The US is the world’s biggest oil producer — so why do we still need to import crude and ask countries like Saudi Arabia for help?

Chris Clark
Thu, July 21, 2022 

The US is the world’s biggest oil producer — so why do we still need to import crude and ask countries like Saudi Arabia for help?

Oil prices are high, energy worries are roiling the global economy, and the cost of filling up the gas tank is fueling one of the biggest economic shocks in U.S. history.

Unfortunately for American drivers, it’s familiar territory in a country that simultaneously leads the world in oil production but is among the planet’s biggest oil importers.

Gas prices have started to retreat, bringing small relief in the dead of the summer travel season. But those prices still hover at $4.40 per gallon nationally.

Considering President Biden’s failure to win production increases from Saudi Arabia — along with the criticized decision to send 5 million barrels from reserves to Europe and Asia — attention is again turning to the frustrating paradox of America’s oil export/import status.

At $75 or more for a tank, it can be frustrating to watch as domestic oil leaves U.S. ports faster than foreign oil comes in. But it’s a decades-old challenge, and only the nature of the crisis has changed.
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Leading from behind

The United States is the world’s top producer of oil (including crude, other petroleum liquids, and biofuels) and has been since 2018. According to the U.S. Energy Information Agency, it’s not even close.

The EIA reports that as of 2021, the U.S. produced 18.88 million barrels per day — or about 10 million per day more than no. 2 Saudi Arabia (10.84 million) and no. 3 Russia (10.78 million).

The EIA also notes that the U.S. is the largest oil consumer, using 20.54 million barrels a day, or 20% of the global stock, and well ahead of no. 2 China (14.01 million). The U.S. imported 7.86 million barrels of oil per day last year, the EIA report reveals.

So if America is producing roughly the same amount of oil as it imports, and interest in renewables is rising, shouldn’t it be true that the U.S. would not be so reliant on foreign oil, and that energy price anxieties should subside because U.S. stocks would be more than adequate?

Not by a long shot.

Oil price and politics

The reasons for the import/export discrepancy are actually fairly straightforward. Chief among them:

Foreign oil is cheaper: The cost of extraction is usually lower in other countries.

Rystad Energy, a private energy research firm, found in a 2020 analysis that Middle Eastern oil fields have the world’s lowest production cost at $31 a barrel. The U.S. produced oil from deepwater wells was at $43 a barrel, with fracking-produced oil costing $44 a barrel.

Energy as a weapon: Prices are frequently connected to how nations regard the environmental, economic, and geopolitical impacts of their oil.

Some concerns weigh heavier than others. Russia, for instance, is widely seen as using oil as a tool to gain concessions over its invasion of Ukraine.

The Russian invasion eventually prompted President Biden to sign a ban on Russian oil imports, but it’s unclear how much the ban has deterred Vladimir Putin. Europe now faces new uncertainty about accessibility to critical Russian oil ahead of winter.

Not all oil is the same: This is a fundamental challenge for the U.S., where much of the nation’s refining capacity is built to handle the heavy, harder-to-refine crude imported from the Middle East and elsewhere. That U.S. capacity wasn’t aimed at refining the kind of light, sweet crude that characterizes the flush oil fields of Oklahoma, Texas, and elsewhere.

Shifting U.S. refining capacity to light crude could create incredible upheaval in the market and jeopardize enormous existing investments, the American Petroleum Institute says.

Attempts to correct that mismatch have almost always stalled out, often over environmental protests or other political realities. Most believe the current situation won’t change until new refining capacity comes online or the current capacity is upgraded to handle what the U.S. produces. The costs of such a shift would be enormous.
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US is only a few days away from an ‘absolute explosion’ on inflation — here are 3 shockproof sectors to help protect your portfolio

Vale’s Plan to Turn Around $40 Billion Unit Suffers Fresh Blow

Vinícius Andrade and Mariana Durao
Wed, July 20, 2022 


(Bloomberg) -- Vale SA’s plan to turn around its copper and nickel-mining unit is taking longer than expected, risking a delay to a possible sale or spinoff of a group the miner says could be worth $40 billion.

The world’s second-largest iron producer slashed its annual goal for copper output by 19% as it grapples with extended maintenance and additional stoppages at some mills. In the first six months of the year, Vale’s nickel and copper production fell 10% and 25%, respectively.

Vale has been looking for alternatives to unlock value at its base-metals unit, which accounted for almost 15% of the Rio de Janeiro-based firm’s revenue in 2021. The company is yet to decide on whether it would spin off the division responsible for copper and nickel assets, or possibly merge that business with the assets of another company.

After facing several operational setbacks in 2021 -- including a fire at a Brazil’s Salobo copper mine and workers trapped in a Canadian mining –- the company signaled it would need another year of improving mine performance before deciding what to do with the division.

The process of stabilizing Vale’s base-metals operations “remains rocky,” Banco Bradesco BBI analyst Thiago Lofiego said. “We do note that production guidance implies a relevant recovery in production” in the second half of the year, he said. Analysts at Banco BTG Pactual SA analysts said investors may get less confident on the company’s execution.

MONOPOLY CAPITALI$M

EXPLAINER-How will Rogers' C$20 bln contested bid for Shaw play out

By Divya Rajagopal

TORONTO, July 21 (Reuters) - Rogers Communications faces a tough antitrust regulator and a July 31 deadline to close its C$20 billion ($15.5 billion) acquisition of Calgary-based Shaw Communications.

With all eyes now on the Competition Tribunal, the antitrust agency, the Competition Bureau, Canada, and Rogers-Shaw will argue their case. Here’s a look at how the legal battle is expected to play out.

WHAT IS THE DISPUTE ABOUT?

Canada's competition agency has blocked the merger on the grounds that the deal will reduce competition in Canada and said the concession offered by Rogers in the form of the sale of Freedom Mobile, a unit of Shaw, is not enough to ease regulator's concerns. Earlier this month the parties entered a two-day mediation process which remain unresolved.


WHAT ARE THE NEXT STEPS

Rogers-Shaw will have to extend their closing date of the transaction, set to expire on July 31. At the tribunal, the parties will continue their negotiations and try to find a solution. In the first week of August there will be a series of hearings based on any additional documents filed by both parties.

The tribunal will also hear the interventions filed by Quebecor, which has agreed to buy Freedom, if necessary.

