US Subsidizing Domestic Lithium Production

- July 14th, 2010

The US Department of Energy will be providing a $28.4 million grant to expand the Silver Peak lithium production facility operated by the Chemetall Foote subsidiary of Rockwood Holdings. The funding grant represents 50 percent of the estimated project development upgrading costs.

Lithium Ion BatteryBy Dave Brown – Exclusive to LithiumInvestingNews.com

The US Department of Energy (DOE) will be providing a $28.4 million grant to expand the Silver Peak lithium production facility operated by the Chemetall Foote subsidiary of Rockwood Holdings (NYSE: ROC). The funding grant represents 50 percent of the estimated project development upgrading costs.

The DOE grant is partially being used to install a geothermal power plant which the company expects will make the operation self-sufficient for electric power. The company believes that the reduced energy costs will increase the global competitiveness of the operation and that the combination of solar and geothermal energy should supply more than 98 percent of the energy requirements at the site. In the next few months the project expectations include the addition of a well drilling program that will double the capacity of its lithium carbonate production.

The Silver Peak plant, which is currently the only operating domestic lithium resource in the US, extracts lithium salts by brine evaporation in the Clayton Valley. The brine is pumped from salt-rich aquifers beneath the desert and evaporated in large ponds on the desert surface. The concentrated brine is then pumped to a production plant where it is converted into lithium carbonate, the basic raw material for lithium compounds.

Lithium investors will already be aware that there is growing consensus that energy storage is the next big investment opportunity because cost-efficient storage can significantly improve the profit potential and reliability of every alternative power technology.  While some observers remain critical of potential system costs and safety risks, this most recent grant from the DOE to Rockwood seems to underscore a bullish investment thesis and indicates a further commitment to clean technology and alternative fuel sources that the current administration is demonstrating.

World’s Largest Lithium Iron Phosphate Plant to be Built in Quebec

Sud-Chemie AG (ETR: SUC) , a specialty chemical company based in Germany, has announced plans to invest $80 million for the construction of a new production facility in southern Quebec, to make lithium iron phosphate used in electric vehicle battery technology.  Michel Parent, Director of Sales and marketing for Phostech Lithium was extremely optimistic about the recent announcement, “This will revolutionize the market for batteries”.

The German group is constructing the first industrial production plant for lithium iron phosphate using a new, proprietary production process based-on wet chemistry, on the site of its wholly-owned Canadian subsidiary, Phostech Lithium Inc.  Performance, cost, chemistry and safety characteristics vary across lithium ion battery types.  Depending on the selection of materials, the voltage, capacity, life, and safety of lithium ion batteries can range significantly. Efforts in lithium ion battery research have focused on nanotechnologies with improvement in both capacity and rate characteristics. The capacity of the battery to store energy can be improved through the ability to insert/extract more lithium ions from the electrode.

The company plans on launching commercial production in 2012, with sufficient output to supply batteries for 50,000 completely electric automobiles, or 500,000 electric hybrids vehicles on an annual basis.

Quebec is quickly making a compelling case to be considered as a primary location for global investment and industrial production, as it has already established itself as the number one jurisdiction for mining by the Fraser Institute annual survey based on how mineral endowment and public policy factors, such as taxation and regulation, affect mining and exploration investment.

Earlier this year, Hydro-Québec partnered with Mitsubishi Motor Sales of Canada and the city of Boucherville, Que., on the largest pilot project in Canada testing electric vehicles in practical driving situations. The $4.5 million test will use 50 Mitsubishi i-Miev cars, starting this fall.

The utility has also entered into a memorandum of understanding (MOU) with Nissan (PINK: NSANY), the Government of Québec, the City of Montréal, Québec City, and the Agence de l’efficacité énergétique du Québec to advance zero-emission mobility in Québec. The objective of this strategic allegiance is to work together to plan the necessary charging infrastructure and to promote the use of zero-emission vehicles in Québec.

With help from Assistant Editor Vivien Diniz

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8 responses to “US Subsidizing Domestic Lithium Production

  1. The limitations of qualifying “green” electric vehicles may be contingent upon the power source used to recharge the batteries. The breakdown of US energy by sources is as follows according to the most recent publicly disclosed data:

    petroleum – 37.1%
    natural gas – 23.8%
    coal – 22.5%
    renewable energy – 7.3%
    nuclear electric power – 8.5%

    A caveat to this is that some coal burning plants are convertible to natural gas relatively easily and cost effectively; depending upon energy policy direction and variable input costs.

  2. The limitations of qualifying “green” electric vehicles may be contingent upon the power source used to recharge the batteries. The breakdown of US energy by sources is as follows according to the most recent publicly disclosed data:

    petroleum – 37.1%
    natural gas – 23.8%
    coal – 22.5%
    renewable energy – 7.3%
    nuclear electric power – 8.5%

    A caveat to this is that some coal burning plants are convertible to natural gas relatively easily and cost effectively; depending upon energy policy direction and variable input costs.

  3. Producing GREEN electric vehicles in the US is pure baloney,, these vehicles will have to be recharged using electricity generated by COAL burning generating stations. Not so green after all.

  4. Producing GREEN electric vehicles in the US is pure baloney,, these vehicles will have to be recharged using electricity generated by COAL burning generating stations. Not so green after all.

  5. The Department of Energy in the United States is investing considerable resources in changing infrastructure to accommodate electric vehicles. Through the Recovery Act, the USA is making comprehensive investments in each part of the electric vehicle ecosystem. In sum, the Act included approximately $4 billion to support domestic manufacturing and deployment for advanced vehicle and clean fuel technologies. To
    date, there have been over 70 awards, worth more than $2.5 billion, to promote electric vehicle technologies. This includes cost-shared projects at each level along the innovation chain – from battery and component manufacturing to commercial deployment of vehicles and charging
    stations to advanced research and development that will help identify the next generation of electric vehicle technologies.

    There are currently 8 demonstration projects that have been initiated in the USA, representing the world’s largest electric vehicle demonstration to date. In total, these projects will lead to an additional 13,000 grid-connected vehicles and 20,000 charging stations in residential, commercial and public locations nationwide by December 2013.

  6. The Department of Energy in the United States is investing considerable resources in changing infrastructure to accommodate electric vehicles. Through the Recovery Act, the USA is making comprehensive investments in each part of the electric vehicle ecosystem. In sum, the Act included approximately $4 billion to support domestic manufacturing and deployment for advanced vehicle and clean fuel technologies. To
    date, there have been over 70 awards, worth more than $2.5 billion, to promote electric vehicle technologies. This includes cost-shared projects at each level along the innovation chain – from battery and component manufacturing to commercial deployment of vehicles and charging
    stations to advanced research and development that will help identify the next generation of electric vehicle technologies.

    There are currently 8 demonstration projects that have been initiated in the USA, representing the world’s largest electric vehicle demonstration to date. In total, these projects will lead to an additional 13,000 grid-connected vehicles and 20,000 charging stations in residential, commercial and public locations nationwide by December 2013.

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