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Energy Insiders Podcast July 9

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NSW Labor says no to new coal, but may support government ownership of new wind and solar plants as it aims for high renewables share.

In an interview with RenewEconomy’s Energy Insiders podcast, Adam Searle, the resources and energy spokesman, says Labor is still putting together its energy policy as it prepares for the next state election early in 2019.

He makes two things clear: Labor does not support a new coal fired power station, even though the state will lose most of its current fleet within the next 15 years, and will aim for a high renewable share. He hedges his bets on what if any state targets will be implemented, but says he supports federal Labor’s 50% target. And he indicated his support for government ownership of wind and solar plants, and explains why.

You can find episodes of both Energy Insiders and the Solar Insiders podcasts here, and on your favourite podcast platform.

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  • My_Oath

    David, I just caught up on the previous episode and noted your doubts about the project viability of the Australian spodumene lithium operations with respect to the pricing differential to South American brines.

    There are several points to note on this issue.

    Firstly, yes, lithium supply from spodumene is more expensive than from brine.

    But….

    And its a big ‘but’. The difference, especially to Chilean brine, is not that great. The South American brine operators only report costs of technical grade lithium (99%), not battery grade (99.5%+). Getting the last of the impurities out of the brines is an expensive process and all done in north east Asia. While they do acknowledge the issue when pressed, they are reticent about putting dollar figures on it.

    In the Chilean case, reported costs also don’t take the new CORFO royalty scheme into account, with royalties up to 60%. When you add the royalties to the additional refining costs, while still cheaper, the brines are no longer significantly cheaper than spodumene.

    Secondly, there is timing and capital cost. The Bald Hill mine in WA, for example took 14 months from first drill hole to first product at a capex of $42 million (with a payback of 11 months). Any brine supply is staring down the barrel of 10 times that in both lead time and capex.

    Orocobre’s Olaroz, while much celebrated for being the first new South American brine operation in more than 2 decades, is now more that 3 years late in reaching nameplate capacity. Similarly, FMC’s expansion at La Negra II is 2 years overdue – and that isn’t a new operation. Its an expansion!

    Spodumene is filling the EV demand. Brines are still only supplying the traditional market.

    Thirdly is the product itself. Brines produce lithium carbonate. The high nickel cathode for cobalt batteries require lithium hydroxide. You are looking at $500/t+ to convert carbonate to hydroxide. When you add that cost to the refining and royalties suddenly spodumene is looking to be at par.

    In contrast, spodumene is leached to a lithium chloride salt, then converted to lithium hydroxide with a purity off in excess of 99.9%. It doesn’t need the additional difficult refining. Further, to convert from hydroxide to carbonate is a simple process. You just bleed CO2 across it at a cost of $50/t.

    Lastly, what about solid state? They require lithium metal. And here is the kicker. Lithium metal is refined from lithium chloride salt… a constituent step in the spodumene process…. but an expensive additional sever steps to derive from brine (unless they scrap their current cheap processing facilities and build from scratch needing new capex – that will still be more expensive capex than spodumene supply.

    BEVs need both brine and spodumene supply. None of the current Australian lithium miners are at risk from brines flooding in and depressing the price. The only way that will happen is if the BEV rollout was to suddenly cease. And that won’t happen.

    • David leitch

      My_Oath

      Thanks for your comments. Do you have any numbers in the increase in lithium hydroxide production in tongues source from Australian spodumene over the past 3 years? Not the plans but the actual numbers. Are these published anywhere?

      • My_Oath

        I will try, but as it is all converted in China, it will be difficult to get.

        Note that most of the battery production in China itself is low nickel/high cobalt – and therefore from carbonate. The demand for low cobalt is driven by the west and ethical concerns. Also, it appears that the high nickel chemistries result in better performance as evidenced by Tesla’s performance stats and the recent Pikes Peak results.