During an engaging interview at PDAC 2024 with Tracy Weslosky of InvestorNews, Dan Blondal, CEO, Director, and Founder of Nano One Materials Corp. (TSX: NANO), shared insights into the company’s innovative strides and strategic partnerships, notably with Sumitomo Metal Mining. Blondal described Sumitomo as a “fantastic class one partner” with extensive experience in cathode manufacturing and technology, highlighting the partnership’s role in enhancing Nano One’s position in the battery materials market. With a robust patent portfolio of 40 patents and over 50 pending, Blondal emphasized the importance of continuous innovation in strengthening the company’s technological leadership and shareholder value. Government support, particularly from Sustainable Development Technology Canada (SDTC), totaling around $25 million in funding, underscores the strong backing Nano One has received, further solidifying its stance in the industry.

Blondal highlighted three competitive advantages of Nano One: its unique position with the only North American LFP production facility outside Asia, its one-pot process that reduces cost, complexity, and environmental impact, and a strategic expansion plan aiming to deploy its technology globally through a “Design-Once-Build-Many” approach. These strengths, according to Blondal, place Nano One in a prime position to capture a significant share of the growing LFP market, which is crucial for electric vehicles and energy storage solutions. The feasibility study for Nano One’s first commercial plant and the progress at its Candiac pilot plant exemplifies the company’s commitment to scaling up its technology to meet global demands efficiently.

Blondal’s vision for 2024 emphasizes expanding Nano One’s customer base, advancing a feasibility study to solidify financial and operational plans for their commercial plant, and securing critical raw material supplies. This approach highlights the company’s strategy to scale its patented technology, aiming for a significant impact on the electric vehicle and energy storage sectors, supported by robust partnerships and government engagement.

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About Nano One Materials Corp.

Nano One Materials Corp. (Nano One) is a clean technology company with a patented, scalable and low carbon intensity industrial process for the low-cost production of high-performance lithium-ion battery cathode materials. With strategic collaborations and partnerships, including automotive OEMs and strategic industry supply chain companies like Sumitomo Metal Mining, BASF, Umicore and Rio Tinto. Nano One’s technology is applicable to electric vehicles, energy storage, and consumer electronics, reducing costs and carbon intensity while improving environmental impact. The Company aims to pilot and demonstrate its technology as turn-key production solutions for license, joint venture, and independent production opportunities, leveraging Canadian talent and critical minerals for emerging markets in North America, Europe, and the Indo-Pacific region. Nano One has received funding from SDTC and the Governments of Canada and British Columbia.

To learn more about Nano One Materials Corp., click here

Disclaimer: Nano One Materials Corp. is an advertorial member of InvestorNews Inc.

This interview, which was produced by InvestorNews Inc. (“InvestorNews”), does not contain, nor does it purport to contain, a summary of all material information concerning the Company, including important disclosure and risk factors associated with the Company, its business and an investment in its securities. InvestorNews offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This interview and any transcriptions or reproductions thereof (collectively, this “presentation”) does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to subscribe for or purchase any securities in the Company. The information in this presentation is provided for informational purposes only and may be subject to updating, completion or revision, and except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any information herein. This presentation may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. This presentation should not be considered as the giving of investment advice by the Company or any of its directors, officers, agents, employees or advisors. Each person to whom this presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. Prospective investors are urged to review the Company’s profile on SedarPlus.ca and to carry out independent investigations in order to determine their interest in investing in the Company.

Welcome to the latest issue of the Technology Metals Report (TMR), brought to you by the Critical Minerals Institute (CMI). In this edition, we compile the most impactful stories shared by our members over the past week, reflecting the dynamic and evolving nature of the critical minerals and technology metals industry. Among the key stories featured in this report are President Joe Biden’s initiatives to restrict Chinese electric vehicles (EVs) citing national security concerns, the American Council for an Energy Efficient Economy’s report naming the Toyota Prius Prime SE as the greenest car in America, and insights into the lithium market with investors remaining keen despite a price plunge. We also delve into the broader context of these developments, including the potential solution to the rare earth crisis through tetrataenite, BYD’s exploration for a factory location in Mexico, and the ongoing challenges and opportunities facing the global electric vehicle and critical minerals markets.

This week’s report also highlights various strategic collaborations and developments, including the significant challenge posed by China’s EV industry to Detroit’s Big Three automakers and Australia’s navigation of a critical minerals market meltdown amidst declining prices for key exports such as iron ore, nickel, and lithium. Furthermore, we cover Lynas Rare Earths Ltd.’s (ASX: LYC) call for government vigilance in the volatile nickel market, China’s lithium-ion battery industry facing excess inventory and production capacity issues, Energy Fuels Inc.’s (NYSE American: UUUU | TSX: EFR) record net income and uranium production ramp-up, and Mercedes-Benz’s adjustment of its electrification goal. These stories underscore the rapidly changing landscape of the technology metals and critical minerals industry, spotlighting strategic collaborations, market dynamics, and the critical role of innovation and policy in shaping the future of sustainable technology and energy.

Biden Calls Chinese Electric Vehicles a Security Threat (February 29, 2024, Source) — President Joe Biden has initiated measures to potentially restrict the entry of internet-connected Chinese electric vehicles (EVs) into the U.S. market, citing national security concerns over their ability to transmit sensitive data to Beijing. The Commerce Department has launched an investigation into these security threats, marking the beginning of a broader strategy to prevent low-cost Chinese EVs from undermining U.S. automakers. This move comes amid growing tensions between the U.S. and China over trade and technology, with Biden emphasizing the need to protect the domestic auto industry from unfair Chinese practices. The investigation, a result of discussions with major automakers and unions, could lead to new regulations on vehicles using Chinese software, which is feared to collect extensive data on American users. This action is part of Biden’s wider efforts to bolster U.S. technology restrictions against China and maintain competitiveness in the global auto market.

The ‘greenest’ car in America might surprise you (February 29, 2024, Source) — A new report from the American Council for an Energy Efficient Economy challenges the common perception that electric vehicles (EVs) are the greenest cars in America by naming the Toyota Prius Prime SE, a plug-in hybrid, as the top environmentally friendly vehicle. The Prius Prime SE can travel 44 miles on electricity before switching to hybrid mode, combining electric and gasoline power. The report assesses over 1,200 vehicles on their road and manufacturing emissions, including pollutants beyond carbon dioxide. Despite the growing market for EVs, the report emphasizes that a car’s green credentials depend on factors like weight, battery size, and overall efficiency, not just its electric capabilities. Plug-in hybrids like the Prius Prime offer a balance for drivers by allowing short electric commutes and longer gas-powered trips, presenting a practical alternative amidst America’s evolving charging infrastructure. Critics argue that fully electric vehicles remain the best option for environmental benefits, especially as renewable energy sources increase. However, the report suggests the importance of offering consumers a range of environmentally friendly choices to suit different needs.

