WEBVTT - This Is The Challenge Of Securing The Battery Supply Chain 0:00:10.840 --> 0:00:14.720 Hello, and welcome to another episode of the Odd Lots podcast. 0:00:14.760 --> 0:00:19.320 I'm Chill, WI Isn't and I'm Tracy Alloway. Tracy. The 0:00:19.560 --> 0:00:24.800 surging price of oil and other fossil fuels has has 0:00:24.840 --> 0:00:27.760 certainly got a lot of people talking more about the 0:00:27.920 --> 0:00:33.640 energy transition e vs. Electric cars, renewable energy on the grid, 0:00:33.760 --> 0:00:38.080 solar panels, wind, etcetera. But it also seems clear that 0:00:38.440 --> 0:00:41.200 all that is going to be very expensive as well. Yeah, 0:00:41.320 --> 0:00:44.239 this is the ultimate irony. Just as oil prices are 0:00:44.280 --> 0:00:47.159 spiking and everyone's going, oh, we need to, you know, 0:00:47.680 --> 0:00:51.440 quicken the transition away from fossil fuels, it seems like 0:00:51.720 --> 0:00:54.800 all of the commodities that you actually need for that 0:00:54.880 --> 0:00:59.880 transition for decarbonization, those are spiking too. Yeah. Not only 0:01:00.040 --> 0:01:01.880 are we seeing a surgeon price. And if you look 0:01:01.920 --> 0:01:06.319 at all these crucial metals, whether it's nickel or cobalt, 0:01:06.480 --> 0:01:09.800 or the price of lithium, all these crucial ingredients, not 0:01:09.880 --> 0:01:12.600 only are the church mostly up into the right, there 0:01:12.640 --> 0:01:15.319 aren't that many of them. It's not just that they're costly. 0:01:15.480 --> 0:01:18.120 It seems like these markets again kind of like we 0:01:18.360 --> 0:01:21.040 are extremely tight. There's not just a bunch of it 0:01:21.080 --> 0:01:23.920 to be easily procured from what I can tell. Well, 0:01:24.040 --> 0:01:27.120 so this is something that I'm really curious about. What 0:01:27.319 --> 0:01:32.000 exactly is the supply of these essential metals for batteries 0:01:32.040 --> 0:01:36.040 because I'm sure you remember the rare earths, Like I 0:01:36.080 --> 0:01:38.880 don't want to call it a bubble, because clearly there 0:01:38.959 --> 0:01:42.760 was something to it, but rare earth stocks where some 0:01:42.840 --> 0:01:47.240 of those um two Yeah, everyone was like, by rare earths, 0:01:47.240 --> 0:01:49.680 by rare earths, there's only so much of them, and 0:01:49.800 --> 0:01:53.240 it just seemed a little speculative. And so I'm wondering 0:01:53.280 --> 0:01:55.840 how much of that bowl case was true. Is there 0:01:55.880 --> 0:01:58.560 actually a finite amount or is it the case that 0:01:58.680 --> 0:02:01.280 it just takes long to get the mind's up and going, 0:02:01.400 --> 0:02:04.320 it takes a while to increase production. I honestly don't know. 0:02:04.560 --> 0:02:07.040 With words I recall a lot of the story too 0:02:07.120 --> 0:02:10.239 is they're not that rare, but they are, they're very 0:02:10.280 --> 0:02:13.080 pollutant the process of mining, and so which countries actually 0:02:13.080 --> 0:02:15.760 want to do that? And China seemed to be the 0:02:15.800 --> 0:02:18.960 most willing. So the other thing that happened recently in 0:02:19.080 --> 0:02:24.079 battery news specifically is Joe Biden announcing that the Defense 0:02:24.160 --> 0:02:27.080 Authorization Act sort of these tools the government has for 0:02:27.120 --> 0:02:31.000 procurement would go to this space and American metal supply. 0:02:31.320 --> 0:02:34.480 So this is clearly a lot of interest. Who gets 0:02:34.520 --> 0:02:36.480 to build the batteries, how costly it's going to be, 0:02:36.520 --> 0:02:38.639 who has access to the metals, what it's going to 0:02:38.720 --> 0:02:42.960 take to ramp up production, increased urgency. Clearly in this 0:02:43.000 --> 0:02:45.840 moment on these questions absolutely and all brought into focus 0:02:46.000 --> 0:02:50.000 by Russia's invasion of Ukraine and the subsequent sanctions, and 0:02:50.040 --> 0:02:52.280 the fact that Russia holds something like I think it 0:02:52.320 --> 0:02:56.040 was eleven percent of the world's nickel supply. But even that, 0:02:56.120 --> 0:02:58.200 you know, I don't know what type of nickel they 0:02:58.240 --> 0:03:00.399 actually hold. I don't know if it matters what type 0:03:00.400 --> 0:03:02.080 of nickel you have in the market. I have so 0:03:02.120 --> 0:03:05.040 many questions, and yeah, I'm eager to learn. Great, Well, 0:03:05.240 --> 0:03:08.040 let's dive right into this. We're gonna be speaking all 0:03:08.080 --> 0:03:10.960 about batteries and the battery supply chains with James Fifth. 