Benchmark Mineral Intelligence on the Scale of Tesla’s Gigafactory

The latest update from Simon Moores of Benchmark Mineral Intelligence took a look at satellite images of Nevada that give an idea of the scale of Tesla Motors’ (NASDAQ:TSLA) new gigafactory near Reno. The company is currently building phase 1 of its plant, and at just 20 percent of the overall size of the finished plant, phase 1 will be the largest lithium-ion battery plant in the world.

As quoted in the note:

Benchmark Mineral Intelligence estimates for phase one, Tesla will need to purchase at least 7,000 tonnes of spherical graphite, 5,000 tonnes of lithium hydroxide, and 1,500 tonnes of cobalt in 2015 ready to begin production by January 2016.

The lithium industry is already seeing tighter supply owing to increased battery demand in Asia, especially for hydroxide. This is forcing prices upwards with some quoted prices 20% higher than in 2014.

The fact that lithium hydroxide cannot be stored for long periods of time leaves a race for fresh supply as and when it comes on the market. Battery producers will no doubt also be braced for the increased competition for raw materials that the Gigafactory will bring.

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