Lithium Investors Are Looking Beyond Price Plunge, Chile Minister Says (February 28, 2024, Source) — Despite a recent downturn in lithium prices, investors remain keen on new lithium projects in Chile, as confirmed by the country’s Mining Minister, Aurora Williams. This interest is fueled by the long-term prospects associated with the global shift towards renewable energy and electric vehicles, rather than short-term price fluctuations. Chile, home to the world’s largest lithium reserves, has seen prices drop significantly since the introduction of a new public-private partnership model aimed at attracting investment while ensuring major deposits remain under state control. Despite this, major international companies like Rio Tinto Group and Tsingshan Holding Group have continued discussions with Chilean authorities, demonstrating a sustained interest in the sector. Chile plans to offer exploration rights in certain salt flats, with the possibility of private investors gaining either minority or majority stakes depending on the strategic importance of the area. This initiative is part of a broader effort to maintain Chile’s status as a key player in the global lithium market, amidst growing competition and as the country also seeks to bolster its position in the copper industry.

Navigating the Climate Change Storm of ESG Withdrawal and Climate Change Commitment (February 28, 2024, Source) — Recent decisions by JPMorgan, State Street, and Pimco to exit Climate Action 100+ (CA+), amid political pressures, have sparked debate over the fate of global ESG initiatives. Nevertheless, CA+’s extensive network, including over 700 members and its collaborations with high-emission companies for a low-carbon transition, exemplifies the resilience of ESG efforts. Despite these withdrawals, the broader commitment to ESG principles, especially in the extractive industries with initiatives like Copper Mark and Responsible Steel, remains robust. This commitment is further reinforced by regulatory measures against greenwashing and heightened public activism for environmental protection and equitable benefits. These trends underscore that, far from diminishing, ESG remains a crucial driver of corporate strategy and societal expectations, suggesting a sustained impact on global business practices.

Tetrataenite as a solution to the rare earth crisis (February 28, 2024, Source) — The rare earth crisis, pivotal for modern technologies such as electric motors and wind turbines, stems from the scarcity and environmental impact of mining rare earth elements like yttrium and neodymium. As demand for these materials grows due to their importance in reducing fossil fuel reliance and combating climate change, shortages are anticipated. A potential breakthrough in 2023 by an international research team suggests tetrataenite, a meteorite mineral with similar magnetic properties to rare earths, as a solution. Unlike its natural slow formation in space, the team discovered a method to synthesize tetrataenite on Earth rapidly using common materials like iron, nickel, and phosphorous, potentially offering an alternative to address the rare earth crisis.

Chinese automaker BYD looking for Mexico plant location, executive says (February 28, 2024, Source) — Chinese electric vehicle manufacturer BYD is scouting locations in Mexico for a new factory, targeting the local market to enhance its share, as stated by BYD Americas CEO Stella Li. With an annual production capacity of 150,000 cars, the company plans to finalize the plant location by year-end. Recently surpassing Tesla in global EV sales, BYD’s expansion into Mexico signals a potential competitive challenge to U.S. auto companies, amidst concerns from the Alliance for American Manufacturing about low-cost Chinese cars impacting the U.S. auto sector’s viability. BYD’s strategy focuses on serving the Mexican market, particularly eyeing central and southern regions for factory sites. The company’s cost competitiveness is attributed to early investments in EV technology and extensive vertical integration. BYD also announced the launch of its Dolphin Mini EV in Mexico, priced significantly lower than the cheapest Tesla, aiming to make electric cars accessible to more Mexican consumers. However, challenges remain, such as the limited network of charging stations in Mexico.

China’s Electric Vehicles Are Going to Hit Detroit Like a Wrecking Ball (February 27, 2024, Source) — China’s electric vehicle (EV) industry, led by automakers like BYD, poses a significant challenge to Detroit’s Big Three (Ford, General Motors, and Stellantis). Despite recent profits and optimistic forecasts for 2024, these American giants are struggling with their EV sales goals amidst the rapid emergence of affordable and efficient Chinese EVs. BYD, in particular, has sold millions of electrified vehicles, expanding its global manufacturing footprint to meet increasing demand. The competitive pricing and technological efficiency of Chinese EVs underscore China’s evolving industrial capabilities, transitioning from basic manufacturing to complex, high-tech production including cars and batteries. This shift represents a broader challenge to American automakers, who must navigate a changing market landscape while addressing structural vulnerabilities in their business models, heavily reliant on sales of trucks and SUVs to a niche market. The U.S. government faces a delicate balance of supporting domestic industries through subsidies and trade restrictions while fostering a competitive environment that encourages innovation and adaptation to the global shift towards electrification.

Australia’s Precarious Position: Navigating a Critical Minerals Market Meltdown (February 26, 2024, Source) — Australia is at a critical juncture, facing a significant downturn in the prices of key exports such as iron ore, nickel, and lithium, which underscores the country’s vulnerability due to its heavy reliance on these commodities and its dependence on China, its main buyer. The global implications of this market meltdown are profound, with the economic viability of mining and refining operations being challenged, as demonstrated by Lynas Rare Earths Ltd.’s (ASX: LYC) struggles at its Kalgoorlie ore processing plant. The decline in the nickel industry has uncovered manipulations of market prices, reflecting China’s strategic dominance over the global supply chain for rare earth elements and other critical minerals. In response, Australia is attempting to reduce dependence on Chinese processing by offering subsidies to local mining and processing operations, while also dealing with the economic repercussions of collapsing metal prices. This situation necessitates a strategic reevaluation of Australia’s role in the global minerals market, exploring options like underwriting national processing facilities to enhance the value of its mineral exports and diversify its economic base amidst changing global trade dynamics.

Rare earths leader Lynas warns govt on nickel fallout (February 26, 2024, Source) — Lynas Rare Earths Ltd. (ASX: LYC), a leading rare earths producer, has highlighted the importance of government vigilance in response to the nickel market’s volatility and its broader impact on the mining sector. The company reported a 74% decrease in net profit to $39.5 million for the half-year ending December 31, attributing this decline to subdued prices for critical minerals, largely due to China’s dominance in supply. Despite the market challenges, Lynas, the largest producer of rare earths outside China, emphasizes its strategy of being a low-cost producer to sustain profitability even in a weak market. Lynas is expanding its operations, including projects in the United States, and making contingency plans for potential disruptions in supply chains, such as sourcing sulphuric acid due to the possible closure of BHP’s nickel refinery. The company’s experience underscores the interconnected nature of the minerals industry and the need for strategic planning and government engagement to ensure resilience and competitiveness, especially in securing sovereign supplies of critical minerals.

China’s lithium-ion battery industry faces excess inventory, production capacity as EV market downshifts: industry analysts (February 25, 2024, Source) — China’s lithium-ion battery industry, pivotal in the global EV market, is navigating through a phase of excess inventory and production capacity due to decreased demand for electric vehicles. Analysts predict a challenging year ahead, with companies facing losses amidst a price war triggered by overcapacity. The situation has led to significant price drops in lithium carbonate and battery cells, exacerbated by reduced subsidies for EVs. With production far exceeding installation into products, further price declines are expected. The market is undergoing a clearing phase, with expectations of breaking even next year. Investment in new capacity is likely to decelerate. Despite a forecasted slowdown in domestic EV sales growth, the global lithium market faces a ballooning excess supply, raising concerns over the long-term growth prospects for lithium. Top battery and lithium mining firms may only see profitability by 2025, as the industry grapples with these challenges.