0:03:11.040 --> 0:03:14.079 He has a principal at Volta Energy Technologies, a VC 0:03:14.320 --> 0:03:18.360 firm focused on this area. Previously headed up energy storage 0:03:18.440 --> 0:03:22.520 at Bloomberg and f up until very recently. So James, 0:03:22.560 --> 0:03:24.560 thank you so much for coming out on odd lots. 0:03:25.680 --> 0:03:28.079 Tory Tracy great to be on here and yeah, big 0:03:28.080 --> 0:03:30.200 clime fans, so so thank you very honest to be 0:03:30.240 --> 0:03:32.520 able to speak well we we we uh. We spoke 0:03:32.560 --> 0:03:35.240 with their former colleague Net Bullard earlier in the year 0:03:35.280 --> 0:03:36.840 and when we asked him who should we talk to 0:03:36.880 --> 0:03:39.920 about batteries, he said, you were the man so very 0:03:39.920 --> 0:03:43.440 excited about this. Why don't we start very big picture? 0:03:43.640 --> 0:03:45.920 What is when we talk about the battery market, what 0:03:46.080 --> 0:03:48.880 is the market today? How much is evis, how much 0:03:48.960 --> 0:03:51.160 is grid storage? Like, what are we talking about when 0:03:51.160 --> 0:03:52.920 we sort of take a big, sort of eagle eye 0:03:52.960 --> 0:03:55.200 view at the battery market. Yes, so it's it's a 0:03:55.240 --> 0:03:57.360 great starting space. And I think that's probably what I 0:03:57.440 --> 0:04:00.440 started is if we go back a decade, really the 0:04:00.440 --> 0:04:04.600 battery market was confined to consumer electronics, so your cell phone, 0:04:04.720 --> 0:04:08.560 your laptop, your iPad, that's what Littiman batteries went into. 0:04:08.920 --> 0:04:12.400 And at the time kind of passenger vs were almost nothing. 0:04:13.280 --> 0:04:14.880 But by the time we got to the end of 0:04:15.000 --> 0:04:19.200 the last decades kind of twenty, what we found is 0:04:19.279 --> 0:04:23.600 that the kind of biggest demand sector for litty Mind 0:04:23.640 --> 0:04:26.040 batteries had flipped and it was no longer that consumer 0:04:26.040 --> 0:04:31.839 electronics sector. It was instead passenger electric vehicles, And just 0:04:31.920 --> 0:04:33.520 to kind of, you know, try and put it in 0:04:33.560 --> 0:04:37.159 a bit of context. Back in kind of twenty nineteen, 0:04:37.560 --> 0:04:39.440 at the end of the year, there was almost two 0:04:39.520 --> 0:04:43.480 hundred giga one hours of battery demand. Now there's lots 0:04:43.480 --> 0:04:45.600 of jargon in the battery industry, so let me kind 0:04:45.600 --> 0:04:49.320 of try and break that down a little bit more So, essentially, 0:04:49.360 --> 0:04:51.520 if you look at a passenger EV if you look 0:04:51.560 --> 0:04:54.840 at your Tesla model as for example, you might find 0:04:54.880 --> 0:04:57.039 that you have a hundred kill or what our pack 0:04:57.839 --> 0:05:01.680 Now there's a lillian kill what hours in a gig 0:05:01.680 --> 0:05:05.160 of one hour, and so if you have a hundred 0:05:05.640 --> 0:05:08.719 kill what hours kind of per vehicle, what you find 0:05:09.000 --> 0:05:12.919 is that you're looking at around um what does that 0:05:13.040 --> 0:05:16.159 end up being kind of ten thousand vs per gig 0:05:16.240 --> 0:05:18.960 or what hour. So when we had two hundred giga 0:05:19.000 --> 0:05:23.480 one hours UM on the market, that's you know, enough 0:05:23.640 --> 0:05:26.480 for around two hundred thousand evs. But of course, as 0:05:26.520 --> 0:05:28.960 I say, I wasn't just going into kind of Tesla's etcetera. 