Tesla powers into lithium mining
Tesla's 'Battery Day' may have been designed as a platform to promote its under-bonnet capabilities but the occasion was dominated by news of a llithium-oriented mining strategy which will power the electric vehicle maker into the next automotive era.
While the new '4680' cell is the latest launch in its ongoing battery cost-cutting journey, offering six times the power of its predecessors, it was production plans for nickel and lithium, announced on a 10,000-acre site in Nevada, which attracted all the headlines.
Tesla will build its own cathode facility in the US, leveraging "all resources that exist for nickel and lithium" and reducing miles travelled by all materials that end up in the cathode by 80 percent, according to Drew Baglino, Senior Vice President of Powertrain and Energy Engineering at Tesla.
Tesla, which aims to reach 100 GWh of inhouse lithium-ion battery cell production capacity by 2022 and 3000 GWh by 2030, broke ground on the Gigafactory in June 2014 outside Sparks, Nevada (pictured), which will be powered by renewable sources.
For all the upbeat sentiments - Elon Musk also said he wants to cut the cost of entry-level EVs to $25,000 within three years - Tesla's share price has been sharply in reverse with investors wiping $23.5 billion off the company's share price, which dropped 10.3 percent and closed at $380.86 (down more than $50 billion since Monday).
Commentators reacted cautiously to the production plans, citing issues over permit processes, water access and unproven methodologies. Morgan Stanley said lithium stocks were likely "to react negatively".
However the electric car industry will dominate demand for lithium in the next decade. A Cornish mining firm, Roche-based British Lithium Limited (BLL), was awarded £500,000 last month to research and develop hard rock lithium extraction, which could eventually attract electric car battery gigafactories to the UK.
Barrick profit beats expectations as copper, gold prices up
Barrick Gold has reported a 78% jump in first-quarter profit, beating analyst expectations thanks to rising gold and copper prices, and said it was on track to meet annual forecasts.
Production in the second half is expected to be higher than the first, the gold miner said, thanks in part to the ramp-up of underground mining at the Bulyanhulu mine in Tanzania and higher expected grades at Lumwana in Zambia, reports Reuters
Barrick’s first-quarter gold production fell to 1.10 million from 1.25 million ounces due partly to lower grades at its Pueblo Viejo mine in Dominican Republic.
Adjusted profit surged 78% to $507mn in the quarter ended March 31, from $285mn a year earlier, and Barrick announced a 9 cent per share quarterly dividend.
Stronger prices helped boost Barrick’s revenue from its copper mines in Chile, Saudi Arabia and Zambia by 31% from the fourth quarter. Overall earnings per share were $0.29, ahead of analysts’ estimate of $0.27.
“We expect a positive stock reaction to the earnings beat and strong cash flow,” said Credit Suisse analysts.
Potential for South Africa merger
Barrick CEO Mark Bristow, who has championed mergers across the gold industry, said he backed the idea of South Africa-listed miners Goldfields and AngloGold Ashanti combining.
Speculation has been swirling around the two companies and Sibanye-Stillwater, whose CEO Neal Froneman floated the idea of a three-way merger.
“I’m a South African, and this country has such a great mining history and it would be great to see a real gold business come out of the many failed discussions that we’ve seen,” said Bristow.
Goldfields declined to comment. In a statement, AngloGold Ashanti said it was focused on delivering on its growth plan to unlock value from its portfolio of gold assets.
Bristow also said he had met with the Democratic Republic of Congo’s new mines minister and other officials and was continuing to work on getting $900mn belonging to its Kibali mine joint venture out of the country.
“We have a solution, it just needs to be sanctioned by the appropriate authorities which haven’t been around for a while,” he said, referring to a recent government overhaul by President Felix Tshisekedi.