auto revolution: rise of the lithium ion battery megafactories€¦ · 2005-2008 2010-2014...

Auto Revolution:

Rise of the lithium ion

battery megafactories

Toronto, Monday 24 April 2017

Benchmark World Tour 2017

Simon Moores | Managing Director

Benchmark Mineral Intelligence, UK

www.benchmarkminerals.com

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Price Assessment Subscriptions (Raw Materials)

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Lithium Graphite

Cobalt

Benchmark Membership

Tech Industrialists evolve, force convergence of multi billion dollar industries

Batteries

Auto, Tech & Energy Converge

Era of the semi mass market EV begins

Bolt (60kWh lithium ion)Model 3 (60-65kWh lithium ion )

LEAF 2017 (60kWh lithium ion )

What battery demand can we expect?

Lithium ion battery demand expectations by 2025 (GWh)

0 100 200 300 400 500 600

*BNEF Forecast @ 240GWh for EVs & Stationary of 240GWh + Benchmark’s mobile technology forecast of 60GWh

2016

70-75% EVs

Benchmark’s 2025 lithium demand based on battery forecasts

0 100,000 200,000 300,000 400,000 500,000

2016 2020

Tonnes

0 100000 200000 300000 400000 500000 600000 700000

Benchmark’s 2025 graphite demand based on battery forecasts

2016 2020

Tonnes

0 50000 100000 150000 200000

Benchmark’s 2025 cobalt demand based on battery forecasts

2016 2020

Tonnes

Lithium ion batteries

Rise of the lithium ion megafactories continues…

0

20000

40000

60000

80000

100000

120000

Annual Cap 2016 (MWh) Expanded Capacity (MWh)

100GWh

35GWh

20GWh

30GWh >>> 228GWh

Lithium in 2016: 222GWh’s worthCobalt in 2016: 226GWh’s worth Graphite Anode in 2016: 190GWh’s worth

0% 10% 20% 30% 40% 50% 60% 70%

China

US

Asia (ex-China)

Europe

The new lithium ion industry is a China story

Tesla is still important – business strategy/vertical integration

New plants still being constructed in Japan / Korea, but focus on China

Europe is slow

Megafactories by region

Lithium

Lithium Prices

$12,313/tonne (March 2017) $17,000/tonne (March 2017)

Lithium HydroxideLithium Carbonate

-40%

-20%

0%

20%

40%

60%

80%

100%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017(f)

Lithium Carbonate (ex-China) Price Trend: Average Y-O-Y

1 Year where prices declined in a decade

Source: Benchmark Mineral Intelligence Data, Lithium Price Assessments

Lithium Price Performance Year by Year

2006 2016 2020

Evolution of lithium’s end markets

67% 42% 22%

Lithium ion

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

2005-2008 2010-2014 2015-2016 2017-2020

Lithium Carbonate Lithium Hydroxide

Lithium Carbonate & Lithium Hydroxide: Long Term Averages (Nominal)

Source: Benchmark Mineral Intelligence Data, Lithium Price Assessments

Lithium Price expectations

• No huge oversupply of lithium

• 5 year growth trajectory: 12-15% a year

• Lithium Carbonate & Hydroxide Prices to remain high for the medium term

• No price crash

• Spodumene to fill the 2017-2018 supply deficit

• China has 30% excess capacity

• New brine resources 2020 and beyond

• M&A and JVs to continue

• Albemarle, Tianqi, Ganfeng most aggressive

Lithium trends to watch…

Graphite

Graphite Prices

$2,800/tonne (March 2017)

Uncoated Spherical Graphite

$780/tonne (March 2017)

Flake Graphite -100 mesh, 94-95%

Feedstock

Evolution of flake graphite’s end markets

2006 2016 2020

Lithium ion

0%

16%35%

$0

$5,000

$10,000

$15,000

$20,000

$25,000

2009-2013 2014-2017 2018-2020

CPSG Low CSPG High

Coated Spherical Graphite: Long Term Averages (Nominal)

Source: Benchmark Mineral Intelligence Data, Lithium Price Assessments

Graphite Price expectations

• 5 year growth trajectory: 13% a year

• Natural graphite anodes to increase market share over synthetic• Supply issue, improving quality, lower cost

• Synthetic will operate in a high quality niche

• CO2 footprint becoming a consideration

• Coated Spherical Graphite to become cheaper• From $12-16/kg today to sub $8/kg

• Silicon to not be a major substitution factor medium term• 3-6% additive to improve capacity

Graphite trends to watch…

Cobalt

Cobalt – 5 key stats

• 98% of cobalt mined as a byproduct of copper and nickel

• Lithium ion batteries do not contain cobalt metal but rather cobalt chemicals

• Demand for cobalt chemicals are driving price rises, not metal

2016 Global cobalt mined supply 2016 global cobalt refined supply

DRC 64% China 57%

Source: Benchmark Mineral Intelligence

Cobalt’s battery evolution

Cobalt demand by sector 2016 -percentage

Batteries 52%

Cobalt demand by sector 2020 - percentage

Batteries 59%

Source: Benchmark Mineral Intelligence

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