0:05:28.960 --> 0:05:31.480 It was going into consumer electronics. But also, as you 0:05:31.560 --> 0:05:34.080 pointed out, you know, staciary storage, but stacialy storage is 0:05:34.240 --> 0:05:36.920 again kind of a much smaller chunk compared to the 0:05:37.440 --> 0:05:40.440 the EV market, But just because it's smaller doesn't mean 0:05:40.480 --> 0:05:42.600 it's not important when we're kind of looking at that 0:05:43.080 --> 0:05:46.920 energy transition kind of sector. Can I ask a really 0:05:46.960 --> 0:05:51.039 basic and embarrassing question, but you know, when we say 0:05:51.200 --> 0:05:55.760 lithium ion batteries, how exactly are these medals used in 0:05:55.920 --> 0:05:59.159 batteries And is it the case that you're always going 0:05:59.200 --> 0:06:01.360 to need a certain amount of them or are their 0:06:01.360 --> 0:06:06.200 efforts underway to make them more efficient and use fewer 0:06:06.360 --> 0:06:10.240 or less metals in them. So again, another kind of 0:06:10.279 --> 0:06:14.599 great question, um, and it's it's there's a fairly nuanced answer, 0:06:14.640 --> 0:06:16.719 but I'll again try and kind of you know, break 0:06:16.760 --> 0:06:19.160 it down to the basics. So if you look at 0:06:19.200 --> 0:06:21.480 what's happened kind of over that period of time from 0:06:21.520 --> 0:06:26.200 two thousand and ten to twenty, the kind of average 0:06:26.279 --> 0:06:31.400 kilograms required per battery has decreased because there have been 0:06:31.440 --> 0:06:34.760 improvements in in you know, primarily the kind of cathode 0:06:34.800 --> 0:06:37.960 which is one of the active components. But again, you 0:06:38.000 --> 0:06:41.880 know within the battery space there are different chemistry, so 0:06:42.279 --> 0:06:45.839 different cathodes that use different metals. The kind of key 0:06:45.839 --> 0:06:48.480 ones that have been used over the last decade is lithium, 0:06:48.480 --> 0:06:50.799 and you find lithium in everything, So you have lithium 0:06:50.800 --> 0:06:54.920 mixed with either nickel, manganese and cobalt, or you can 0:06:54.960 --> 0:06:59.160 have um lithium mixed with with iron and phosphate. So 0:06:59.200 --> 0:07:02.440 you have these kind of predominantly kind of leading and 0:07:02.520 --> 0:07:06.920 competing chemistries, and each has its advantage and disadvantage. If 0:07:06.920 --> 0:07:09.440 you have the lithium mind and phosphate, which is called LFP, 0:07:10.200 --> 0:07:13.120 those batteries are a relatively low cost because you only 0:07:13.160 --> 0:07:15.720 have kind of lithium in it. That is expensive, but 0:07:15.960 --> 0:07:19.280 you have a lower kind of energy density, and what 0:07:19.320 --> 0:07:22.200 that means is in a given kind of volume or 0:07:22.200 --> 0:07:24.040 for a given weight, you can't get as many kind 0:07:24.080 --> 0:07:27.440 of kill what hours, So that limits the range of 0:07:27.480 --> 0:07:31.320 an electric vehicle essentially. Whereas the nickel, manganese and cobalt 0:07:31.360 --> 0:07:36.360 batteries otherwise known as NMC, they have a higher energy density, 0:07:36.480 --> 0:07:38.680 so you can go further in your e V, but 0:07:38.760 --> 0:07:41.480 it comes with the downside of higher costs because you've 0:07:41.480 --> 0:07:43.320 got nickel in there, you've got cobalt in there, and 0:07:43.320 --> 0:07:45.400 you've got littium in there. So you're always kind of 0:07:45.440 --> 0:07:48.760 playing this this game to try and balance the kind 0:07:48.760 --> 0:07:52.440 of performance versus cost of any of these lifting mind batteries. 0:07:53.480 --> 0:07:56.920 So when we think about the e V market, what 0:07:57.160 --> 0:08:01.720 is the current state of the art technology and is 0:08:01.760 --> 0:08:06.440 the roadmap for does it seem fairly clear words going 0:08:06.600 --> 0:08:08.680 in terms of say, what kind of tech will go 0:08:08.720 --> 0:08:11.760 into batteries ten years from now or is there still 0:08:11.920 --> 0:08:15.560 is it still open in terms of there being debate 0:08:15.680 --> 0:08:18.720 about what path the industry will ultimately take. Yeah, a 0:08:18.760 --> 0:08:21.440 great question and one that I could probably talk about, 0:08:21.480 --> 0:08:23.480 you know, four and out that I'll