Energy Fuels Announces 2023 Results: Record Net Income and Earnings per Share, Uranium Production Ramp-Up, and Near-Term Production of Separated Rare Earth Elements (February 23, 2024, Source) — In 2023, Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) announced significant achievements including a record annual net income of nearly $100 million and the commencement of uranium production across three mines, aiming for a production rate of 1.1 to 1.4 million pounds per year by mid-to-late 2024. The company highlighted a strong balance sheet with over $220 million in liquidity and no debt. Revenue was primarily driven by uranium sales, with significant contributions from rare earth elements (REE) and vanadium. The sale of the Alta Mesa project funded investments in uranium and REE production. Energy Fuels is preparing for the near-term production of separated REEs, anticipating to become a leading producer outside of China. With a focus on growth, the company is also exploring expansions into additional uranium and REE sources, aiming to significantly increase production capabilities while capitalizing on market opportunities in both sectors.

Mercedes-Benz delays electrification goal, beefs up combustion engine line-up (February 22, 2024, Source) — Mercedes-Benz announced a postponement of its electrification target by five years, aiming for electrified vehicles to comprise up to 50% of its sales by 2030, a shift from the initial 2025 goal focused mainly on all-electric cars. This adjustment reflects a broader trend among automakers recognizing the slower-than-anticipated adoption of electric vehicles (EVs), as investments in EV technology and capacity have surpassed current demand. CEO Ola Kaellenius highlighted that even in Europe, a complete switch to electric vehicles by 2030 is unlikely, noting that EVs currently represent a small fraction of total sales. Mercedes-Benz reassured investors and customers of its commitment to refining its combustion engine vehicles alongside its EV ambitions, with plans for a significant lineup refresh by 2027. The announcement, coupled with a €3 billion share buyback program, positively impacted the company’s stock, which saw a 5.9% increase. However, challenges such as economic slowdowns, supply chain issues, and geopolitical tensions have led the automaker to anticipate lower sales and reduced profitability for 2024.

Investor.News Critical Minerals Media Coverage:

• February 28, 2024 – Navigating the Climate Change Storm of ESG Withdrawal and Climate Change Commitment https://bit.ly/3SXymnP
• February 26, 2024 – Australia’s Precarious Position: Navigating a Critical Minerals Market Meltdown https://bit.ly/3uWQoOZ

Investor.News Critical Minerals Videos:

• February 29, 2024 – PDAC President Raymond Goldie Bolsters Toronto’s Status as Global Mining Investment Capital in Lead-Up to PDAC 2024 https://bit.ly/42VBDss

Critical Minerals IN8.Pro Member News Releases:

• March 1, 2024 – Voyageur Pharmaceuticals Ltd. Announces Closing of Private Placement https://bit.ly/432eRzi
• February 29, 2024 – Ucore Rare Metals to Present at the 2024 PDAC Conference https://bit.ly/3TglcUa
• February 28, 2024 – First Phosphate and Craler Sign MOU for the Development of Global Logistical Competencies to and from the Saguenay-Lac-St-Jean region of Quebec, Canada https://bit.ly/49xD5DI
• February 27, 2024 – American Rare Earths to present at two leading industry conferences in March PDAC and International Battery Seminar https://bit.ly/49uaFuu
• February 27, 2024 – Nano One Commences Feasibility Study for First Commercial LFP Plant and “Design-Once-Build-Many” Growth Strategy https://bit.ly/3TaFtum
• February 27, 2024 – Media Advisory – Neo Performance Materials Inc. Fourth Quarter 2023 Earnings Release & Conference Call https://bit.ly/3uSkeUQ
• February 26, 2024 – Appia Reports High-Grade Total Rare Earth Oxide Results up to 22,339 ppm or 2.23% on Diamond Drill Hole #1 Within Target IV at PCH IAC Project, Brazil https://bit.ly/48DKQHe
• February 26, 2024 – Kraken Energy Commences Drilling at Harts Point & Provides Corporate Update https://bit.ly/49r02bS

China to impose some graphite and processed graphite materials ‘export permits’ from December 1, 2023

Last week it was reported that China, the world’s top graphite producer plans to curb exports of key battery material by implementing export permits for some graphite products from December 1 to protect national security. Another report stated: “China graphite export restrictions could hinder ex-China anode development….if it lasts into the longer term, it is likely to accelerate the build-out of a localized graphite and battery anode supply chain outside China.”

Graphite is the number one metal required for lithium-ion batteries making up about a 28% share. It is used in the anode.

The world is very dependent upon China to supply processed graphite material and anodes for Li-ion batteries

The reason why this is huge news in the graphite world is that China produces 67% of global natural flake graphite supply and refines more than 90% of the world’s graphite into active anode material (typically spherical graphite). If China were to deny or delay permits for spherical graphite it will cause major problems for anode manufacturers outside China, such as those in South Korea, Japan, or North America.

China currently produces ~77% of global lithium-ion batteries and 75-80% of global electric cars, thereby completely dominating the industry. If the West is shut out from sourcing processed EV battery materials from China then they will have a major problem producing their own EVs. China plans to prioritize EV battery materials for their own needs. This is why President Biden introduced the Inflation Reduction Act (IRA) and the EU introduced the EU Critical Raw Materials Act. Both are designed to address the shortages in the EV supply chain and the forecast shortages of future supply of critical raw materials. The problem is the IRA has done little to address the supply of raw materials and the EU Critical Raw Materials Act is woefully inadequate and targets fall way short of what will be needed.

Which western graphite companies can rise to meet the challenge to establish an ex-China graphite supply chain

The leading western graphite companies that are working to establish an ex-China supply chain for flake graphite, synthetic graphite, and spherical graphite include:

• Syrah Resources Limited (ASX: SYR) – Largest western flake graphite producer with their 350,000tpa flake graphite capacity Balama Mine in Mozambique. Currently constructing the Vidalia spherical graphite facility in Louisiana, USA with Stage 1 production plans to produce 11,250tpa of spherical graphite. Longer term they plan to expand to 45,000tpa in 2026 and then to >100,000tpa by 2030 with an Europe/Middle East facility. Syrah already has an off-take agreement with Tesla (NASDAQ: TSLA). Syrah’s stock price has surged ~80% higher the past week following the release of the China export permits news.
• Nouveau Monde Graphite Inc. (NYSE: NMG | TSXV: NOU) – Is rapidly progressing their plans for their Matawinie Graphite Mine and Bécancour Battery Anode Material Plant in Quebec, Canada. The company is working with Panasonic to qualify their graphite anode material. Panasonic supplies Tesla with batteries.
• Northern Graphite Corporation (TSXV: NGC | OTCQB: NGPHF) – Owns graphite producing and past producing mines in Quebec, Canada and Namibia. They also own the Bissett Creek graphite Project in Ontario, Canada. The Company state that they are “North America’s Only Significant Natural Graphite Producer”. The Company plans to develop one of the world’s largest battery anode materials facilities in Baie-Comeau Québec with 200,000tpa of capacity.
• NextSource Materials Inc. (TSX: NEXT | OTCQB: NSRCF) – A new graphite producer from their Molo Graphite Mine in Madagascar with Phase 1 capacity of 17,000tpa of flake graphite production and plans to expand to 150,000tpa. The Company’s short term plan is for a Battery Anode Facility in Mauritius and longer term for similar facilities in USA/Canada, UK, EU.
• Magnis Energy Technologies Ltd. (ASX: MNS | OTCQX: MNSEF) – Magnis aims to produce high performance anode materials utilising ultra-high purity natural flake graphite from their Nachu Graphite Project in Tanzania. Magnis’ partially owned U.S.-based subsidiary Imperium3 New York, Inc (“iM3NY”) operates a gigawatt scale lithium-ion battery manufacturing project in Endicott, New York.
• Talga Group Ltd. (ASX: TLG) – Own the integrated mine to anode Vittangi Graphite Project in Sweden. In September 2023 Talga broke ground on their 19,500tpa anode facility, stating “the refinery is projected to be the first commercial anode production in Europe for electric vehicle Li-ion batteries”.
• Novonix Limited (NASDAQ: NVX | ASX: NVX) – Has a production capacity target of up to 20,000 tpa of synthetic graphite anode material from their Tennessee facility in the USA.
• Anovion Technologies (private) – The USA anode producer plans to invest US$800 million to produce a 40,000tpa synthetic graphite anode material facility in Georgia, USA with plans to expand to 150,000tpa by 2030.

