeline has exceeded 4,000 GWh.
Mammoth numbers like this need a lot of raw materials, it says.
“The forecast strain on raw materials markets may precipitate supply chain issues if investment in projects and expansions is not incentivised,” Roskill says.
That’s why battery makers are now actively participating in the mining and processing of raw materials “through co-developing and equity investment as well as deepening their existing business relationships with long-term purchase agreements”.
Recent examples of this include Piedmont Lithium’s (ASX:PLL) supply deal with Tesla, and battery maker LGES and steel producer POSCO’s investment in nickel-cobalt play Queensland Pacific Metals (ASX:QPM). There will certainly be many more to come.
Here’s how a basket of ASX stocks with exposure to lithium, cobalt, graphite, nickel, and vanadium are performing>>>
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While the explorer’s enterprise value is pretty much covered by two promising gold exploration projects on Kalgoorlie’s doorstep, Garimpeiro reckons Essential’s lithium upside is significant.
“Garimpeiro’s interest is in the about-to-start drilling program at Essential’s Pioneer Dome lithium project, 150km from Kalgoorlie,” he writes.
“It already sports an 11.2 million lithium resource grading a handy 1.21% lithium oxide from limited drilling campaigns in 2019/2020.
“Essential makes the point in a presentation on the ASX platform that its lithium peers command a value of $US291/t for their lithium resources while on an EV basis, its valuation metric sits back at $US75/t.
“The upcoming drilling campaign could close the valuation gap in a hurry, such is the renewed interest in lithium exploration results.”
An electromagnetic (EM) survey has identified a strongly conductive ‘body’ – typical of well-developed massive to semi-massive sulphide mineralisation — 1.8km south of the historic Nepean nickel mine in WA.
EM surveys map sub-surface changes in electrical conductivity and are useful tools for finding nickel sulphides.
This high-priority drill target – estimated at 60-100m vertical depth with a strike length of 120m — “will be tested immediately” with three drill-holes ranging between 150-250m depth, Auroch says.
One of June’s biggest movers, lithium mine developer Prospect has also started July on a strong note.
Its Arcadia project in Zimbabwe has a high grade JORC mineral resource of 43.2 million tonnes at 1.45% lithium oxide and 119 parts per million tantalum pentoxide for 61.5 million tonnes of lithium oxide and 11.3 million pounds of tantalum pentoxide.
The project’s DFS was updated in 2019, outlining a low-cost project with a pre-tax internal rate of return of 71% and payback within 18 months of first production.
The DFS mapped an estimated 15.5-year initial mine life – a substantial project of note in a country where lithium potential is largely untapped.
The project has offtake partners secured and with its pilot plant up and running looks to be one of the most advanced ASX-listed lithium projects.