Read: April 2024

Inspiration: Listened to the author on a podcast and wanted to learn more about the mining/rare earths industry

Summary

Written with the help of ChatGPT, below is a brief summary to understand what is covered in the book.

Unedited Notes

Direct from my original book log, below are my unedited notes (abbreviations and misspellings included) to show how I take notes as I read.

Lithium ion batteries invented 1977 by US scientist Stanley Wittingham at Exxon, but Exxon passed on the tech at the time as gasoline ruled the day, took until cobalt added to battery composition for safety did Japan’s Sony get patent in 1990 for lithium ion batteries, EV battery consists of 4 parts: anode, cathode, electrolyte, and separator, anode is graphite, cathode is lithium plus mix of nickel/cobalt/aluminum/magnesium, electrolyte b/w anode and cathode is solution of lithoum, separator of plastic between solution and anodes/cathodes, then copper wiring moves power from battery into motion, to power car: lithium ions flow from anode thru separator to cathode (reversed to charge), many kg’s of metals into batteries, Chile and Australia largest lithium producers but require china to process into useable form for EVs, china is worlds largest cooper consumer (from chile, peru, others), indonesia is worlds largest supplier of nickel but increasingly keeping for own supply chain, US lacks nickel refinery and cooper production dropping, congo has largest supply of cobalt (prevents EV battery erosion) but use child labor, US has 1 rare earths mine and no processing facilities—china leads across the board, US wants to go green but vast majority of key mines/gigafactories in china as US gvt denies new mines for environmental reasons—lithium, rare earth and copper production are essential for US, US mines stopped by trump and biden alike, US to produce 3% of worlds lithium needs by 2030 despite having 24% of global reserves, cannot go green w/o new mines or otherwise vulnerable to china control of supply, lithium discovered 1817 but only niche use cases for more than a century and a half, from rock with some connection to ancient volcanoes, Li is the lighest element which is key as can move electrons fast, Rhyolite Ridge is in Nevada—2015 a group of Australian investors took on land hoping for gold and cooper but really had lithium—146mm tons, Calaway was key researcher to discovery/use—and invested in Rhyolite and took over board, company Calaway led called “ioneer”, copper essential to all green energy devices, for 5k years copper was only metal known to humanity before gold, ’22 annual copper consumption 25mm tonned—2050 to be 53mm tonnes (don’t have this quantity, could cause wars), Resolution Copper mine in Arizona late 90s owned by Rio Tinto and BHP—controversial mine on sacred native lands, would require amt of water that could power 168k homes for 40 years, still not yet gotten permits in 20 years and now on ice, would have been able to fulfill 25% of annual US cooper needs at the time late 90s, by ’21 spent 2bn with 0 copper produced—touted jobs to come to get local support but proved incredibly difficult to materialize, it is about deciding what is good mining–IRMA is body dedicated to certifying but slow momentum, Tiffany’s CEO Kowalski big push in safe sourcing/mining–works with Earthworks/IRMA, if US does not create new mines then other countries do such as Chile, Peru, Congo etc with bad conditions and China-backing and US loses independence in “green” future, new mines run into environmental hurdles, native tribe/religious issues which need to be sorted in US, Biden admin has been contradictory in policy towards new mines but also energy independence (seek to appease all groups–natives and miners, which cannot), rare earths=17 metals on periodic table that are expensive, difficult, and environmentally dangerous to produce, not actually rare in terms of abundance, a part of everything in small amts from a-bomb to wind turbines to fighter jets to computers and EVs, Molycorp in CA supplied 70% of global rare earths 1980s as US gvt fund scientists but China then accelerate its domestic rare earth capabilities 90s/00s, Molycorp location was called “Mountain Pass”—deposit discovered in 1949 on CA side of border b/w vegas and LA, rare earths first discovered 1788 Sweden, big in electricity and movie projectors for brightness in 30s/40s, interesting dynamics politically recently–in Alaska, trump/republicans staunchly against mining what would be one of largest copper deposits in US b/c of impact to fishing vs. dems more willing, republicans not favor “climate” policy but pro environmental conservation in this case, notoriously cumbersome permitting process along with political pushback results in $500mm+ dead money in Alaska for company trying to get approval, would get some incremental positives when start 2014 obama, then killed under trump, 2020 china had 23% of world lithium but controlled 80% of EV battery market, tesla look to change this, plan for lithium plant in Gaston County in North Carolina with partner Piedmont Lithium—but had to buy farmland from locals, locals view was not an opposition to american lithium but not in their backyard, Piedmont had been buying up land since 2017 well before tesla partnership, Piedmont had roots in Yemen gold mining but disrupted by civil war and pivot/change name to US, Piedmont needed at least 3k acres of contiguous land for mine, took deal with tesla before had mine permits, still in limbo as of 2023, Freeport McMoRan became largest miner in US in 2007 when bought the larger phoenix-based Phelps Dodge for 29.7bn, Phelps owned Morenci—town 200 miles east of Phoenix with copper mine that is largest mine for any metal in North America, Freeport then bought 2 oil/gas co’s for $20bn which was odd but thought diversify but 2016 oil prices plummet and Freeport down 90%, thought would bankrupt, Icahn come in as activist to Freeport to spark asset sales, sold oil assets in CA, stake in Morenci to Japanese, sold stake in Congo copper and cobalt mine to Chinese company—sale took Freeport from largest cobalt producer in Congo to none and instead China step in, by 2020 15 of 19 Congo’s cobalt mines financed/owned by Chinese companies, Xi Jinping keen to control cobalt—key for EVs to ensure batteries do not overheat and extend life, 1/3 of congo mining done by “artisinal miners” aka amateurs and lots of children dig under their homes/in woods, not proper mining tools/biz, Chinese co’s like Molybdenum encourage, massive issue in US mining is lack of young people interested vs china has lots, 2023 Freeport performance/copper production fell simply due to lack of workers, critical industry is recycling of materials/batteries as can be viable and require no further digging but nascent industry, LiCycle as one company in recycling space, Bolivia estimated to hold most lithium in the world, Bolivia has history as fueling Spanish empire wealth via mountain of silver mid 16th C, Lithium Triangle=Bolivia, Chile, Argentina, Bolivia has lion’s share, Bolivia has natural resource curse where mineral wealth yet one of poorest countries in the world as others exploit, Bolivia named after Venezuelan Simon Bolivar who freed from Spanish empire 19th C, but then wars and lost 1/2 lands to Chile, Arg, Peru, Brazil, Paraguay, Bolivia has deep distrust if neighbors, Chile cut off access to sea via war, Bolivia reserves are largely in southwest at border with Chile, Evo Morales was first indigenous born president of Bolivia 2005–keen on protecting lithium, a socialist as well, tried to do indepedently but fail given lack of know how, 2017 finally bring in German company to help, Chile sped ahead in actual extraction of lithium, 2019 huge protests vs Evo as many thought he was selling out the country cheaply, Chinese co’s had struck deals too, 2021 new president and initiate a “bake off” for DLE tech contractors (Direct Lithium Extraction), china and german contract both cancelled w/o reason or warning by bolivian gvt, today Chinese CALT win in Bolivia, Biden agency conditional loan for Reno Rhyolite Ridge project but pending permits, Biden deny minnesota project Twin Metals on environmental concerns, no consistency and constant imbalance b/w green transition goals but mining denials in US, Lithium OPEC forming as Chile, Arg and Bolivia nationalize (but China persist in Bolivia and beyond)

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