get. I'll try 0:08:23.520 --> 0:08:25.880 and supervid just frame the debate for us a frame 0:08:25.920 --> 0:08:28.800 of the discussion. So you know, I mentioned we have 0:08:28.880 --> 0:08:31.600 this kind of n MC or this LFP chemistry, and 0:08:31.680 --> 0:08:34.840 over the last decade, you know what's happened was the 0:08:34.920 --> 0:08:38.000 use of LFP was really confined to China, and outside 0:08:38.000 --> 0:08:41.719 of China, in Europe and in the US, companies were 0:08:41.760 --> 0:08:45.880 focusing on nickel based chemistry, so like the NMC and 0:08:45.920 --> 0:08:47.880 the states of the art had kind of more and 0:08:47.920 --> 0:08:50.760 more nickel being added. So that increased the energy density, 0:08:50.920 --> 0:08:54.240 which is why you know EV ranges have kept on increasing. 0:08:54.640 --> 0:08:58.040 And it seemed like that you know, those nickel heavy chemistries, 0:08:58.520 --> 0:09:00.839 we're going to be the kind of dominant technology over 0:09:00.880 --> 0:09:05.840 the next decade. But actually what's happened is Chinese companies 0:09:05.840 --> 0:09:09.720 in particular have come up with an innovative way to 0:09:09.720 --> 0:09:12.599 to in reality kind of squeeze more juice out of 0:09:12.640 --> 0:09:17.120 the batteries using LFP. So now these low cost kind 0:09:17.120 --> 0:09:20.440 of lithium and phosphate batteries can give you ranges that 0:09:20.520 --> 0:09:23.480 are not as high as a nickel based battery, but 0:09:23.800 --> 0:09:26.600 you know, in most cases suitable. And that's why we 0:09:26.640 --> 0:09:29.560 see companies like Tesla and VW saying that they'll use 0:09:29.600 --> 0:09:32.160 these these LFP batteries and their kind of low cost 0:09:32.600 --> 0:09:35.400 entry level evs. So that's the kind of big trend 0:09:35.440 --> 0:09:37.280 that we see now is actually this this l FP 0:09:37.480 --> 0:09:40.320 is coming back onto the market. While it's not kind 0:09:40.360 --> 0:09:42.720 of technically as stated the art as some of these 0:09:42.800 --> 0:09:46.600 high nickel chemistries, actually engineers have done a fantastic job 0:09:46.640 --> 0:09:51.160 at making it, you know, enough for what most consumers 0:09:51.240 --> 0:09:54.400 need and then just to kind of finish if we go, 0:09:54.679 --> 0:09:57.319 you know, in ten years time, I think what everyone's 0:09:57.320 --> 0:10:00.840 really hoping for and looking forward to, it's sort state batteries. 0:10:01.280 --> 0:10:03.319 You know, you've probably heard people saying the Holy Grail, 0:10:03.400 --> 0:10:06.559 and that's probably taking it a little bit far, but certainly, 0:10:06.800 --> 0:10:10.160 you know, they promised to kind of make Evis faster 0:10:10.280 --> 0:10:12.679 pass um, you know, the performance that you get today, 0:10:12.679 --> 0:10:14.760 and make that kind of idea of a four D 0:10:14.920 --> 0:10:19.040 five hundred mile range kind of realistic. So how much 0:10:19.120 --> 0:10:22.800 does the recent volatility in metals prices, the surges that 0:10:22.880 --> 0:10:26.640 Joe and I were describing in the intro supply constraints, 0:10:26.679 --> 0:10:30.400 given Russia's invasion of Ukraine and the subsequent sanctions, how 0:10:30.480 --> 0:10:33.560 much does all of that throw a spanner in the 0:10:33.600 --> 0:10:37.840 works of the sort of long term trajectory of battery 0:10:37.920 --> 0:10:42.440 development and technology that you just described. Yeah, it's it's 0:10:42.520 --> 0:10:45.640 kind of clearly been a pretty difficult time in the 0:10:45.640 --> 0:10:47.840 battery industry. I mean, coming off the back of the 0:10:47.920 --> 0:10:51.240 kind of pandemic and the logistics problems that have come 0:10:51.280 --> 0:10:53.320 from that. You know, we're then thrown into this terrible 0:10:53.320 --> 0:10:56.160 war between Ukraine and Russia, which then creates kind of 0:10:56.200 --> 0:10:59.440 more turmoil in the commodities market. And you know, as 0:10:59.480 --> 0:11:04.000 you said, getting Tracy around kind of ten percent of 0:11:04.120 --> 0:11:07.120 the world's nickel is kind of mind