Tesla Officially Enters The Mining Business

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One of the many details revealed at Tesla’s Battery Day event yesterday was that it’s planning to build its own cathode factory here in North America. Additionally, Elon Musk’s announcement of 10,000-acre lithium clay deposit in Nevada confirmed that Tesla is officially getting into the mining business.

On the topic of lithium, Elon Musk said that there was enough lithium in Nevada alone to electrify the entire US. He also said that Tesla recycles 100% of is vehicle batteries today and hopes to cut cobalt out of batteries entirely. If he can do this, use more nickel, and make several other improvements throughout the full battery production process, this could cut the costs of EV batteries in half.

Tesla is collecting factories as if they are stamps. This is an excellent thing for the US economy as well as for Tesla’s mission of sustainability.

“We’re gonna go and start building our own cathode facility in North America and leveraging all of the North American resources that exist for nickel and lithium, and just doing that just localizing our cathode supply chain and production, we can reduce miles traveled by all the materials that end up in the cathode by 80%,” said Drew Baglino, Senior Vice President of Powertrain and Energy Engineering at Tesla, who gave the presentation alongside of Elon Musk.

Baglino briefly described some of the basics of the layout of the cathode plant. There will be a lithium conversion facility next to the cathode plant. Also, Tesla is working on a new sulfate-free process that will reduce lithium costs by 33%. Although we are not sure where in North America the cathode facility will be located, it makes sense that it will be near the lithium clay plot that Tesla recently bought.

In 2018, KTVN2 News reported that a Nevada mine could produce 25% of the world’s lithium. The article noted that it was the largest known lithium deposit in the United States and is located in northern Nevada. Tim Crowley, Vice President of Government Affairs & Community Relations for Lithium Nevada, said that the area can be mined at a good rate for 46 years, which is pretty much unheard of. Whether or not Tesla bought this specific mine is not known.

The point, though, is that lithium is abundant.

That wasn’t the first time Elon Musk said that lithium was everywhere, and it probably won’t be the last.

The Importance Of In-House Lithium Supply

Earlier today, Engineering and Technology reported that Mexican drug cartels could mess up the country’s most important lithium project. More than a decade ago, 800,000 tonnes of lithium were discovered in Mexico. Then, in 2014, Bacanora Minerals located reserves of 10 times more than that. It seems that Mexico is sitting on a giant pile of lithium. This deposit was found in Sonora in a region that is 1.4 times larger than England. It contains more than 8 million tonnes of lithium.

One of the major concerns is Mexico’s powerful drug cartels, which could jeopardize the entire Bacanora project. These criminal entities could expand from the drug business into the lithium industry. It appears this scenario is becoming more likely, as mines are increasingly under attack by violent groups and organized crime.

What’s the point? The point is that this is another reason why it makes sense to bring more mining and manufacturing “in-house” (within our own borders at least).

Furthermore, Tesla wants to extract the lithium with as little environmental impact as possible.

Battery Day revealed that Tesla has plans for more efficient use of raw metal ore for the cathode production — no wastewater, a 66% reduction in capex, a 76% reduction in process cost. Again, no wastewater should not be overlooked — Tesla, will not be poisoning our waterways, a particular concern in the West where water is more limited.

It seems that RK Equity’s Howard Klein had a glimpse into the future. In a June article for CleanTechnica, I analyzed his interview on the EV Stock Channel. One thing Klein said that really struck me back in June was this:

“If Tesla had its own lithium ore, it could design its own batteries. It wouldn’t have to buy them already made or partially designed. Tesla could use its own ore to make its own unique design.”

In that article, the gentlemen even speculated as to which mine Tesla could acquire. Although the mine’s identity isn’t known, we do know that it’s 10,000 acres and it’s located in Nevada. The Thacker Pass mine is a clay resource — a sedimentary deposit which is actually described as a problem for the company due to it being an unconventional lithium deposit. If I had my guess, it would be that one — simply because of the way Elon Musk operates. He sees the hardest — seemingly impossible problems — and goes after them.

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Johnna Crider

Johnna owns less than one share of $TSLA currently and supports Tesla's mission. She also gardens, collects interesting minerals and can be found on TikTok

Johnna Crider has 1996 posts and counting. See all posts by Johnna Crider