Syrah Resources leads the West’s attempt to build an ex-China flake graphite and anode material supply chain

Magnis Energy Technologies is working towards becoming a graphite producer, anode materials producer and is already a small scale JV battery producer in the USA

Closing remarks

The Western world received a loud wake-up call the past week. The China graphite products ‘export permits’ may only serve to restrict or slow down some anode material supply from China, but it puts the West on notice of how dependent they are upon China.

Given the world is rapidly moving to electric vehicles, the West must urgently build up its EV materials supply chains or risk being left behind in the global EV race.

The USA is making some bold moves and the companies discussed in this article are moving in the right direction. Let’s just hope that the western EV supply chain build out accelerates rather than stalls like GM’s latest electric pickup truck plans. I think Americans will want U.S.-branded electric cars and I know Europeans will want European branded electric cars. If we are not careful our only choice one day might be Tesla and Chinese electric cars. Stay tuned.

Manganese is becoming a key part of the lithium-ion battery market, traditionally used in nickel, manganese, cobalt (“NCM”) batteries; but now it is also used in lithium manganese iron phosphate (“LMFP”) batteries. This new battery type offers greater energy density (and hence EV range) than the standard LFP battery. Manganese is still largely used in steel, but the battery demand looks set to grow much faster. Overall the global manganese market is expected to grow at a CAGR of 5.5% from 2023 to 2027.

LMFP batteries containing manganese are the latest development to improve lithium-ion batteries

As announced last month Gotion High-tech Co Ltd. (SHE: 002074) has developed a breakthrough LMFP battery that offers a “range of up to 1,000kms for a single charge and could last two million kms”. Their new battery pack will go into mass production in 2024.

In 2022 it was reported that “CATL will soon mass produce LMFP batteries”. Contemporary Amperex Technology Co., Limited (SHE: 300750) (“CATL”) is the world’s largest lithium-ion battery manufacturer by far with 37% market share and is a leading supplier of Tesla Inc. (NASDAQ: TSLA). At Tesla Battery Day in 2020, Elon Musk pointed out that Tesla targets to use manganese in its batteries for long-range electric cars.

At Tesla Battery Day 2020, Tesla targets to use nickel and ‘manganese’ batteries for long range vehicles where vehicle mass is not too large

Source: Tesla Battery Day video 2020

Note: Red oval done by the author to highlight manganese

Today’s company made a key announcement this week regarding commencement of manganese ore sales.

Elcora Advanced Materials Corp.

Elcora Advanced Materials Corp. (TSXV: ERA | OTCQB: ECORF) (“Elcora”) is working towards becoming a vertically integrated battery material company. Elcora has developed a cost-effective process to purify high-quality battery metals and minerals that are commercially scalable.

Elcora’s key projects have graphite, manganese, and vanadium. Elcora also has exposure to anode materials and graphene.

As announced on June 12 Elcora

“has received its first monthly order for 1000 metric tons of 37% + manganese ore. The delivery of the first part of the order is scheduled before the end of June 2023. The order was placed by a leading European customer looking for a long-term supply relationship and marks a significant milestone for Elcora’s mining division.“

The order is not large but it marks the beginning of what can be a good business for Elcora if they can achieve large-scale production. Manganese ore (37% Mn grade) currently trades at about US$3.13/ dmtu (Dry Metric Tonne Unit) FOB Port Elizabeth.

Elcora states:

“The recurrence of orders is expected to generate significant revenue for Elcora Advanced Materials Corp, further strengthening its position in the industry. With the increasing demand for manganese ore, the company is well-positioned to meet the needs of its customers...Elcora Advanced Materials Corp is well-positioned to benefit from this growing demand, and this order is just the beginning of its journey in the manganese market.”

Elcora’s Atlas Fox Project in Morocco – Beni Mellal Manganese Deposit/Mine and the Ouarzazate Project (including the Omar Mine)

Elcora’s Atlas Fox Project in Morocco is rich in manganese. It is comprised of the Beni Mellal Manganese Deposit/Mine and the Ouarzazate Project (including the Omar Mine).

At the Beni Mellal concessions, Elcora has a 10-year Exploitation License. This manganese concession contains a surface deposit mine that operated during French colonial times. Elcora plans to leverage on-site infrastructure with ore ready for processing. In Q4 2023 Elcora plan to build a gravimetric concentrator to upgrade raw ore content (30% Mn) to 50% Mn and increase mine production to 2,500 to 3,000 t/month of 50% Mn concentrate.

At the Ouarzazate Project Omar Mine, Elcora has acquired exclusive mining rights and an option to purchase the 16 km² manganese mining concession. The concession contains both a surface deposit and underground mine. Elcora is leveraging on-site infrastructure and has existing manganese ore piles of approximately 6,000 tonnes that are ready for processing. Elcora plans to ramp up mining production to 2,500 tons per month at the Omar Mine.

Elcora’s overall manganese ore production capacity is targeted to be more than 5,000 metric tonnes per month from the above concessions.

Atlas Lion Vanadium Project in Morocco

Elcora owns the Atlas Lion Vanadium Project (304 Km²) concessions in Morocco. Elcora plans to further explore and develop these concessions with the goal of producing vanadium.

Elcora’s next steps for mining manganese and vanadium in Morocco

Source: Elcora company presentation

Closing remarks

In total, Elcora currently owns seventeen polymetallic (vanadium, lead, other), one manganese (and one option to purchase) and one copper licences/concessions in Morocco. 

Elcora is making strong progress on its goal to become an integrated battery metals producer. The Company already has the technology and facilities to purify high-quality battery metals (notably spherical graphite, graphene, and anode powder) and is now working on the mining side with manganese and vanadium (noting they already have a graphite mine). The Atlas Fox Project in Morocco has commenced stockpiled manganese ore sales and plans to ramp up manganese ore production from its concessions to 5,000/t per month. Following this will be development work and potentially production from the Atlas Lion Vanadium Project, also in Morocco.

Elcora Advanced Materials Corp. trades on a market cap of only C$18 million, suggesting this may potentially be just the beginning for Elcora.

The first quarter in 2023 was a rough period for lithium stocks as the China lithium carbonate spot price crashed lower. However, the second quarter is looking a lot better.

FIGURE 1: China lithium carbonate spot prices appear to be rebounding after hitting a low in late April 2023

Global and China EV sales recovered strongly in March and April 2023

March 2023 global plugin electric car sales were over the 1 million mark and were the ‘second best month ever’. This was due to very strong sales in China and Europe, with the USA also contributing. It is already looking like the panic sell-off in lithium stocks has been overdone with stocks rebounding higher in the past 3 weeks.