in Russia. But actually, 0:11:07.200 --> 0:11:09.400 as as you kind of rightly pointed out, not all 0:11:09.440 --> 0:11:12.880 of that can be used in kind of electric vehicles 0:11:12.920 --> 0:11:17.000 and littemon batteries. Nickels divided into kind of two classes, 0:11:17.000 --> 0:11:19.000 so you have class one and class to Class one 0:11:19.080 --> 0:11:22.880 is typically the higher purity material, whereas Class two can 0:11:22.880 --> 0:11:26.000 be contaminated with with iron in particular, So it's a 0:11:26.120 --> 0:11:29.760 class one material that you need in litemon batteries, and 0:11:29.840 --> 0:11:33.439 Russia actually produces around sev of the world's kind of 0:11:33.480 --> 0:11:37.680 supply of this class one material. So the sanctions imposed 0:11:37.679 --> 0:11:42.960 on Russia, you know, do create problems for the battery 0:11:43.000 --> 0:11:46.400 industry going forward. And these are as, i say, kind 0:11:46.400 --> 0:11:49.200 of exacerbating problems that have actually been there in the past. 0:11:49.280 --> 0:11:51.960 I think it was two years ago so that Elon 0:11:52.040 --> 0:11:55.440 Musk pleaded for for for nickel miners to invest in 0:11:55.440 --> 0:11:59.320 more capacity and start producing more nickel, and that hasn't 0:11:59.400 --> 0:12:02.200 really had And there's some more capacity that's been in 0:12:02.240 --> 0:12:05.440 the works coming online in Indonesia for a couple of years, 0:12:05.480 --> 0:12:08.640 but not to the extent that most kind of automated 0:12:08.720 --> 0:12:11.800 is expect will be be needed. So there are kind 0:12:11.800 --> 0:12:14.880 of supply chain constraints coming up there. And not to mention, 0:12:15.440 --> 0:12:18.720 you know, on top of that, the volatility and pricing 0:12:19.520 --> 0:12:21.720 doesn't help. And you know, I should I should point 0:12:21.720 --> 0:12:24.680 out that actually a lot of automakers and sell manufacturers 0:12:24.960 --> 0:12:27.920 what they've done is they've they've locked in long, longer 0:12:28.000 --> 0:12:31.800 term supply. So we heard of again Tesla locking in 0:12:31.840 --> 0:12:34.920 this kind of longer term deal with with Valet, the 0:12:35.040 --> 0:12:38.840 Brazilian nickel minor. And when you have these longer term contracts, 0:12:39.040 --> 0:12:41.360 you're not as exposed to the kind of volatility in 0:12:41.360 --> 0:12:44.960 the spot price market. But when it comes to renegotiating 0:12:45.000 --> 0:12:48.800 those contracts, you know, when whenever whenever, that is, if 0:12:48.840 --> 0:12:51.040 prices are high, the price that you'll end up paying 0:12:51.080 --> 0:12:53.000 for that kind of new contract is going to be higher. 0:12:53.040 --> 0:12:56.560 So the uncertainty, you know, doesn't help the industry at all. 0:12:57.040 --> 0:12:58.880 And at the end of the day, it's it's really 0:12:59.080 --> 0:13:01.480 consumers that end up kind of feeding the bike because 0:13:01.480 --> 0:13:04.640 most of those prices have passed through to automatacy then 0:13:04.679 --> 0:13:08.080 process that through to the consumer. So you know, the 0:13:08.160 --> 0:13:11.240 other problem for consumers as far as I can tell, 0:13:11.280 --> 0:13:12.480 and I may be wrong, but as far as I 0:13:12.520 --> 0:13:15.199 can tell, yes, there is the cost, but there's also 0:13:15.280 --> 0:13:18.400 just like it seems like at least speaking from the 0:13:18.480 --> 0:13:23.120 US perspective, that we're basically maxed out. Consumers are willing 0:13:23.160 --> 0:13:25.559 to buy not just all of the evs that exist 0:13:25.600 --> 0:13:27.240 on the market, but more. And so you have these 0:13:27.240 --> 0:13:31.280 waiting lists from the legacy automakers that you know, in 0:13:31.320 --> 0:13:33.480 some cases are over a year people waiting to say, 0:13:33.520 --> 0:13:35.960 like buy a new electric truck or something like that. 0:13:36.440 --> 0:13:39.520 So we have this it seems like the demand is massive. 