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New Age Metals Inc. $ – Who Are Tesla’s $TSLA Lithium Suppliers? $ $ $ $ $

Posted by AGORACOM-JC at 3:19 PM on Tuesday, March 26th, 2019

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Who Are Tesla’s Lithium Suppliers?

Lithium stocks have been volatile in recent years, though the electric vehicle revolution means that demand for the metal should be strong for many years.

  • Appetite for lithium is becoming increasingly ravenous as the electric-vehicle (EV) pioneer ramps up production of the Model 3, its first mass-market vehicle
  • Lithium is a silvery-white metal used to make the lithium-ion batteries that power EVs and other products, including the energy-storage products that Tesla and others produce.

  Beth McKenna (TMFMcKenna) Mar 26, 2019 at 9:30AM

Tesla‘s (NASDAQ:TSLA) appetite for lithium is becoming increasingly ravenous as the electric-vehicle (EV) pioneer ramps up production of the Model 3, its first mass-market vehicle. Lithium is a silvery-white metal used to make the lithium-ion batteries that power EVs and other products, including the energy-storage products that Tesla and others produce.

Tesla and other companies that need lithium in their manufacturing processes have been eagerly inking longer-term supply agreements with producers to ensure they’ll have adequate quantities. That’s because lithium supply has been having a hard time keeping up with demand, thanks largely to the rising popularity of EVs. 

This dynamic resulted in lithium prices soaring in 2016 and 2017, along with the stock prices of producers, such as diversified chemical giants Albemarle (NYSE:ALB) and SQM (NYSE:SQM). Lithium prices started falling off their peaks last year, which along with concerns about China’s slowing growth and too much new production capacity coming online, contributed to stock prices plummeting. Supply, however, remains relatively tight.

So who are Tesla’s lithium suppliers? And do any of them look like potentially good investments?

Tesla Model 3. Image source: Tesla.

Tesla’s lithium suppliers

According to company press releases and/or published reports, the following companies have or have had some type of agreement in place to supply Tesla with lithium hydroxide. (This list may not be all-inclusive.) 

Company Headquarters Tesla Agreement Date
Ganfeng Lithium China    Sept. 2018
Kidman ResourcesAustralia May 2018
Pure Energy MineralsCanadaSept. 2015
Joint venture partners Cadence Minerals and Bacanora Minerals  U.K. and Canada, respectivelyAug. 2015

Ganfeng is China’s largest producer of lithium and the world’s second- or third-largest producer (depending on source) behind the United States’ Albemarle, and perhaps also behind Chile’s SQM. In September, Ganfeng revealed that it has an agreement with Tesla to supply the EV maker with 20% of its annual lithium hydroxide production through 2020, which could be extended by three years. Shares of Ganfeng are not listed on a major U.S. stock exchange, nor do they trade over the counter (OTC) in the U.S. Thus most U.S. investors looking for exposure to the lithium realm should explore other options.

Kidman Resources has a 50/50 joint venture with SQM to develop its Mt. Holland lithium project in the Earl Grey hard-rock lithium deposit in Western Australia. In May 2018, Kidman entered into an offtake agreement with Tesla “for an initial term of three years on a fixed-price take-or-pay basis from the delivery of first product,” according to Kidman’s press release, adding that the agreement “contains two 3-year term options.” The company said that the agreement “equates to less than 25% of Kidman’s portion of initial nameplate production for the first three years from the refinery.” Kidman’s shares are listed on the Australian Securities Exchange (ASX) and also trade over the counter in the U.S, but the OTC shares are extremely thinly traded, which means volatility could be considerable. For this reason, along with the fact that Kidman is a developmental stage company that’s not profitable, the stock is not a good fit for most U.S. investors.

Pure Energy Minerals is developing the Clayton Valley South Lithium Brine project in Nevada, which is located adjacent to the only producing lithium mine in the U.S., Albemarle’s Silver Peak lithium brine operation. The project is roughly 200 miles away from Tesla’s giant lithium-ion battery cell factory, the Gigafactory 1. Indeed, when Tesla chose Nevada for the location of its first Gigafactory, industry watchers speculated that the Silver State’s plentiful lithium supply was one main reason. According to Pure Energy’s Sept. 2015 press release, “provided that Pure Energy meets certain terms and conditions … the Agreement establishes a commitment for an annual purchase volume of product over a period of 5 years by Tesla and/or its authorized purchasers.”  

Cadence Minerals (which was named Rare Earth Minerals until March 2017) and Bacanora Minerals are JV partners in the Sonora Lithium Project in Northern Mexico. In Aug. 2015, they signed a conditional long-term lithium hydroxide supply agreement with Tesla, according to published reports. Neither company’s stock is listed on a major U.S. stock exchange, nor is either company profitable on an operating basis. For these reasons, their stocks are not good choices for most U.S. investors. 