Between August 15 to August 26, the parties will start pre-hearing talks to find a solution, but if no outcome is reached, the talks will continue into September and October. If the pre-hearings fail to resolve the bureau's concerns, the formal public hearing will kick off in the tribunal on November 7 and could drag till December 14.

In the past when the bureau has challenged a merger of a similar nature at the tribunal, the litigation has lasted around 12 to 14 months.

WHAT ARE THE VARIOUS POSSIBILITIES

At any point of time during this process the parties can settle through a consent agreement, where the parties agree to certain conditions under which the deal will be approved.

Besides selling Freedom Mobile, the bureau could ask Rogers to divest Shaw Mobile, the wireless business of Shaw and other assets including spectrum, Reuters reported.

Or Rogers can make the argument that the efficiency brought by the deal outweigh the anti-competition concerns and fight it out in the tribunal till a verdict is reached, lawyers familiar with the process said.

WHAT HAPPENS NEXT

If the tribunal rules in favour of the competition bureau, Rogers could approach the federal court. If the tribunal backs Rogers, then the fate of the deal will be decided by the Minister of Innovation, Science and Industry.

($1 = 1.2880 Canadian dollars)

(Reporting by Divya Rajagopal Editing by Diane Craft)

GM’s CEO Mary Barra doubles down on prediction she’ll beat Elon Musk in electric vehicle sales by 2025. Right now he outsells her by 14x


Julia Nikhinson—AP Images

Christine Mui
Wed, July 20, 2022 

Elon Musk’s Tesla currently sells more electric cars than any other company in the U.S. and holds over 60% of the U.S. market share.

With a lead like that, it seems unlikely that Tesla will be usurped anytime soon.

But General Motors CEO Mary Barra doubled down on a bold challenge to Musk earlier this week: By 2025, her company will be selling the most electric vehicles in the U.S.

Barra first made the prediction to CNBC in October 2021, replying “absolutely” when asked if she thinks GM can catch up to Tesla by the middle of this decade.

Tesla does not report U.S. numbers separate from its global sales, but Cox Automotive estimates it sold 352,471 cars to American drivers last year. That’s around 14 times more than GM’s Chevrolet brand. After a recall due to battery fire risks and paused production, Chevrolet finished the year with fewer than 25,000 electric vehicles sold, trailing third behind Tesla and Ford in U.S. sales, according to CNBC.

The prediction is part of GM’s larger goal to sell only zero-emission vehicles by 2035. It has pledged to invest $35 billion in electric and autonomous vehicles so that it can roll out 30 new battery-powered models globally leading up to 2025.

A GM spokesperson told Fortune that its four planned U.S.-based battery plants will expand capacity in North America to "build 1 million EVs by the end of 2025, as well as an additional 1 million units of capacity in China."

"We already have the best-selling EV in China. Our EV deliveries in North America in 2022 are growing again now that the Chevrolet Bolt EV and EUV are back in production," the spokesperson said.

They added that next year, the company is launching three high-volume Chevrolet EVs—the Silverado, Blazer, and Equinox—and have many other EV projects that will launch before 2025.

Beating Tesla on pricing

To beat Tesla in two and a half years, GM’s strategy is to deliver high-range electric cars at affordable prices.

“To really get to 30, 40, 50% EVs being sold, you have to appeal to people that are in that $30,000 to $35,000 price range,” Barra told the Associated Press.

Last month, the Detroit-based manufacturer cut prices on its 2023 Chevrolet Bolt EV and Bolt EUV by $6,000. The Bolt EV now starts at ​​$26,595, making it one of the least expensive electric vehicles in the U.S. The Bolt EUV sells for $28,195. And this September, GM is expected to reveal the Equinox EV, a $30,000 compact SUV set to join Chevrolet’s offerings in the fall of 2023.

The cheapest Tesla for sale right now is a rear-wheel drive Model 3, which sells for $46,990, following a 34% price hike in March. Over the last two years, the company has repeatedly hiked prices across its models. Supply-chain issues and inflation have made those increases necessary, Musk said.

Last Friday, Musk tweeted, “If inflation calms down, we can lower prices for cars,” responding to an inquiry on Tesla’s plans after pandemic supply-chain issues have been resolved.

But even before inflation troubles, Tesla’s prices were higher than GM's. When Tesla first announced its Model 3, it actively promoted, and Musk himself personally promised, a $35,000 starting price. For a brief period, Tesla did sell the Model 3 off-menu for $35,000 before getting rid of that version altogether for the 2021 model year.

Tesla did not respond to Fortune’s request for comment.

Challenges ahead for GM

Even with a competitive cost advantage, GM faces a wave of challenges to fulfill its goal of dominating the U.S. electric vehicle market. It’s struggling through the same inflationary pressures, high raw material costs, and semiconductor chip shortage that prompted Tesla’s price increases. To alleviate one of those issues, Barra said, GM will move toward buying and controlling three standard families of semiconductor chips in the coming years.

“We’re also working with a select group of strategic companies to source these for the volumes. We’ll have much better control and a stable supply,” Barra said in the interview.

With the Federal Reserve preparing to raise interest rates, and several economists warning of a looming recession, Barra acknowledged that the current business environment is “pretty volatile right now.”

“We’re looking at many different scenarios as any prudent business leader would to make sure we’re ready for whatever, however the situation evolves,” she added. “I’m an engineer, so I’m a problem solver.”

This story was originally featured on Fortune.com

GM’s Ultium battery inches ahead in the electric range race

Bloomberg News | July 22, 2022 

GM Ultium battery. Credit: General Motors

With the debut of the electric Chevrolet Blazer this week, we’re starting to get a clearer sense of the Ultium battery system General Motors has been developing along with LG the past several years and how it stacks up against the powertrains in vehicles on the market.


This has been a tortoise-and-hare race where GM got off to an underwhelming start relative to Tesla, which stormed out ahead of the pack a decade ago with longer-range EVs. While GM has been talking a lot about its plans to sell 30 EVs globally by 2025, Ford, Hyundai, Kia and Volkswagen have had more traction lately establishing themselves as challengers to Tesla.

GM has argued its Ultium-based vehicles may be a year or two behind, but they’ll be worth the wait. The automaker didn’t want to just retrofit the chassis of existing models and stick batteries into the floor. Its vehicles would deliver the longer driving range vital to win over consumers who haven’t yet been persuaded to go electric.

For the most part, GM looks like it will be vindicated, although not necessarily because of radically better range.