Reports have it that Chinese lithium consumers are buying again after running down inventories in Q1/2023. Certainly, China plugin electric car sales have rebounded very strongly with over 500,000 sales in March and approximately 600,000 in April 2023. Those sales numbers are a huge increase over China’s January sales which fell 8% Year-over-Year to 343,000 as new energy vehicle (“NEV”) subsidies expired.

Lithium stocks rallying again

Strong EV sales in China are leading to early signs of a China lithium price recovery. Lithium contract prices remain much higher than spot prices reflecting the past lithium price rise and the strong outlook for lithium demand in 2023 and beyond.

As shown on the chart below, February, March, and April saw the leading lithium stocks (Albemarle Corporation (NYSE: ALB), Sociedad Química y Minera de Chile S.A. (NYSE: SQM), Livent Corporation (NYSE: LTHM), and Pilbara Minerals Limited (ASX: PLS)) follow spot prices lower; however, in May we can see a potential price recovery starting (green arrow in chart below).

FIGURE 2: Leading lithium stocks have been moving higher in May buoyed by improving EV sales and lithium prices (NYSE: ALB, NYSE: SQM, NYSE: LTHM, ASX: PLS)

Albemarle remains very positive on the lithium market with takeover offers and expansion plans

During the lithium price collapse of early 2023, Albemarle was moving in the opposite direction as it made several key announcements that indicated its strong belief that the lithium market would rebound. Below is a brief summary:

• March 27, 2023 – Albemarle announced a takeover offer for Liontown Resources at a 69% premium to the 30-day VWAP.
• May 3, 2023 – Albemarle announced plans to double lithium hydroxide output in Australia, effectively adding 50,000 tonnes per year of lithium refining capacity at their Kemerton plant.

Furthermore, Albemarle announced on May 3, a net sales increase of 129% for Q1/2023. Albemarle CEO Kent Masters commented:

“Compared to last year, first quarter net sales more than doubled, adjusted diluted earnings per share more than quadrupled providing a robust start to the year. … We see strong sales volume growth for the rest of the year but have modified our guidance to reflect softening lithium market pricing. We remain confident in the underlying market strength of our world-class asset base and our long-term growth strategy.”

Albemarle knows the lithium market better than most, especially given it has been the industry leader for over a decade. Currently, they have numerous expansion plans globally including:

• The Salar Yield Improvement Project in Chile;
• The above-mentioned Kemerton trains III & IV lithium hydroxide production expansion in Australia;
• An under-construction lithium conversion facility in Meishan China; and,
• The Kings Mountain mine development in the USA that will eventually feed their planned new South Carolina lithium processing facility.

Added to these items is the attempted takeover of Liontown Resources Limited (ASX: LTR) for A$2.50 or US$1.66 per share in cash, which values Liontown at A$5.2 billion or US$3.4 billion on an enterprise basis, at the time of the offer.

Both Bank of America and Scotiabank have recently upgraded Albemarle. The latter assigned a US$250 price target, which is well above the current price of US$195 at the time of writing.

Closing remarks

Several negative events in early 2023 caused a dramatic fall in China spot lithium carbonate prices. The lithium price had increased over 10x and was due for a fall, with Q1 typically being a weak quarter due to seasonal impacts causing lower EV sales.

Discussions about sodium-ion batteries did not help either. As it turns out, market participants are now realizing that lithium demand is still very strong, despite some short-term volatility. Sodium-ion batteries, at best, will have limited use cases in energy storage, and cheap, small EVs, mostly sold in China, due to inferior volumetric energy density.

For investors, the recent market dip in lithium stocks may prove to be a good time to go shopping. The long-term demand wave for lithium is a supercycle with 2037 demand forecast to be 35x higher (according to Trend Investing) than 2020 levels.

Certainly, Albemarle, the lithium leader, remains extremely bullish on the lithium sector with a multi-billion dollar takeover offer and expansion plans.

The EV and stationary energy storage booms are here and will only grow stronger this decade. The Tesla Inc. (NASDAQ: TSLA) Master Plan 3 reports that we need 240 TWh (240,000 GWh) of energy storage for the world to run on 100% renewable energy, most from lithium-ion batteries. Given global lithium-ion battery production in 2022 was only about 700 GWh you can draw your own conclusions. Albemarle and Tesla already have shown us what they think. The latter is breaking ground on a new billion-dollar lithium refinery in Texas this week.

In recent months the rush to secure nickel has begun, with Indonesia taking the main stage. What does this mean for the nickel market? And what about Western sources of nickel, have they been forgotten?

The nickel rush to Indonesia

Recent news highlights the rush and includes:

• February 1, 2023 – Reuters – “Exclusive: President Jokowi “confident” Tesla will invest in Indonesia.”
• March 30, 2023 – Reuters – “Ford in $4.5 billion deal for EV battery materials plant. Ford has joined PT Vale Indonesia and China’s Zhejiang Huayou Cobalt’s as their new partner in a $4.5 billion nickel processing plant in Indonesia….”
• April 17, 2023 – Reuters – “Volkswagen to partner on Indonesia EV battery ecosystem……Volkswagen…….will work with Vale, Ford, Huayou (Cobalt), French miner Eramet and several Indonesian firms like Merdeka Gold Copper, the parent company of Merdeka Battery, and energy firm Kalla Group.”

As many readers would know, Indonesia has the world’s largest nickel reserves and is working to develop the downstream to produce batteries and EVs. Indonesia does NOT have a free trade agreement with the USA, meaning nickel coming from Indonesia would not qualify for the Inflation Reduction Act (“IRA”). As a result, Indonesia is currently pushing for a limited free trade deal with the US on critical minerals.

Will Tesla invest next in Indonesia or will they choose North America or Australia? The latter two are safer and qualify under the IRA

What does this mean for the nickel market?

The boom in interest in Indonesian nickel means we will likely see a burst of investment into Indonesian nickel miners and an increase in nickel supply out of Indonesia. We already saw this when on March 28 it was reported that “Merdeka Battery Plans Indonesia’s 2nd-Largest 2023 IPO……. Merdeka Battery is tapping into the surging global demand for electric cars by refining its nickel into battery materials.” Interestingly the largest 2023 IPO in Indonesia looks like being another nickel company, with the IPO of Harita Nickel at about US$659 million.

Market experts are mostly forecasting a nickel surplus in 2023, mostly Class 2 nickel used in stainless steel. The Class 1 nickel market, used in EV batteries, looks much tighter. Later this decade it is looking like we will see significant Class 1 nickel deficits as the EV boom continues to gain traction.

What about Western sources of nickel, have they been forgotten?

The short answer is yes, to some degree. Due to the problems or permitting it appears the auto OEMs are choosing Indonesia over North American or Australian nickel supply. Ford is a classic example. On March 26, 2023, Ford (NYSE: F) CEO Jim Farley stated: “Batteries are the constraint……Both lithium and nickel are really the key constraining commodities. We normally get those from all over the world — South America, Africa, Indonesia. We want to localize that in North America, not just the mining but the processing of the materials.” Then on March 30, 2023, Ford announced their $4.5 billion deal for EV battery materials plant in ‘Indonesia’.

What is going on? Ford says they want to “localize that in North America” and 4 days later their actions are to invest US$4.5 billion in Indonesia!!! North American and Australian junior nickel & cobalt miners must be shouting out loud – “What about us?”