Tesla’s Reno ‘Giga-Factory’ choice steps company toward mass produced EV

Posted by AGORACOM-JC at 9:38 AM on Friday, September 5th, 2014

Proposed 10k-sq-ft facility projected to be running by 2017 for Model 3 launch.

September 4, 2014


RENO, Nev. — To bring electric cars to the masses, Tesla Motors will transform an expanse of desert where pioneers passed on their way to the California Gold Rush and wild mustangs still roam the hillside.

This time, the rush will be in Nevada, which Tesla chose over four other states as the site for a $5 billion factory that the carmaker projects will crank out enough high-tech car batteries to power 500,000 vehicles annually by decade’s end.

Nevada’s elected leaders still must deliver on the economic incentives they’ve promised, but if they do as expected, Tesla will open its massive factory at an industrial park outside Reno, according to a person familiar with Tesla’s plans. The person spoke on condition of anonymity because no official announcement had been made. An announcement was scheduled for Thursday afternoon at Nevada’s Capitol.

U.S. Senate Majority Leader Harry Reid, D-Nevada, acknowledged Thursday at his Clean Energy Summit in Las Vegas that Tesla was coming to Nevada, and said he had spoken with Nevada Gov. Brian Sandoval about it.

A state synonymous with gambling hit the jobs jackpot — Tesla has said the factory will employ about 6,500 people. That’s a welcome jolt for a tourism-based economy particularly hard hit during the Great Recession.

Tesla’s choice of Nevada over California, Texas, Arizona and New Mexico takes it a big step closer to mass producing an electric car that costs around $35,000 and can go 200 miles on a single charge. That range is critical because it lets people take most daily trips without recharging, a major barrier to the widespread adoption of electric vehicles.

The “gigafactory,” as Tesla calls the project, would bring the cost of batteries down by producing them on a huge scale. Its approximately 10 million square feet, equivalent to about 174 football fields, would be running by 2017. That is when Tesla hopes to introduce its Model 3,

At present, demand for electric vehicles is small.

Through August, automakers have sold just over 40,000 fully electric cars this year, up 35 per cent from a year ago, according to the auto website Factoring in plug-in hybrids, electric vehicles still account for just 3.6 per cent of all new car sales, a slight drop from last year. Still, government fuel economy standards that will require new cars and trucks to average 54.5 miles per gallon are expected to drive sales.

Gov. Sandoval’s office wouldn’t comment Wednesday on the gigafactory news, saying only that he would make a “major economic development announcement” Thursday. A spokesman for Tesla Motors Inc., based in Palo Alto, California, said company representatives would be at the Capitol in Carson City for the announcement but offered no other details.

Sandoval has declined to discuss incentives he has offered Tesla. Based on CEO Elon Musk’s public statements, the incentives likely total at least $500 million. The governor would have to call a special session of the Legislature to approve tax breaks, grants or other incentives of that magnitude.

This spring, Musk announced that the company would take the unusual step of spending millions to prepare sites in two states _ or perhaps even three _ before choosing a winner. The person familiar with Tesla’s plans told The Associated Press a second site still will be prepared, in case Nevada is unable to deliver the incentives it has promised, or possibly to build a second factory.

Tesla has done excavation and other site-preparation work at the Tahoe Reno Industrial Center, where it plans to build the factory, but had not publicly committed to building in Nevada until it tested what economic incentives other states offered. The centre is about 15 miles east of Sparks, a Reno suburb founded as a railroad town more than a century ago.

Aside from low tax rates and business-friendly workplace laws, Nevada offered plenty of sun and wind to generate “green” power. The industrial park is only about 200 miles along Interstate 80 from Tesla’s lone auto assembly plant in the San Francisco Bay Area. It’s also near a deposit of lithium, an essential element to produce the battery cells.

Reid said that ready supply was an important part of Nevada’s bid, and pointed to a $28.4 million Department of Energy grant in 2010 for a lithium carbonate and lithium hydroxide plant in Silver Creek, Nevada.

Competition for the factory has been intense among the states, which bid up their incentive packages in private negotiations with Tesla.

In California, where Tesla has its headquarters and manufacturing plant, the decision to build in the state next door stung.

“Tesla was using their business savviness to get states to compete against one another,” said state Sen. Ted Gaines, R-Roseville, a principal proponent of the project. “It’s just that I felt California had the inside track given our history of working in partnership with Tesla.”


Associated Press writers Ken Ritter in Las Vegas, Juliet Williams in Sacramento, California, and AP Auto Writer Tom Krisher in Detroit contributed to this report.