Two of GM’s Ultium-powered vehicles — the GMC Hummer pickup and Cadillac Lyriq SUV — just went into production, and a trio of Chevy EVs will go on sale next year. The Lyriq offers about 86 miles more driving distance on its 100 kilowatt-hour battery than the similarly priced Audi e-Tron.

GM estimates the Hummer pickup will go up to 350 miles, but with a massive battery in a 9,200-pound beast carrying all kinds of off-roading hardware, it’s difficult to gauge just how efficient it really is.

The Blazer offers the best indication yet of Ultium’s merits. The RS version will go an estimated 320 miles, compared to 318 miles for Tesla’s long-range Model Y, 314 miles for Ford’s Mustang Mach-E, 310 miles for Kia’s EV6 and 303 miles for Hyundai’s Ioniq 5. While Chevy may be able to brag about segment-leading range, it’s not a head-turning advantage.

That said, the Blazer is almost six inches longer and four inches wider than the Model Y and Mustang Mach-E, meaning it may offer a combination of slightly longer range and roomier interior. We’ll have to see once the model is available for a test drive.

As for upcoming pickups, GM’s electric Chevy Silverado will go about 400 miles on a charge with its 200 kWh battery pack when it goes on sale in less than a year. Ford’s recently launched F-150 Lightning goes 320 miles on a 131 kWh battery. So while GM will have an edge with respect to maximum range, Ford is holding its own in terms of efficiency.

The real advantage of Ultium may well be at the industrial level: GM can develop more vehicles and offer better variety. The Blazer will be available in rear-wheel drive for customers who want sportier handling, front-wheel drive for those who prioritize traction, and all-wheel drive for the snow belt. I don’t recall seeing a vehicle offering an option of front-, rear- or all-wheel drive.

That’s the bottom line: Even if Ultium ultimately doesn’t offer a huge advantage in terms of battery chemistry or power density, it enables GM to manufacture and market a much broader lineup of models.

(By David Welch)

Deep price cut leads electric 2022 Chevy Bolt EUV's recovery from devastating recall

Mark Phelan, Detroit Free Press
Wed, July 20, 2022 

Chevrolet cut the 2022 Chevrolet Bolt EUV electric vehicle's price $6,300.

Back from an embarrassing production halt due to faulty batteries, the 2022 and 2023 Chevrolet Bolt EUV and Bolt make a strong case for being the best affordable electric vehicle on the market.

Deep price cuts and appealing features including up to 252 miles on a fully charged battery make them attractive alternatives to flashier, more expensive EVs like the Cadillac Lyriq and Ford F-150 Lightning and Rivian R1T.

GM reduced the sticker prices of a Bolt small car $5,900 and cut the slightly larger SUV-style Bolt EUV by $6,300. The new prices will be reflected on the sticker on 2023 models, but the same discount comes off the price of the remaining 2022s.

And, unlike EVs that brag about monthslong waiting lists like keeping the customer waiting is a good thing, you can probably walk out of a dealership with either today. Cox Automotive estimates Chevy has a four-month supply of Bolt EUVs and nearly two months of the smaller Bolts on hand.

That makes either Bolt a good entrée to EVs for people who don’t want to pay a premium for the latest battery technology.

The Bolt was a sensation when it debuted as a 2017 model, sweeping major awards including North American Car of the Year and Free Press Car of the Year. The Bolt EUV, which is a bit bigger and styled to look like a small SUV — it doesn’t offer all-wheel drive, though — debuted in 2021. It was the first Chevy to offer General Motors’ revolutionary Super Cruise hands-free highway driving assistant. It’s still the least expensive vehicle with the system by a wide margin.

Chevrolet cut the 2022 Chevrolet Bolt EUV electric vehicle's price $6,300.

More: Cadillac’s enhanced Super Cruise is just that. Super.

More: 2023 Cadillac Lyriq EV is the answer to some questions, leaves others open

More: Chevrolet Bolt EV to disappear from lineup as new technology rolls out

How much?

The Bolt looks like just another compact small hatchback, a couple of inches shorter than a Kia Soul, but with less character.

That’s largely why Chevy developed the Bolt EUV: It needed an electric vehicle with a little visual pizzazz to boost sales. The EUV is visually distinctive — 6.3 inches longer, fractionally wider and taller, with styling tweaks that make it look more substantial and increase passenger space.

Prices for the 2023 Bolt and Bolt EUV start at $25,600 and $27,200, respectively. All prices exclude destination charge.

Chevrolet cut the 2022 Chevrolet Bolt EUV electric vehicle's price $6,300.

All Bolts come with a 65 kwh lithium-ion battery. A 200-hp electric motor drives the front wheels. Starting with the 2022 model year, all Bolts can accept DC fast charging in addition to the original model’s 240-volt capability.

The Bolt has an EPA estimated range of 252 miles on a full charge. The EUV rates 247 miles.

A full charge at 240v takes about seven hours, perfect for overnight charging at home, the way the Department of Energy estimates more than 80% of EV charging happens.

You get up to 95 miles range in 30 minutes at a DC fast charger, but that’s much slower than new EVs. The Bolt and EUV can only accept DC charging up to 55 kW, while new EVs can charge at 150, 190 or 350 kW.

I tested a top-of-the-line 2022 Bolt EUV Premier. A sporty Redline edition is the only meaningful change coming for the 2023 model.

My test vehicle cost $35,895, after subtracting the $6,300 discount from the window sticker.

The silver — aren’t they all? — EUV Premier was equipped with seven-speaker Bose audio, Super Cruise, panoramic power sun roof, navigation, 10.2-inch touch screen, wireless charging, Apple CarPlay, Android Auto, push-button start, pedestrian assist and automatic braking, heated front seats, power driver’s seat, 17-inch wheels, LED headlights and running lights.

Chevrolet cut the 2022 Chevrolet Bolt EUV electric vehicle's price $6,300.
Behind the wheel

2022 Chevrolet Bolt EUV Premier

Front-wheel-drive five-passenger compact electric vehicle

Price as tested: $35,895 (excluding $995 destination charge)

Reasons to buy: Affordable electric vehicle, Super Cruise available

Shortcomings: DC charging speed, regenerative braking less advanced than newer EVs

The 2023 Chevrolet Bolt EUV Redline Edition includes 17-inch black-painted aluminum wheels. Preproduction model shown. Available Summer 2022.

Why is GM giving me such a deal?

The Bolt and Bolt EUV face several obstacles.

