The Devil is in the Details...

Most investors in Battery related projects have difficult decisions to make, especially as they are often at the mercy of project owners’ Corporate Presentations, promising all kinds of Utopian grandeur.?

A lack of technical expertise, combined with over-optimistic, unrealistic, subjective market analysis, usually supplied by the marketing agencies of the project owners, a.k.a. PRA’s (price reporting agencies), pressure the investors subliminally into submission.?

In certain regions, the numbers stop making sense, as multi-Billion USD investments are seemingly required for many FIRST PHASE developments, usually by start-ups, in large-scale battery material production.?

As certain economies have access to unlimited sources of funding, colloquially known as debt, and no real need to be concerned about any mandatory debt settling in full, (should things not work out as planned, or dreamt) unprecedented investments are the order of the day.

~3 Billion USD for a Lithium project is not a problem in the Wild West, when it’s a matter of national security.

Print the cash now !! ?and give them 25 years to pay it back also.

Thacker Pass Lithium project in Nevada, USA, requires about $2.93 Billion Capital Investment,

to establish a total nominal production capacity of ~40 ktpa of lithium carbonate over the 40-year project life. That’s phase 1 only.?

Sound fantastic, doesn’t it? All these big numbers…so very American.

But, wait a minute,

Is it at least a good investment?

you now,

Does it make sense, other than for the project owners, ?dreaming about Billions in Profits…

What about that ESG stuff? ?

.… ?Pollution, Water requirements, GHG/Carbon Emissions, Waste, Energy consumption, Soil and water contamination, Impact on local communities…

?What is the total cost, not just the “dollars” ?

?How does an investment in a lithium project compare to other essential battery materials?

To produce a NMC based battery, the Western “darling”, there are 4 essential active elements in the cathode: ?lithium, cobalt, nickel and manganese.

If one of the four elements are missing, you will build zero NMC batteries, until you find that a new source for that element.

Remember the chip shortage from not too long ago, and millions of cars were not built for quite some time? It cost the global economy Billions, because of little chip being in short supply.

NMC811 battery cathodes have about 7.1% Lithium & 5.6% Manganese contents,

therefore considering that these are very similar %, and thus equally critical in whether you can make such a battery,

and also, ?the fact that the “battery” doesn’t know or care about the costs involved…

The combination of these elements form a “team” and function as a whole to a certain performance level.

Let’s see how clean (or dirty) these materials are, and if the direct investors (Venture Capital Firms, Private Equity Firms, Government Funds) have performed their fiduciary duties on behalf of the people who’s money they are investing.

?What is “fiduciary duty” ?

“Fiduciary duty exists to ensure that those who manage other people's money act in the interests of beneficiaries, rather than serving their own interests. It requires investors to incorporate all value drivers, including environmental, social, and governance (ESG) factors, in investment decision making.”

According to the UN PRI, the world’s leading proponent of responsible investment.

So, let’s look at some carbon emission numbers, to compare the emissions from battery grade Lithium carbonate production from this project specifically, with same grade Manganese sulphate, as well as some numbers for cobalt- & nickel-salts for perspective.

This is almost to be expected by most, and it seems about right.

Naturally there will be projects with higher numbers, for most people this will be in China, and the lower numbers will be in Europe and North America.

Higher carbon emissions is expected for the materials which are more scarce and which grades are usually quite low in the natural minerals, and we are talking less than 1% grades, on average for lithium-, cobalt- and nickel minerals, from the ground.

Am I correct ?

However,

“The Devil is in the Details”?

And this is where things get really interesting.

On the lithium side, for the hard rock resources, spodumene mineral ore concentrate, will have about 6% Li2O (not Li),

meaning the actual lithium contents is only 6% * 46.45% = ?2.8% lithium contents.

LCE is lithium carbonate equivalent, right ?

?What do you think the lithium content is?

LCE has ~18.8% lithium contents.

Cobalt sulphate heptahydrate is at ~ 21% Co.

Nickel Sulphate is at ~ 22.%?Ni

Whilst Manganese Sulphate is at ~ 32.5%

This is the detail that is being hidden from you, as this changes the ball game substantially.

There are many more ways where the commonly used terminology, isn’t what you think it is.

Let’s look at the revised chart with carbon emissions of the different battery materials, on an actual metal contained basis and see the difference.

Suddenly, a different story.

I asked some questions recently: ?

• "How much carbon emissions does an investment ensure?"
• When that battery material is put in a battery, what is the carbon debt?
• How much carbon needs to be saved by the use of this battery in a EV, or whatever else it’s used for?

• If there is an investment of say, 100 million USD, how much carbon emissions does that investment make possible, before it is “earned” back? ?
• Are certain materials merely piggy-backing on others because they will be forever indebted?
• Do investors know the difference between investing in a lithium project and a manganese project?
• Dollar for dollar, is a 8x increase in carbon emissions between 2 projects for different materials what investors would want, IF they had known beforehand?

A lithium project producing 60,000 mt of LCE, makes available a mere 11,272 metric tonnes of lithium annually, on a metal contained basis, but can cost almost 3 Billion USD in CAPEX.

Granted, the Thacker Pass project claims 40% lower emissions that their peers,

but it still remains ~5 times higher emissions compared with battery grade Manganese.

?

Two Manganese projects,

producing DOUBLE the tonnage of manganese battery materials EACH, can be one TENTH of the CAPEX,

and you will facilitate a similar quantity of battery storage.

But more importantly,

ONLY about 15% of the total production carbon emissions, compared to lithium carbonate production.

A final note on the carbon emissions of various battery grade manganese projects in different regions.

In Europe, the claimed emission number for the Euro-Mn-project ?in the Czech Republic, is about?4.8?kg CO2eq / kg battery material produced vs the industry average of about?4 kg CO2eq / kg?HPMSM produced, so 20% higher.

They plan to use renewable energy in the future, which may reduce their emission severity, but only when they commission an on-site, dedicated renewable energy source. There are so many brown coal power plants in Eastern Europe, I want to see if the “plans” materialise first.

The average in China, according to the Element 25’s research, is about 5?kg CO2eq / kg?HPMSM produced, but I would want to see the carbon LCA results of a new HPMSM project first.

I know there has been some flow-sheet- and equipment improvements by the Chinese Mn-battery material producers, to greatly reduce energy consumption in battery grade manganese processing.

Updates from Sinoland soon. I have my ear to the ground !