One great example would be Jervois Global Limited (ASX: JRV | TSXV: JRV) with their Idaho Cobalt Project shutdown announced on March 29, just weeks before production began. Admittedly their operation is a cobalt-copper project, but it still paints a similar picture. Another would be Australia’s Ardea Resources Limited (ASX: ARL) with their massive nickel and cobalt resource (one of the largest in the Western world with 5.9 million tonnes of contained nickel and 384,000 tonnes of contained cobalt), still on hold for several years waiting for funding. Western junior miners face a much tougher road to make it to production and they are not getting anywhere near the same support as the refiners or battery factories.

USA, Canada, and Australia have numerous nickel and cobalt projects just waiting for funding or permitting. These obstacles remain despite all the rhetoric of sourcing from home.

Closing remarks

Congratulations to Indonesia. They now look like getting huge funding and support from Western OEMs to develop nickel and cobalt mining and refining in ‘Indonesia’.

Commiserations to most western nickel and cobalt junior miners as they get nothing. The exception to date would be Talon Metals Corp. (TSX: TLO) who got a nickel supply agreement from Tesla and a US$114 million U.S. government grant. It should be noted that Vale Canada signed an off-take deal with General Motors (NYSE: GM) in 2022.

If the West truly wants a safe independent supply chain then it needs to fix the mining problems, namely permitting is too slow and funding is too little. There has been much talk about getting this fixed, but time is running out as China dominates and now Indonesia moves to become a key part of the EV supply chain.

Come on western governments, auto OEMs, support your local nickel & cobalt miners as we have seen happen with lithium in the past year.

It is a win-win situation for all.

Tesla‘s (NASDAQ: TSLA) Master Plan 3 was released in detail on April 5, 2023, and it gives the world a road map on how the world can transition to a clean sustainable energy future. It is arguably one of the most important documents ever released in history.

Key pillars of the plan include re-powering the existing grid with renewables (including solar, wind, geothermal, and hydro), switching to electric vehicles (“EVs”), switching to heat pumps, and some use of green hydrogen for high-temperature applications. Elon Musk also supports smart nuclear as a good base load power option, especially when compared to fossil fuel power, especially coal.

To achieve this, the world needs to build out a new infrastructure and a key part is stationary energy storage, mostly using batteries. Musk’s Master Plan 3 suggests we need a massive 240 TWh of energy storage globally to support both energy production and EVs. To get some perspective on this number, in 2022, the world produced only about 700 GWh of lithium-ion batteries. 240 TWh is equal to 240,000 GWh, which is 342x the current 700 GWh.

Of course, other energy storage apart from lithium-ion can be used, but certainly, the electric transport sector will rely on lithium-ion and it is estimated to need 112 TWh of the total 240 TWh needed. If the world was to steadily grow and reach 20TWh per annum (“pa”) of new energy storage production starting in 2030, then it would take 12 years (240/20=12) to reach the end goal sometime around 2042. In terms of costs, the plan suggests it would cost about US$10 trillion, which is only 10% of the world’s 2022 GDP. Also because electrification for transport and heat pumps are much more efficient, then the world would only need to produce 1/2 as much energy.

Tesla Master Plan 3 – The world needs 240 TWh of energy storage to become clean energy sustainable and avoid using fossil fuels

Investing in renewable & energy transition companies

One way to cover many of the areas discussed above is via some or all of the Sprott ETFs shown below:

• Sprott Energy Transition Materials ETF (NASDAQ: SETM)
• Sprott Physical Uranium Trust (TSX: U.UN | OTCQX: SRUUF)
• Sprott Uranium Miners ETF (NYSE: URNM)
• Sprott Junior Uranium Miners ETF (NASDAQ: URNJ)
• Sprott Lithium Miners ETF (NASDAQ: LITP)
• Sprott Nickel Miners ETF (NASDAQ: NIKL)
• Sprott Junior Copper Miners ETF (NASDAQ: COPJ)

Some other EV, battery, and battery metals ETFs include:

• Amplify Lithium & Battery Technology ETF (NYSE Arca: BATT)
• ProShares S&P Global Core Battery Metals ETF (NYSE Arca: ION)
• Global X Lithium & Battery Tech ETF (NYSE Arca: LIT)

The fact that renowned investor Eric Sprott has recently added several new energy transition ETFs bodes well for the various sectors. It also helps individual and professional investors gain broad access to these markets via a single ticker.

Another way to invest in these themes is via companies covered by InvestorIntel.com. Probably the best place to start is looking under the Critical Minerals & Rare Earths tab and the ESG & Cleantech tab.

EIA data and forecasts showing solar and wind to grow the fastest to 2050

Closing remarks

Tesla continues to lead the world toward a clean and sustainable energy future. Their Master Plan 3 gives a concise and detailed picture of what needs to be done. It details solar and onshore wind as the two cheapest forms of energy production (page 19) and lithium-ion batteries as the cheapest energy storage (page 18) solution.

The clean energy transition has already begun with solar and wind as the fastest-growing new energy generation globally and battery energy storage global growth is set to double in 2023. To meet all the 240 TWh of global energy storage needed, lithium-ion battery capacity would need to grow by several hundred times. The global electric vehicle market share reached 13% in 2022 and is a key part of this megatrend.

The global energy transition and transport electrification is the biggest trend of our time, at least until the full build-out is completed by approximately 2050. Investors should embrace the change and understand it is inevitable.

Our children, grandchildren, and future generations will also want to enjoy a clean planet one day.

When I first wrote about Lithium Ionic Corp. (TSXV: LTH | OTCQB: LTHCF) in early December, the focus of the story was on closeology ( the main project was near Companhia Brasileira de Lítio’s (CBL) Cachoeira lithium mine and Sigma Lithium Corporation (TSXV: SGML | NASDAQ: SGML) construction-stage Grota do Cirilo project) and an active drilling program. All those things are still true but the Company has added another key aspect to the business over the last few months – expanding its land holdings in the prolific Araçuaí Pegmatite District in Minas Gerais State, Brazil. In fact, last December this Canadian-based lithium-focused mining company boasted properties covering approximately 2,000 hectares. At least four transactions later, including one announced the day the last article was published, Lithium Ionic now has various working interests in over 14,000 hectares, a 600% increase.

Brazil’s Araçuaí Pegmatite District hosts 100% of Brazil’s official lithium reserves

I will concede that simply adding a whole bunch of prospective mining claims is no guarantee of success but let’s have a closer look at what the Company has picked up and the region as a whole to try and gain some perspective. The Araçuaí Pegmatite District (APD) is emerging as one of the largest lithium spodumene provinces in the world. This prolific Eastern Brazilian Pegmatite Province is known for its large and high-grade hard-rock lithium deposits. It is also considered an under-explored region that presently hosts 100% of Brazil’s official lithium reserves. The area is also well positioned, hosting excellent infrastructure including highways, access to hydroelectrical grid power, water, and nearby commercial ports. Lastly, Minas Gerais state is considered Brazil’s most favorable mining jurisdiction with a highly efficient and expeditious permitting process.