Their most direct competitors, the Nissan Leaf and Hyundai Kona electric, get a $7,500 federal tax credit that comes off the sticker price.

GM no longer qualifies for that credit, paradoxically because it’s sold too many EVs. The credit phases out after an automaker sells 200,000 EVs. It expires because it was intended to encourage automakers to build EVs. The assumption was that after selling 200,000, they wouldn’t need any more convincing, but the effect is that the automakers that began making EVs early are penalized versus latecomers.

Only GM and Tesla have sold that many EVs. Toyota’s likely to hit the ceiling later this year.

President Joe Biden proposed raising the cap to encourage more people to buy EVs, but the a Senate caucus quashed the bill.

The 2023 Chevrolet Bolt EUV Redline Edition includes 17-inch black-painted aluminum wheels. Preproduction model shown. Available Summer 2022.

On top of that disadvantage, the Bolt’s styling, batteries and electronics are out of sync with the EVs drawing the most attention today. GM developed the Bolt on the assumption that EV buyers wanted modest little vehicles that maxed out on efficiency, not style or luxury.

It only took a decade watching Tesla build electric sports cars and hyping its super fast “ludicrous mode” for the rest of the auto industry to figure out that’s not the case. The result: Today’s crop of fast and gorgeous Lucid and Cadillac luxury cars, 1,000-hp Hummer EVs and $90,000 Ford F-150 Lightning Platinums.

Completing a sales-killing trifecta, the Bolts had a disastrous recall under which GM told owners their vehicles could burst into flames while charging. It took months for battery supplier LG to fix the problem and production to resume, but all appears to be well now.

Still, a deep price cut was advisable.

Chevrolet cut the 2022 Chevrolet Bolt EUV electric vehicle's price $6,300.
Safety and driver assistance features

Automatic emergency braking


Front pedestrian braking


Blind spot alert


Cross traffic alert


Automatic high beams


Lane keeping alert and assist


Following distance indicator


Forward collision alert


Adaptive cruise control


Super Cruise
Driving impressions

The Bolt EUV is a roomy and comfortable car. The rear seat has plenty of legroom and the long, SUV-style roof provides good headroom.

The electric motor delivers immediate acceleration and the steering is direct and responsive. The EUV doesn’t pretend to be a sporty vehicle, but its power and maneuverability are everything most owners are likely to want.

A paddle on the left side of the steering wheel allows you to increase energy regeneration when slowing down. I got used to it fairly quickly, but didn’t find it as useful as the variable one-pedal driving settings many EVs offer. In addition, the placement of a paddle on just one side of the steering wheel made it inaccessible in some turns, just when I wanted the most control over deceleration.


EV engineering is progressing rapidly and that’s the most obvious example of a feature that was class-leading when the Bolt was originally engineered, but now trails the competition.

The instruments and controls are clear and generally easy to use. Toggles manage climate functions including temperature, fan speed, seat ventilation and heating. There’s a volume dial, but not one for tuning.

The volume dial, touch screen home button and a dial to scroll through features are closely spaced in a spot that’s hard to see behind the steering wheel. I occasionally hit the wrong one, but owners will probably get used to them.

Over a week’s driving, the EUV’s computer-estimated range tracked closely with my real-world energy efficiency.

There’s a lot to like about the Bolt EUV, but the affordable little EV won’t be around forever. The Orion, Michigan, plant that builds it is scheduled to switch to new vehicles with GM’s latest technology in the next 18 months or so. For now, though, the Bolt EUV is an affirmative answer to the question, “Are there any affordable electric vehicles?”

The 2023 Chevrolet Bolt EUV Redline Edition includes 17-inch black-painted aluminum wheels. Preproduction model shown. Available Summer 2022.
2022 Chevrolet Bolt EUV at a glance

Base price: $33,000 (all prices exclude destination charge)

Front-wheel drive compact 5-passenger electric vehicle

On sale now

Specifications as tested:

Price as tested: $35,995

Motor: Single electric motor

Output: 200-hp/150kW; 266 pound-feet of torque

Transmission: Single-speed direct drive

EPA fuel estimated range: 247 miles

MPGe equivalent to gasoline: 125 city/108 highway/115 combined. 29 kWh/100 miles

EPA estimated annual fuel cost: $550

Charging time: 7 hours @ 240v and 48 amps; 95 miles in 30 minutes with 55kW DC charging

Wheelbase: 105.3 inches

Length: 169.5 inches

Width: 69.7 inches

Height: 63.6 inches

EPA passenger volume: 96.5 cubic feet

Cargo volume: 16.3 cubic feet behind rear seat; 56.9 with rear seat folded

Curb weight: 3,715 pounds

Assembled in Orion, Michigan

This article originally appeared on Detroit Free Press: Looking for an affordable EV? Grab a Chevy Bolt EUV while you can.

Graphite deficit starting this year, as demand for EV battery anode ingredient exceeds supply

Rick Mills - Ahead of the Herd

| July 22, 2022 | 

Flake graphite. (Image by 2×910, Wikimedia Commons).

Although EV market share is still tiny compared to traditional vehicles, that is likely to change in the coming years as major economies transition away from fossil fuels and move into clean energy.


US President Joe Biden has signed an executive order requiring that half of all new vehicle sales be electric by 2030. China, the world’s biggest EV market, has a similar mandate that requires electric cars to make up 40% of all sales. The European Union is also seeking to have at least 30 million zero-emission vehicles on its roads by then.

According to the IEA’s Global Electric Vehicle Outlook, if governments are able to ramp up their efforts to meet energy and climate goals, the global electric vehicle fleet could reach as high as 230 million by the end of the decade, compared to about 20 million currently.

With more electric cars comes the need for more raw materials like lithium, nickel and graphite to build batteries. The IEA believes mineral demand for use in EVs and battery storage must grow at least 30 times by 2040 to meet various climate goals.

Fastmarkets forecast that EV sales will experience a compound annual growth rate of 40% per year through 2025, when EV penetration is expected to reach 15%. After that, EV market share is expected to rise further, reaching 35% by 2030.

One mineral that has been overlooked, but is an essential part of vehicle electrification, is graphite.

At AOTH, we believe graphite represents a “backdoor” market opportunity brought about by the clean energy transition. This is for several reasons:
Graphite as anode material

The lithium-ion battery used to power electric vehicles is made of two electrodes — an anode (negative) on one side and a cathode (positive) on the other. At the moment, graphite is the only material that can be used in the anode, there are no substitutes.