0:13:39.559 --> 0:13:41.800 And then you look at these charts of e V 0:13:42.520 --> 0:13:45.240 market penetration expecting the future, and they're all like the 0:13:45.280 --> 0:13:48.319 classic up into the right. And so I guess the 0:13:48.400 --> 0:13:52.280 question is, like, how much of a constraint is battery 0:13:52.320 --> 0:13:57.360 supply to essentially the trajectory of e vs the people 0:13:57.720 --> 0:14:00.680 forecast if it were just from a demand perspective, because 0:14:00.720 --> 0:14:03.240 it looks like demand is now the problem. Well, the 0:14:03.320 --> 0:14:07.760 supply of new of nickel and other metals allow for 0:14:07.800 --> 0:14:12.440 that sort of like hockey stick like growth in EV penetration. Yeah, again, 0:14:12.480 --> 0:14:15.440 this is this is a million dollar question, um, And 0:14:15.480 --> 0:14:20.680 I think, yeah, certainly battery supply is consideration, you know, 0:14:20.720 --> 0:14:23.960 I think we'll certainly see that kind of hockey stick 0:14:24.000 --> 0:14:26.800 like growth up into the right in electric vehicles. I 0:14:26.840 --> 0:14:30.479 think the question is, you know, how steep is that transient? 0:14:30.840 --> 0:14:32.960 As you say, there's a number of kind of potential 0:14:33.000 --> 0:14:37.160 bottomnecks within the supply chain that could limit that growth. Um, 0:14:37.640 --> 0:14:39.320 you know, if we go to the raw material side 0:14:39.320 --> 0:14:43.080 of things, it's literally is there enough lithium or nickel 0:14:43.160 --> 0:14:45.160 that can be dug out of the ground to meet 0:14:45.200 --> 0:14:49.920 that demand? And based on current trajectories, you know, well 0:14:50.120 --> 0:14:52.560 will will be okay for the next kind of two 0:14:52.640 --> 0:14:55.800 or three years. There's going to be potential shortages you 0:14:55.840 --> 0:14:59.280 know in lithium and nickel and cobalt. Then after that 0:14:59.320 --> 0:15:02.040 it really depends on whether the new minds that are 0:15:02.080 --> 0:15:05.040 slated to come online do manage to come online or 0:15:05.080 --> 0:15:07.040 you know, if there are delays. One of the key 0:15:07.800 --> 0:15:10.280 that we should be watching one of the problems as 0:15:10.280 --> 0:15:14.480 I said, so so so within Indonesia, there's there's a 0:15:14.520 --> 0:15:17.320 lot of new projects which are using a technology called 0:15:18.240 --> 0:15:21.400 h PAL so high pressure acid leaching. Now this is 0:15:21.440 --> 0:15:25.720 a promising technology, but there's only one operating mind in 0:15:25.760 --> 0:15:27.560 the world that uses it today. So there's a lot 0:15:27.680 --> 0:15:31.440 riding on a technology that is to some extent not 0:15:31.600 --> 0:15:34.640 that widespread. And if those minds don't come on online, 0:15:34.680 --> 0:15:37.320 then then we start to kind of run into issues. 0:15:37.960 --> 0:15:40.160 Then on the lithium side of things, you know, there's 0:15:40.200 --> 0:15:43.160 there's there's a huge number of kind of minds that 0:15:43.200 --> 0:15:45.880 are looking to open. We have kind of new minds 0:15:45.920 --> 0:15:51.040 opening in Australia, we have new refining refineries opening in Australia. 0:15:51.080 --> 0:15:53.720 There's a Chinese company that's just helped open a new 0:15:53.760 --> 0:15:56.240 lithium refinery. So we've we've got a lot of kind 0:15:56.240 --> 0:15:59.680 of potential projects coming online. And then within the US 0:15:59.800 --> 0:16:02.080 we look at something kind of new lithium projects that 0:16:02.080 --> 0:16:05.160 are that are being stated there. There are companies like 0:16:05.160 --> 0:16:09.200 Standy Lithium and others that are looking at geothermal projects. Similarly, 0:16:09.280 --> 0:16:12.040 in Europe we have Fulcan Lithium which is also looking 0:16:12.080 --> 0:16:14.400 at a geo thermal project. So there's a lot of 0:16:14.560 --> 0:16:17.200 activity in the sector. It's just a question of can 0:16:17.200 --> 0:16:20.040 you push those through to the end and actually execute 0:16:20.120 --> 0:16:24.040 on them, and that's that's harder to do. So, just 0:16:24.080 --> 0:16:26.720 on that note, can can you go back to what 0:16:26.880 --> 0:16:30.280 Joe and I were kind of hinting at earlier? Are 0:16:30.360 --> 0:16:34.720 there enough of these medals in the ground to satisfy demand? 