Tesla Factor: Recharging Nevada’s Lithium Industry

By Jason Hidalgo

RENO, Nev. (AP) – Take away the remnants of more than 200 exploratory drill holes and you’re left with a rural landscape that looks just like any other in Humboldt County.

Beneath all that sagebrush and dry dirt, however, lies a metal that could potentially charge the Silver State in more ways than one.

It’s a project that represents a $40 million gamble so far for Western Lithium. That’s how much the company has spent to prove the existence of a resource that’s seeing increased demand in a technology-hungry world: lithium.

Western Lithium plans to spend even more. If it gets government approval, the company says it will invest up to $300 million on lithium mining and plant operations.

With the advent of smartphones and other portable devices, lithium saw its value skyrocket tenfold from 2000 to 2010 before stabilizing to $6,000 per ton in recent years, according to U.S.-based development company Lithium Exploration Group.

What’s truly energizing interest in domestic lithium production, however, is the prospect of Tesla Motors’ ascendance, along with a massive $5 billion Gigafactory that is being pushed by its chief executive officer, Elon Musk.

Designed to reduce battery costs by 30 percent, the Gigafactory is Tesla’s not-so-secret weapon in producing a more affordable, mass-market electric car. For industry watchers, however, the move also translates to a lot more demand for lithium.

In a note sent to shareholders in late March, Lithium Exploration Group CEO Alex Walsh said Tesla is expected to consume up to 15,000 additional tons of lithium carbonate once its Gigafactory operations are in full swing in 2017. To put the amount in perspective, total global demand for lithium carbonate in 2012 was around 160,000 tons, according to international metals and minerals research and consulting firm Roskill.

“It’s just a matter of time before electric vehicles take over the market,” said Dennis Bryan, senior vice president of Western Lithium. “Given the continued growth factor in lithium, we expect demand to increase substantially.”

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Posted by on May 1st, 2014 and filed under Techline. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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