This is due to the fact that, with high natural strength and stiffness, graphite is an excellent conductor of heat and electricity. Being the only other natural form of carbon besides diamonds, it is also stable over a wide range of temperatures.

The cathode is where metals like lithium, nickel, manganese and cobalt are used. Depending on the battery chemistry, there are different options available to battery makers (see below).

Graphite is thus considered indispensable to the global shift towards electric vehicles. It is also the largest component in lithium-ion batteries by weight, with each battery containing 20-30% graphite. But due to losses in the manufacturing process, it actually takes 30 times more graphite than lithium to make the batteries.

According to the World Bank, graphite accounts for nearly 53.8% of the mineral demand in batteries, the most of any. Lithium, despite being a staple across all batteries, accounts for only 4% of demand.

An electric car contains more than 200 pounds (>90 kg) of coated spherical purified graphite (CSPG), meaning it takes 10 to 15 times more graphite than lithium to make a Li-ion battery.

Graphite is so essential to a lithium battery, that Tesla’s Elon Musk famously said, “Our cells should be called Nickel-Graphite, because primarily the cathode is nickel and the anode side is graphite with silicon oxide.”

Demand overflow

The anode material, called spherical graphite, is manufactured from either flake graphite concentrates produced from graphite mines, or from synthetic/artificial graphite. Only flake graphite upgraded to 99.95% purity can be used.

An average plug-in EV has 70 kg of graphite, or 10 kg for a hybrid. Every 1 million EVs requires about 75,000 tonnes of natural graphite, equivalent to a 10% increase in flake graphite demand.

According to Benchmark Mineral Intelligence (BMI), the flake graphite feedstock required to supply the world’s lithium-ion anode market is projected to reach 1.25 million tonnes per annum by 2025. The amount of mined graphite for all uses in 2021, was just 1 million tonnes. (USGS)

Furthermore, the London-based price reporting agency forecasts demand for graphite from the battery anode segment could increase by seven times in the next decade as the growth in EV sales continues to drive construction of lithium-ion megafactories.

Bloomberg

NEF expects demand for battery minerals to remain robust through 2030, with graphite demand increasing four-fold.

The International Energy Agency (IEA) goes 10 years further out, predicting that growth in demand for selected minerals from clean energy technologies by scenario, 2020 relative to 2040, will see: increases of lithium 13x to 42x, graphite 8x to 25x, cobalt 6x to 21x, nickel 7x to 19x, manganese 3x to 8x, rare earths 3x to 7x, and copper 2x to 3x.

Source: UBS

   

Source: IEA

Supply squeeze

As vehicle electrification continues, and few new sources are discovered worldwide, BMI estimates the graphite market could reach a deficit as early as this year, with the supply shortfall growing to 8Mt by 2040; to fill this gap, the mining industry would need to produce nearly 8x as much graphite as it does currently, over the next 18 years.

Source: BMI

On June 7, in an article titled ‘How a battery metals squeeze puts EV future at risk’, The Washington Post reported, Factory lines churning out power packs to fuel a clean energy future are being built faster than strained supply chains can keep up. A global rush to lock in stocks of lithium, nickel, cobalt and other key ingredients from a handful of nations has sent prices hurtling higher… While factories can be built in about 18 months, mines can typically take seven years or longer to come online.

June saw repeated concerns over the supply of battery metals forecast for the decade ahead, including from Tesla. CEO Elon Musk reportedly explained that production has been hindered by raw material shortages and shutdowns of assembly lines in China.
Lack of diverse supply

Almost all graphite processing today takes place in China because of the ready availability of graphite there, weak environmental standards and low costs. Nearly 60% of the world’s mined production last year also came from China, making it a dominant player in every stage of the graphite supply chain.

After China, the next leading graphite producers are Mozambique, Brazil, Madagascar, Canada and India. The US does not produce any natural graphite, therefore it must rely solely on imports to satisfy domestic demand.

Data source: USGS. Image by Visual Capitalist

The level of foreign dependence has increased over the years. The US imported 38,900 tonnes of graphite in 2016, then peaking at 70,700 tonnes in 2018.

The latest publication from the USGS shows that imports in 2021 totaled 53,000 tonnes, of which 71% was high-purity flake graphite, 42% was amorphous, and 1% was lump and chip graphite.

The main import sources were China (33%), Mexico (21%), Canada (17%) and India (9%).

Since China controls all spherical graphite processing, the US is not actually 33% dependent on China for its battery-grade graphite, but 100%.

This is why the US government has included graphite among the 35 minerals that it deems “critical to its national security and economy.”

A White House report on critical supply chains showed that graphite demand for clean energy applications will require 25 times more graphite by 2040 than was produced worldwide in 2020.
Graphite pricing

The value of natural graphite has increased significantly over the course of the past year, with demand continuing to outstrip supply. According to Benchmark Mineral Intelligence, prices have gone up steadily since January 2021 on all types of graphite, with fines increasing 44.50% from USD$500/ton in January of 2021 to $723/t in May of 2022. Using those same dates, large flake graphite prices climbed 19.85% from $983/t to $1,187/t, and spherical graphite rose 8.39% from $2,958/t to $3,207/t.

More recently, flake and spherical graphite prices are both up slightly. According to Fastmarkets, for the week ending June 16, the spot price of China flake graphite 194 EXW was up 0.37% over 30 days, and 19.39% over 360 days. Graphite produced at 94-97% purity is considered best suited for batteries, before it is upgraded to 99.99% purity to make spherical graphite. Spherical graphite 99.95% min EXW China was up 1.58% over the past 30 days, for the week ended June 16.

China flake graphite 94% C (-100 mesh) was priced at $830 per ton, with Europe flake graphite of the same grade and size selling for $920/t.

Source: Fastmarkets

Conclusion

During a time of price weakness for a number of industrial metals (copper, zinc, aluminum, for example), the price of graphite, being critical to the electric-vehicle transition, has held up extremely well.

Flake and spherical graphite are both trending higher, in fact the prices of all types of graphite (fines, large flake, spherical) have increased significantly since January 2021, on the back of robust demand from battery-makers and EV manufacturers, and limited supply.

According to BMI, in 2022 demand for lithium-ion batteries is growing at its fastest ever, on course for a year-on-year growth rate of nearly 50%.