0:16:35.400 --> 0:16:37.120 And is it the case that it just takes a 0:16:37.120 --> 0:16:41.200 while to build the minds, develop new technology to actually 0:16:41.400 --> 0:16:45.720 extract them. So so there's slightly enough in the ground. 0:16:46.320 --> 0:16:47.960 It is as you say, though, it just takes a 0:16:47.960 --> 0:16:50.040 while to develop these projects. If you look at a 0:16:50.080 --> 0:16:52.880 typical kind of mind development time, you could be looking 0:16:52.880 --> 0:16:56.560 at kind of seven to ten years, and that becomes 0:16:56.560 --> 0:16:59.200 an issue if that hockey stick growth takes off faster 0:16:59.240 --> 0:17:02.360 than expected. If of setting more uvs this year, that's 0:17:02.360 --> 0:17:04.760 hard because you can't just get a new mind operating 0:17:04.800 --> 0:17:07.399 this year. Similarly, you can't get a new cell manufacturing 0:17:07.400 --> 0:17:10.199 plant operating overnight. So that that that's where the issues 0:17:10.560 --> 0:17:13.879 come as if demand is there faster than than supply 0:17:14.000 --> 0:17:15.879 can keep up, you know, which is always going to be, 0:17:16.000 --> 0:17:18.520 you know, an issue in any kind of growing market, 0:17:18.600 --> 0:17:22.119 how does that supply demand balance work. But until the 0:17:22.200 --> 0:17:25.320 last year or so, it seemed like supply was going 0:17:25.359 --> 0:17:27.280 to be ahead of demand, and suddenly that's flipped and 0:17:27.600 --> 0:17:31.160 we've seen this kind of great up taking in electric vehicles. 0:17:32.000 --> 0:17:35.080 So we know that governments around the world are thinking 0:17:35.160 --> 0:17:37.680 about this and concerned, and of course we saw we 0:17:37.800 --> 0:17:41.280 got the news from the White House recently about wanting 0:17:41.320 --> 0:17:46.080 to accelerate domestic sourcing of key medals. What steps are 0:17:46.080 --> 0:17:49.800 being taken around the world to make it such that 0:17:49.960 --> 0:17:53.879 some of these new projects maybe move faster or approved 0:17:53.920 --> 0:17:57.800 faster or developed faster, and what are the what policies 0:17:57.960 --> 0:18:00.480 should be. We'll be watching to see whether or whether 0:18:00.520 --> 0:18:03.600 they prove effective. Again, this is a This is a 0:18:03.600 --> 0:18:07.040 difficult one because I think there's lots of discussions around 0:18:07.040 --> 0:18:09.320 the world of needing to open new minds, and you know, 0:18:09.400 --> 0:18:11.960 the signing of the Defense or the invoking of the 0:18:12.000 --> 0:18:15.920 Defense Production Act in the US is a great indicator 0:18:16.040 --> 0:18:19.000 that the US government is backing the battery supply chain 0:18:19.040 --> 0:18:21.960 and wants these minerals to be there. But in most 0:18:22.000 --> 0:18:25.919 of the kind of western world, the problem isn't government 0:18:25.960 --> 0:18:29.520 support so much, it's the permitting and the processing. You know, 0:18:29.560 --> 0:18:33.760 there's still amount of opposition to digging minerals out of 0:18:33.800 --> 0:18:37.000 the ground in Europe or the US. One of the 0:18:37.080 --> 0:18:40.639 kind of recent European lithium projects that was slay to 0:18:40.640 --> 0:18:44.200 start operation a year or two ago in Portugal ran 0:18:44.320 --> 0:18:48.159 up against environmental kind of lobbyists and and has been 0:18:48.200 --> 0:18:51.440 delayed a couple of times since then. So we've got 0:18:51.440 --> 0:18:55.199 this kind of split environmental group where lifting batteries are 0:18:55.240 --> 0:18:57.639 good for the environment because you get evs on the 0:18:57.720 --> 0:19:01.200 road and polluting cars off the road. But there's still 0:19:01.200 --> 0:19:06.720 this concern around local impacts on the environment and and 0:19:06.720 --> 0:19:09.520 and kind of habitats. That's the real issue, and it's 0:19:09.560 --> 0:19:11.479 it's hard for a lot of Western governments to kind 0:19:11.480 --> 0:19:15.440 of balance that. So although we see money and and 0:19:15.440 --> 0:19:19.320 and kind of government sentiments supporting these projects, it's slightly 0:19:19.359 --> 0:19:21.480 harder under ground to actually kind of carry them forward. 