That’s all a great starting point, but in itself isn’t enough to attract more than the most speculative of investors. Fortunately, there’s a lot more meat on this bone. More specifically, Lithium Ionic’s most active properties within its Itinga project – Bandeira and Galvani, which were the focus of last December’s closeology article, are already in the heart of this emerging lithium jurisdiction. Bandeira is situated roughly 500 meters south of CBL’s producing Cachoeira lithium mine (36,000 tpa of spodumene concentrate at 5.5% Li₂O), which has been producing lithium for over 30 years. Bandeira is also approximately 700 meters north of Sigma Lithium’s Barreiro lithium deposit. Galvani is located approximately 2 km west of Sigma Lithium’s large Xuxa lithium deposit and 3 km northwest of CBL’s lithium mining operation.

Lithium Ionic’s Itinga Project (Bandeira, Galvani, Area 2-5, Borges 1-3, Clesio, and Vale 1-3), and Other Company’s Regional Projects (CBL and Sigma Lithium)

The picture above also shows most of the new acquisitions the Company has made since December including Borges, Clesio, and Vale and their proximity to existing known resources. However, the latest deal also has some closeology of its own and comes with its own drilling results. On March 13^th, Lithium Ionic announced that it had acquired Neolit Minerals Participações Ltda., a Brazilian company that owns a 40% interest in the Salinas Project with the right to acquire up to an 85% ownership in the Project. The Salinas Project, located approximately 100 km north of Lithium Ionic’s Itinga Project, includes nine exploration tenements totaling 5,713 hectares and is located directly adjacent to Latin Resources’ Colina lithium deposit, which contains an estimated 13.3Mt @ 1.2% Li2O.

Neolit’s 4,000-meter, 24-hole maiden drill program from August 2022 yielded the following highlights:

• 1.53% Li₂O over 11.36m from 43.84m (SLOE-D014)
• 1.22% Li₂O over 13.76m from 36.60m (SLOE-D015)
• 1.71% Li₂O over 9.82m from 97.70m (SLOE-D013)
• 1.19% Li₂O over 13.35m from 239.65m (SLOE-D018)

Lithium Ionic’s Recently Acquired Salanis Project: ~100 km north of the Itinga Project

With Healthy Balance Sheet, Drill Results Continue to Flow

But let’s not forget what typically gets investors in exploration companies excited – drill results. Late December Lithium Ionic reported drilling highlights of 1.71% Li₂O over 5.7m, 1.49% Li₂O over 6.7m, and 2.22% Li₂O over 3.7m, at its Bandeira Deposit.

Additional drill results from the Company’s ongoing 30,000-meter drill program at Bandeira were press released on January 24^th and included:

• 1.69% Li₂O over 9.6m,
• 1.27% Li₂O over 10m, and
• 1.61% Li₂O over 4.7m.

And then literally as this article was about to be posted, the latest drill results from Bandeira came out, highlighted by:

• 1.43% Li₂O over 17.1m,
• 1.73% Li₂O over 13.6m, and
• 1.47% Li₂O over 15m.

This brings the total drilled to date to 20,000 meters and identifies the discovery of multiple thicker and higher-grade intercepts that have extended several well-mineralized pegmatite veins to over 400 metres down dip. These latest results represent the widest and strongest lithium intercepts encountered at Bandeira to date.

Upcoming Catalysts

There are plenty of catalysts going forward. Lithium Ionic entered 2023 with a strong balance sheet of approximately C$30 million. Exploration activities are planned to continue throughout the year, including intentions to initiate a 20,000-meter drill program at the newly acquired Salinas project in the coming months.

As well, the Company has mobilized a sixth drill rig with four rigs at Bandeira and two at Galvani as it works towards completing a maiden NI 43-101 compliant mineral resource estimate by the end of June, which will form the basis for a feasibility study in the second half of the year.

And you can bet that the Company will likely continue to review prospective strategic acquisitions given how busy they’ve been over the last 4 months.

Lithium Ionic trades at a market cap of approximately C$250 million.

Tracy Weslosky chats with Nano One Materials Corp.‘s (TSX: NANO) Founder, CEO, and Director, Dan Blondal, to discuss their recent Joint Development Agreement with Umicore. Nano One and Umicore have entered into a joint development agreement to improve the throughput and cost of cathode manufacturing with the goal of making Umicore’s cathode materials using Nano One’s patented M2CAM® One-Pot process. Umicore is a massive company in the battery materials space, with €2.1 billion (turnover of €13.8 billion) in revenue in the first half of 2022, making this announcement exciting for the Nano One team.

Dan goes on to say, “We can’t get to terawatt hours of batteries and electric cars in everybody’s driveways unless we solve some of the big problems associated with the scale up of this industry.” The agreement leverages both parties’ technologies for cathode materials to drive down cost, complexity, and environmental footprint. Nano One shareholders can anticipate seeing impacts on the bottom line in years, as the project is measured in multiple phases with go/no-go milestones.

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About Nano One Materials Corp.

Nano One Materials Corp (Nano One) is a clean technology company with a patented, scalable and low carbon intensity industrial process for the low-cost production of high-performance lithium-ion battery cathode materials. It employs approximately 120 people at its innovation and commercialization hubs in British Columbia and Québec, including the only LFP plant and production team in North America. It has strategic collaborations and partnerships, that include Rio Tinto, BASF, Umicore, CBMM and various automotive OEMs.

Nano One’s technology is applicable to electric vehicles, energy storage, consumer electronics and next generation batteries in the global push for a zero-emission future. Its One-Pot process, its coated single crystal materials, and its Metal to Cathode Active Material (M2CAM®) technologies address fundamental performance needs and supply chain constraints; they also reduce equipment and raw material costs, operating expenses, and carbon intensity; and they eliminate a significant waste stream for a much-improved environmental footprint.

The company aims to pilot and demonstrate its technology as turn-key CAM production solutions for license, joint venture and independent production opportunities. This leverages Canadian talent, critical minerals, renewable energy, and a thriving ecosystem with access to large emerging markets in North America, Europe and the Indo-Pacific region. Nano One has received funding from the Government of Canada and Government of British Columbia.

To learn more about Nano One Materials Corp., click here

Disclaimer: Nano One Materials Corp. is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp., (IIC), does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

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Rather than blocking China’s ambitions, America’s verbal theatrics about policies encourage China to continue hedging its bets, including by rethinking its national-security strategy and shifting more resources to its science and technology sectors. In the worst decoupling scenario, the world’s two largest economies will end up controlling their own technology-supply systems, each with its own rules and standards. America, though, unlike China has no firm rules or standards in place on supporting key industries’ basic needs, raw materials, and energy. At the moment America is not prepared to compete with a rising Chinese industrial economy.

Two hundred years ago, Napoleon Bonaparte famously said, “China is a sleeping giant. Let her lie and sleep, for when she awakens, she will astonish the world.”

As a good sample of unpreparedness look at the politicians who support and the Ivy League MBA managers who run the global OEM automotive industry. They tell us that they are well on their way to solving the electric vehicle battery and infrastructure shortage in the non-Chinese OEM automotive world. At least that’s what they think.

Last week, the White House launched an electric vehicle (“EV”) charging action plan, designed to progress the USA towards the President’s goal of 500k chargers nationwide, and 50% of EV sales share by 2030. [italics and boldfacing, mine]

This is a patently ridiculous, unobtainable, goal, for the United States, and it childishly ups the ante with China, which has published a serious, well thought out, do-able and government-supported 40% of EV sales goal by 2030.