Source: BMI

While this will increase the need for other battery minerals, such as lithium, nickel and cobalt, graphite remains the highest-intensity mineral in the lithium-ion battery by weight, with over 570,000 tonnes of natural flake to be consumed in 2022.

Yet as Seeking Alpha observes, consumer demand for electric vehicles surpasses our ability to supply them. Waiting times for EVs are lengthening, a lithium ion battery shortage is hitting many automakers, and, most crucially, key raw material prices are at all-time highs.

This bodes well for companies with large graphite deposits in safe jurisdictions, that can not only capitalize on high prices, but contribute to the local graphite supply chain and lessen the dependence on China for graphite mining and especially, graphite processing.

For years neglected by governments, critical minerals like graphite are finally getting the attention they deserve. In June, the Canadian government unveiled its low-carbon industrial strategy, that will see Ottawa partnering with each province to “identify, prioritize and pursue opportunities”. Specific to critical minerals, this means battery manufacturing in Quebec and electric vehicle production in Ontario.

Natural Resources Minister Jonathan Wilkinson pointed to CAD$3.8 billion already earmarked for critical minerals in the April budget. On top of that, “we have a billion and a half dollars in the Clean Fuels Fund, we have eight billion dollars in the Net Zero Accelerator, we’re setting up the Clean Growth Fund, we have the Canada Infrastructure Bank,” Bloomberg quoted him saying. He added:

“The average mine takes 15 years to bring into production. In the context of the energy transition, we don’t have 15 years if we’re actually going to provide enough of the minerals to be able to support just the battery development. So it behooves us to bring everybody into the room to figure out how to do it.”

At AOTH, we couldn’t agree more. Canada’s new industrial strategy dovetails with what is happening south of the border.

The US, which has long sought to improve its battery supply chain, recently invoked its Cold War powers by including lithium, nickel, cobalt, graphite and manganese on the list of items covered by the 1950 Defense Production Act, previously used by President Harry Truman to make steel for the Korean War.

To bolster domestic production of these minerals, US miners can now access $750 million under the act’s Title III fund, which can be used for current operations, productivity and safety upgrades, and feasibility studies. The DPA could also cover the recycling of these materials.

Later this year, the Department of Energy will begin doling out $6 billion in grants for battery production, half of which are earmarked for domestic supplies of materials and battery recycling.

The Biden administration has already allocated $6 billion as part of the $1.2 trillion infrastructure bill, towards developing a reliable battery supply chain and weaning the auto industry off its reliance on China, the biggest EV market and leading producer of lithium-ion cells.

Among the minerals key to winning the global EV race, graphite arguably is most significant and should be a top priority for the US, given it is the essential ingredient in electric vehicle batteries.

A global graphite shortage is a matter of when, not if, without new sources of supply. For the US, which is 100% dependent on foreign imports of the material, it’s a ticking time bomb that could completely derail the nation’s vehicle electrification and decarbonization ambitions.

This all goes back to the importance of establishing a reliable, secure and sustainable “mine to battery” EV supply chain, beginning with a domestic graphite source and integrating it with processing, manufacturing and recycling to create a full circular economy.

(By Richard Mills)

Chile rejects second Anglo American project in two months
Cecilia Jamasmie | July 22, 2022 | 

El Soldado copper mine operations in Chile. (Image courtesy of Anglo American | Flickr.)

Anglo American (LON: AAL) has suffered a new setback in Chile after the environmental commission of Valparaiso, Coeva, rejected the company’s $40 million operational continuity project for its El Soldado copper mine, 125km north of the capital Santiago.


Despite having the backing of the country’s environmental evaluation authority, which recommended the project’s approval, the local regulator scratched El Soldado Phase V project with 10 voting against and only two in favour.

The news, divulged through social media, was confirmed to MINING.COM by the London-based company’s spokesperson.

Aaron Puna, executive president of Anglo American said in a public statement the company was surprised with the resolution.

“The project had a Consolidated Evaluation Report (ICE) that recommended its approval and was backed by all the services that participated in the environmental assessment process,” Puna said.

This is the sixth mining project vetoed by the government of President Gabriel Boric, who assumed in March this year and the second for Anglo American.

In May, a Chilean environmental regulator formally rejected the company’s application for a $3 billion expansion of its flagship Los Bronces copper mine.

The asset, one of Anglo American’s two largest copper operations, has been mined for over 150 years and is running out of high-grade ore. The Los Bronces Integrated Project (LBIP) would have allowed the company to tap higher grade ores from a new underground section of the mine, extending its life through 2036.

Anglo American has been the majority-owner of El Soldado since 2002. The mine started operations in 1980 and produced 42,300 tonnes of copper last year, making it relatively small by Chilean standards.

Diego Hernández, president of the country’s National Mining Society (SONAMI) condemned Coeva’s decision.

“It seems to us that is a very bad sign to see a significant number of projects rejected lately, not only new mines, but operational continuity projects, which are left with no other option than closing down,” he told local newspaper La Tercera.

Copper deposits are among the hottest assets in mining right now, mainly due to the metal’s use in electric vehicles (EVs) and the global green energy revolution.

Experts estimate the copper industry needs to spend more than $100 billion to build mines able to close what could be an annual supply deficit of 4.7 million tonnes by 2030.

Europe’s energy crisis risks slashing aluminum production further

Bloomberg News | July 22, 2022 

Aluminum Dunkerque in France. (Image courtesy of Rio Tinto)

Norsk Hydro ASA issued a fresh warning over the grave threat that Europe’s energy crunch poses to aluminum supply, saying the heavy slate of production cutbacks seen so far is at risk of doubling over the winter months.


Aluminum is one of the most energy-intensive metals to make, and the surge in power prices already knocked about 900,000 tons of smelting capacity offline in Europe and North America over the past two years, Chief Financial Officer Pal Kildemo said in an interview on Bloomberg Television. With more than a third of smelters globally currently losing money, there’s a risk that another 1 million tons of capacity will be curtailed.

Hydro’s aluminum smelters in Norway are in a comparatively strong position because they’re supplied with captive hydroelectric power, but the company cut production sharply in Slovakia, where surging power prices have made its Slovalco plant highly unprofitable. While the strain on supply caused a spike in aluminum prices on the London Metal Exchange earlier this year, they’ve since fallen sharply as demand worries mount, adding to the strain on smelting margins.

“This is huge for the European aluminum industry, which has become smaller and smaller over the years,” Kildemo said, commenting on the risk of further industry closures. “If we don’t get anything on the regulatory side, and if energy prices don’t fall or LME prices don’t increase, it looks challenging for 2023 for Slovalco.”

While the risks to supply are growing, Kildemo also flagged that the demand outlook is deteriorating fast. Like rival Alcoa Corp., Hydro boosted shareholder returns sharply after a strong second quarter, but Kildemo warned that a five-quarter run of record results could be drawing to a close.

Oslo-based Norsk Hydro has increased its long-term hedging to cover a quarter of its portfolio, and Kildemo said protecting against a further drop is prudent as the risks to demand grow. Aluminum has declined more than 12% this year on the LME.

“I’d be happy for us to lose money on those hedges because that means we’d make money on the rest of the portfolio, but in uncertain markets having something extra on the downside is usually worth more,” he said.

(By Mark Burton and Tom Mackenzie, with assistance from Stephen Treloar)

Researchers figure out how to accurately detect compounds in rocks
Staff Writer | July 22, 2022 | 

Calcite and Paleofill. (Reference image by National Parks Gallery, Picryl).

A research team from the University of Málaga has validated the use of a system for more accurate detection of compounds in rocks by fusing different types of data obtained with laser technology.


The technology, known as laser-induced breakdown spectroscopy (LIBS), involves the emission of a light beam that transforms the state of matter from solid to plasma. In just one-millionth of a second, the system captures the emission of the elements that make up the sample. At the same time as the change of matter occurs, an acoustic wave originates from the detonation of the mineral.

The experts involved in this study tested the solution in the laboratory simulating the atmospheric conditions of the earth and Mars.

In detail, they fused spectral information and that provided by the propagation of sound to obtain more reliable data.

In a paper published in the journal Analytical Chemistry, the scientists confirm that this model for the analysis of materials achieves a better definition of the compounds in less time and at a scale of analysis approaching the attogram, that is, an amount of mass equivalent to that of a virus.

According to Javier Laserna, one of the study’s co-authors, in comparison with the results obtained with LIBS or the acoustic dataset separately, the results provided by the new system improve the information from 90% and 77% respectively to 92% for the earth’s atmospheric conditions, and from 85% and 81% to 89% for Mars.

“We demonstrate for the first time that the acoustic wave generated by the laser on the sample can be used to create a statistical descriptor and to improve the capacity of LIBS for rock differentiation,” Laserna said.

Fusion cuisine with LIBS

LIBS is widely used by the scientific community to determine the composition of rocks, minerals and soils under different conditions because of its high performance, immediacy and reliability. However, the Málaga team went a step further by simultaneously assessing the acoustic response input provided by laser-induced plasmas. This way, they were able to identify geological samples much more accurately.

Specifically, the researchers selected two groups of minerals, six rich in iron and six rich in calcium. The initial hypothesis was that the elemental composition should generate very similar LIBS spectra within each group.

Calcium in particular is one of the main components in rock formation, and its presence and arrangement provide relevant information for studying the origin of the planets Mercury, Venus, the earth and Mars.

The process for obtaining the LIBS data and the acoustic responses is achieved from the same test, which consists in applying a laser to the sample. However, the information they yield is completely different.

In LIBS, the signal comes mainly from atoms that have undergone a process of fragmentation, atomization, ionization and excitation.

In other words, the matter is transformed into plasma and the atoms are made available for analysis. In the case of acoustic information, the wave is generated by the expansion of the plasma in the atmosphere. Therefore, the combination of the two provides complementary information to extract new data that more clearly identifies the different elements and their arrangement.

In the researchers’ view, this model could be of great interest for the analysis of materials in complex environments – for example, those carried out in other atmospheres, such as explorations of Mars.

 

Nigeria Unable To Benefit From High Oil Prices

By Julianne Geiger - Jul 22, 2022, 

Nigeria’s debt has exceeded its revenue in the first four months of the year despite high oil prices, Nigeria’s Budget Office has revealed on its website.

Oil-rich Nigeria, unlike other crude oil producers, has found it impossible to reap the benefits of today’s high oil prices, with oil revenues coming in 61% below target during the period. That’s despite crude oil trading at highs not seen in years.

Nigeria’s crude oil production was relatively steady at 1.376 million bpd in the first quarter of this year compared to the previous quarter, according to OPEC’s Monthly Oil Market Report, and 34,000 bpd below the same quarter last year. While Nigiera’s production slipped further in June 2022 to 1.238 million bpd, Nigeria’s oil revenue problem didn’t stem from a drop in production.

Instead, Nigeria continues to battle oil theft, pipeline vandalism, and most critically, high gasoline prices, which the country subsidizes.

The severe revenue shortfall does not allow Nigeria to service its debt.

The cost of Nigeria’s gasoline subsidy will be about 10 times what it had originally budgeted, Nigeria’s President Muhammadu Buhari revealed in an April letter to lawmakers. That cost of that subsidy is expected to be just south of $10 billion.

Unlike other major oil producers that have benefited handsomely from higher crude oil prices, Nigeria has negligible refining capacity, forcing it to import nearly all of the gasoline it consumes. And Nigeria must pay today’s high costs for that gasoline while continuing to sell it onto the consumer for much less in order to keep prices at 39 cents.

The value of Nigeria’s petroleum imports far outweighs the value of its petroleum exports—to the tune of $43 billion.

Nigeria has toyed with the idea of ending the gasoline subsidies, but the specter of fuel protests caused the President to scrap those plans. 

By Julianne Geiger for Oilprice.com

IMPERIALI$M
China’s Secret Debt Deals With Tajikistan Are A Cause For Concern

By Eurasianet - Jul 21, 2022,

At the start of 2022, Tajikistan owed as much as $1.98 billion to state-run Export-Import Bank of China.

Political scientist Parviz Mullojanov warns that, “amassing Chinese debt is playing with fire.”

The burden of the debt is already forcing Tajikistan to give away the family silver – or family gold, to be more accurate.

A ubiquitous sign seen around Tajikistan’s capital speaks volumes about the country’s reliance on its eastern neighbor: “Assistance from China for a common future.”

The words are typically emblazoned on buildings and buses paid for with loans and grants issued by Beijing.

One prime example is the new premises of parliament. That complex, which is going up where the headquarters of the Soviet-era Communist Party used to stand, is being completed with a $250 million grant.

Another $120 million in handouts have been given by China to build a new city hall.