A dispiriting record of misjudgment, hubris, and delusion has brought the global non-Chinese OEM automotive industry to the brink of chaos, which is the opposite of where an industry should be that makes complex end-user products based on carefully articulated robust supply chains ( i.e.: one’s where each link in the chain is critical and is multi-selected so that secondary sources [backups] are kept ready at all times).

It was not really disruptive technologies, nor climate change (then known as “global warming” and before that as “global cooling”) that brought about the apparent suicide of the internal combustion engine (ICE) powered transportation industry, after more than 100 years of the mass production of ICE vehicles. It was, ironically, vastly improved quality, durability, fuel efficiency, emissions reduction, (domestic) market saturation, pricing ceilings, and shrinking margins on manufacturing in the most capital-intensive business in the world, the OEM automotive industry. This was coupled with the increasing reluctance of banks to support massive lines of credit at interest rates that the OEM automotive industry could afford. By the beginning of the 21st-century American carmakers were only making their profits from purchase and lease financing, and from the high priced, non-critical, comfort and entertainment options and gadgets on the vehicles they sold, which vehicles had, in their basic forms, become commodities.

The rise of the hedge funds at the end of the twentieth century was eclipsing wealth creation through manufacturing productivity improvements and replacing it with financialization, making money by financial manipulation. The most recent market crashes (even before 2008’s giant size one), Black Monday of 1987, the 2001 dot-com bubble, the 2008 sub-prime housing crisis, and the 2020 Covid-19 pandemic crisis were increasingly the results of pure financialization. When Elon Musk, who made his money through the innovative online service PayPal, decided that he wanted to tackle the idea of entering the multi-trillion dollar a year OEM automotive industry, by transforming it, the time, the early 21^st century, was right.

International capital had robbed and pillaged through Black Monday, the dot-com bubble and then the sub-prime housing bubble. Low Federal Funds interest rates did not deter astronomical credit card rates and facilitated low (or no) cost buyouts, privatization, and then, after asset stripping, the resales of the “restructured” companies as IPOs to the public at ludicrous values. These transactions were lining the pockets of financiers, but there was still one more giant industry, the biggest, to churn, the low margin, but huge capital deploying and using, the OEM automotive industry. It was Musk who brought a method to the madness, the revival of the Electric Vehicle powertrain to supposedly help to stop climate change due to carbon dioxide being poured into the atmosphere by human activities, such as the burning of fossil fuels for transportation.

Tesla, founded in 2005, struggled for 10 years, but then the outside financializers, perhaps, not Musk, himself, caught on. They could hype Tesla’s shares and create a bonanza.

Institutional finance has made a sucker’s game out of Tesla. It has been bid up by the market to where its market capitalization is greater not only than VW and Toyota (combined), both of which sell 15 to 20 times the number of cars and trucks that Tesla does, but also of the entire Non-Chinese OEM automotive industry! But, so what, a company the shares of which could be traded for billions of dollars turnover per day! Thus, even tiny prices changes could mean millions of dollars in revenue and, better yet, profits, each day! The hedge funds’ dream.

On any given day, Tesla shares, priced around $1,000.00, will trade 10 million shares. That’s $10,000,000,000 of buy/sell per day! By comparison the entire TSX does less than half a billion on a good day.

But, unnoticed at the time by Musk or the financializers, Lithium and the rare earths are the irreducible minimum of critical materials necessary to produce the most efficient EVs, alternate energy production and storage, and the transformation of electrical energy to useful electronic, mechanical and optical energy, in general. Therefore, these chemical elements in various forms, such as metals, alloys, and chemical compounds will always be in demand to “combat” climate change. The mainstream media, the politicians, and the academics “get this,” but, so long, as those groups are headed and staffed by individuals with no industrial or mining experience their predictions of the growth of EVs and the ultimate replacement of ICEs by EVs will be at best, magical thinking, and at worst just make-believe. There will be no complete EV transformation, so long as the, individually owned and operated, ground transportation conveyance operated by lithium-ion battery powered electric motors dominates the OEM automotive/rail/sea/aircraft transportation industries.

Why?

Until the decision-makers in government and the transportation industry discover the natural and economic limitations of the production of critical metals, the prices for those metals will remain strong. And so long as the managers of the global OEM auto/rail/aircraft/shipping industries refuse to analyze the situation or listen to the conclusions on supply from basic “informed” mineral economics, the OEM transportation industries outside of China, Japan, and Korea will descend into insolvency as their massive investments in vehicle electrification flounder without the critical metals to support them.

The increasingly superficial education of America’s bureaucrats and their lack of real-world qualification based upon actual experience has rendered America’s national government incapable of understanding the day-to-day details and problems of establishing and maintaining a secure supply chain. Offshoring was done not for greed, but for retaining competitive advantage, a concept seemingly unknown to America’s left-leaning “elites” and their unthinking followers who proselytize equality for the masses overseen by a class of highly paid bureaucrats living in isolation and relative luxury and serving an oligarchy itself based on monopoly state control of market segments primarily for their own benefit.

Let’s look at a conservative version of the 2030 car market. It’s likely that China would be the largest global producer by volume, at a rate of 30,000,000 cars and trucks that year (this is the official “goal” articulated by the Chinese government itself). The Chinese gov’t has recently also said that it requires 40% of 2030 auto production to be New Energy Vehicles (Battery alone, hybrid, and hydrogen types). To achieve this goal, the Chinese OEM automotive industry has been actively pursuing the strengthening of its battery and rare earth permanent magnet supply chains for at least the last decade. A very good example of this is the activity of the Chinese for securing supplies of lithium apparent from the chart below:

lithium ion

What “expert” analysts don’t seem to understand is that China is acquiring these lithium sources not to corner the global supply market, in the manner of a global capitalist enterprise, but to secure sufficient resources to meet the Chinese government’s mandated EV production goal by 2030. Price and profit, the sole drivers of capitalism’s interest are secondary to security of supply for the Chinese.

China has also built, as part of its dedicated industrial policy, the world’s largest lithium processing and lithium-ion battery manufacturing industry. Today China processes to battery grade 60% of the world’s lithium production and manufacturers 82% of all lithium-ion batteries.

China operates without a junior mining market, and it has realized that the identification of accessible, mineable, deposits of lithium in brines, hard rock, or clay is just the beginning of a process to complete a supply chain for the critical battery component for lithium-ion batteries. Such a total supply chain consists of mining, extracting the desired elements from the minerals, selectively separating and purifying the desired elements, transforming them into end-user forms, such as metals or fine-chemicals, and supplying them to the component and finished product manufacturers, who deliver the products to the end-use product consumer.

China has now built up a highest capacity in the world domestic lithium-ion battery manufacturing supply chain to match its highest capacity in the world total rare earth permanent magnet components supply chain.

It should be noted that Western analysts’ predictions of enough increased production of lithium to support a transformation of the ICE powered vehicle industry to battery EV powertrains, even though they are wildly and ignorantly optimistic, simply ignore the fact that most of the new lithium production over the next decade will be owned or operated by the Chinese for their domestic benefit not that of the Non-Chinese market.

China has a well thought out industrial policy and a technically proficient mandarinate that carries it out. The goal is being well on the road to absolute independence in key critical technologies beginning in 2025. To do this China will need absolute security in its supply of critical metals for the 10 technologies enumerated in its China 2025 plan.

A dynamic America could challenge China in this arena. Instead, our senescent “leaders” have gone to sleep bickering about pronouns while a giant arises that has already astonished the world.