In theory, this all comes without strings attached, but analysts are not convinced.

“This all feels very disturbing,” Tajik political scientist Parviz Mullojanov told Eurasianet. “This is a very dangerous trend, especially as there are also large debts. Amassing Chinese debt is playing with fire. At any moment now, this could serve as a pretext for political and geopolitical expansion.”

The numbers tell an eloquent story.

Of the $3.3 billion that Tajikistan owed to international creditors at the start of 2022, 60 percent – $1.98 billion – is owed to the state-run Export-Import Bank of China, better known as Eximbank. Sri Lanka’s massive liabilities before China have made international headlines in recent months, and yet, what that country owes to Beijing accounts for only 10 percent or so of its foreign debt pile.

The bulk of Tajikistan’s annual debt repayments are, unsurprisingly, earmarked for China, but the rate at which money is being paid back will be far from reassuring for the country’s bean-counters.

Of the $131.9 million repaid by Tajikistan in 2021, $65.2 million went to China in one form or another. Almost $22 million of the money paid to China was interest accrued.

In terms of interest payments, only the Eurobond issued by Tajikistan’s Finance Ministry in 2017 proved more costly last year. That bill was $35.7 million.

Chinese debt has usually been extended for the purposes of building or overhauling transport infrastructure or energy projects. Work is more often than not implemented by Chinese companies themselves.

Secret deals

Because Chinese debt agreements are shrouded in secrecy, working out the terms, even the size of the credit, is complicated.

To take one example, Eximbank in 2014 agreed to extend credit to complete the Vahdat-Yovon railway, a link between the center and south of the country. When the Dushanbe to Kulob route – of which that Vahdat-Yovon section constitutes one part – was inaugurated by President Emomali Rahmon in August 2016, all Tajik state media noted was that the project cost 985 million somoni ($125 million at the rate of the time) to finish. Khovar state news agency did not state where any of the money had come from or who had done the construction.

But in early 2015, first deputy Finance Minister Jamoliddin Nuraliyev told reporters that Eximbank had contributed a loan of at least $68 million at preferential rates toward completion of the Vahdat-Yovon railroad. The tender for the contract was reportedly handed to the state-owned China Railway Construction Corporation without even the semblance of an open bidding process.

Another important project mostly underwritten by Eximbank was the epic effort, which started in 2006 and ended in 2013, to overhaul the high-altitude Dushanbe-Chanak road from the capital to the northern Sughd province. The Beijing-based lender’s contribution on that occasion was an almost $290 million loan. Once again, a Chinese company – the colossal engineering company China Road and Bridge Corporation – got the contract, meaning the money was in effect quickly re-routed back into China, although the debts remained in Tajikistan.

As a China Road and Bridge Corporation executive told Chinese state media in 2019, his company has built 728 kilometers of road worth a total of $779 million in Tajikistan.

The relatively pristine Dushanbe-Chanak route is undoubtedly a boon to Tajik motorists, although many drivers grumble at the fact that they are required to pay tolls to a company registered in the British Virgin Islands. How much of those collected tolls, if any, go toward servicing foreign debts is a mystery, like so much else that has to do with Chinese debt.

Mullojanov argued that this approach was part of a well-understood strategy.

“China has a standard policy for all countries: They need to employ their own workforce, so they send their own people and industrial resources to do all the projects. China needs a market for its industry,” Mullojanov said.

Other analysts have taken a more benevolent view of Beijing’s loan agenda, however.

Marina Rudyak, a scholar at Heidelberg University’s Institute of Chinese Studies, said that her analysis of Chinese official and academic discourse shows that Beijing believes debt will in the final analysis lead to economic growth and, accordingly, less debt.

“It is, you could argue, a more need- and want-centered than a risk-centered perspective,” Rudyak wrote in emailed remarks. “For Tajikistan in particular, I think we have to consider the role China ascribes to it in particular in the Afghanistan context. It needs a stable Tajikistan and will probably pour as much money as it believes it takes to keep it stable, even with prospects of loan defaults, because the alternative of Tajikistan collapsing into a new civil war or similar is much more costly.”

Paying in kind

In the short term, however, the burden of the debt is forcing Tajikistan to give away the family silver – or family gold, to be more accurate.

In 2016, Xinjiang-based company TBEA put the final touches to work on a 400-megawatt power plant in Dushanbe known as TETs-2. The Tajik government only contributed $17.4 million to the $349 million project. The rest came from TBEA itself. Three years later, to pay off that debt, Tajikistan simply gave TBEA the concession to develop its Upper Kumarg and Eastern Duoba gold mines, both located in the northern Ayni district. The decision was green-lit by the rubber-stamp parliament. China-based news website Securities Times at the time cited TBEA chairman Zhang Xin as saying that if the mines did not contain sufficient gold to cover their costs, Tajikistan would grant a development license to yet another deposit.

Related: How China Could Trigger The Next Sharp Selloff In Crude

Warming to this approach, parliament later that same year voted to exempt another Chinese company, Kashgar Xinyu Dadi Mining Investment, from all types of taxes and customs duties for a period of seven years. The miner was also granted development rights over a silver deposit in the high-altitude Pamir region.

It is not known for certain what Kashgar Xinyu Dadi Mining Investment did to earn such generous treatment, but the whispered speculation is that it was in return for the Chinese government underwriting the parliament and Dushanbe city hall projects.

The question that arises perennially is how much Tajikistan will be prepared to give away as it continues struggling to settle all its liabilities.

Critics of the government point, for example, to the contentious matter of how Tajikistan in 2011 ceded around 1,100 square kilometers of land, equivalent to around 1 percent of the country’s territory, to Beijing. This means Tajikistan went, according to official data, from covering an area of 143,100 square kilometers to 142,000 square kilometers.

Tajik officials at the time insisted this development had marked a major victory for them as China had as part of a territorial dispute dating back to the Soviet era demanded around 5.5 percent of land that Tajikistan has claimed as its own.

Curiously, though, Tajikistan has shrunken even further since 2011. Poring through State Statistics Agency data, local news outlet Your.tj found that Tajikistan only covered 141,400 square kilometers, implying that another 600 square kilometers of territory – a chunk of land not much smaller than Singapore – had gone missing. It is unclear where this land went, but precedent suggests China might be a strong candidate.

By Eurasianet.org

Eurasianet is an independent news organization that covers news from and about the South Caucasus and Central Asia, providing on-the-ground reporting and critical perspectives