0:19:22.119 --> 0:19:25.000 There are some countries that are better than others. So Canada, 0:19:25.040 --> 0:19:27.960 for example, is expected to announce around one point six 0:19:28.000 --> 0:19:32.240 billion US dollars to support mining of kind of critical 0:19:32.280 --> 0:19:36.760 battery materials in its upcoming budget. And in Canada the 0:19:36.840 --> 0:19:41.640 kind of legislation is much more friendly to minors, so 0:19:41.880 --> 0:19:45.359 there we can see projects coming online faster. You know. Similarly, 0:19:45.359 --> 0:19:47.960 in countries like Indonesia, as they say, where you have 0:19:47.960 --> 0:19:51.000 these nickel projects being developed, it can be easier to 0:19:51.440 --> 0:19:53.359 get these minds up and running from a kind of 0:19:53.400 --> 0:19:57.320 permitting perspective. So it's really, i think, i'd say, in 0:19:57.080 --> 0:20:00.600 in in the US and in Europe, it's watching see 0:20:01.119 --> 0:20:04.080 what else kind of what legislation follows things like the 0:20:04.240 --> 0:20:06.520 Defense Production Act. You know, how how does the government 0:20:06.520 --> 0:20:11.080 then move to support these minds in a more material way? 0:20:11.119 --> 0:20:13.199 If you like I was about to ask, what does 0:20:13.240 --> 0:20:16.159 it actually mean if a government says they're going to 0:20:16.240 --> 0:20:21.320 spend X billion dollars to boost domestic mining capacity, Like, 0:20:21.400 --> 0:20:24.840 how does that money actually flow? And is it the 0:20:24.840 --> 0:20:29.119 case that maybe, I don't know, maybe designating land for 0:20:29.119 --> 0:20:32.040 for this activity would be more useful in terms of 0:20:32.080 --> 0:20:35.720 boosting production. How does it actually work? It's it varies 0:20:35.760 --> 0:20:38.880 a lot by location, so we're still waiting to get 0:20:38.880 --> 0:20:41.399 the kind of final details. Canada's one point six billion, 0:20:41.440 --> 0:20:44.440 for example, But you know there that that that money 0:20:44.520 --> 0:20:48.200 might go to help carry up feasibility studies. It could 0:20:48.440 --> 0:20:50.639 be offered in the way of loans to kind of 0:20:50.760 --> 0:20:54.719 buy equipment or to kind of start operating projects. In 0:20:54.800 --> 0:20:58.080 the US, the Defense Production Act makes will make around 0:20:58.080 --> 0:21:03.320 seven hundred and fifty million in funds available which companies 0:21:03.359 --> 0:21:05.960 can use for these kind of feasibility studies, so assessing 0:21:06.720 --> 0:21:10.520 where they could build new minds or for upgrading equipment 0:21:10.520 --> 0:21:13.640 and infrastructure so they can get higher yields have become 0:21:13.680 --> 0:21:16.480 more environmentally friendly in the process. So there's lots of 0:21:16.520 --> 0:21:19.720 different ways that it can be spent. We don't kind 0:21:19.720 --> 0:21:23.159 of soft and see land being directly kind of designated 0:21:23.240 --> 0:21:25.920 four minds. But again that's that's an knocking that could 0:21:25.920 --> 0:21:44.000 be on the table. I want to switch a little 0:21:44.000 --> 0:21:48.200 bit to the state of grid storage. And you know, obviously, 0:21:48.280 --> 0:21:52.480 as we've seen, particularly in Europe, the electricity prices have 0:21:52.560 --> 0:21:55.560 gone absolutely nuts, and there's a lot of interest in 0:21:55.560 --> 0:21:59.920 increasing renewables, particularly wind and solar, but of course it's 0:22:00.040 --> 0:22:02.199 seems like for them to really work and to have 0:22:02.280 --> 0:22:05.280 like a zero emissions grid, you would need a lot 0:22:05.320 --> 0:22:08.639 of backup battery power to back up those powers. So 0:22:08.720 --> 0:22:12.800 where how big is that market right now? Just grid 0:22:12.880 --> 0:22:17.040 level batteries. Yes, the good market, as I mentioned, is 0:22:17.600 --> 0:22:21.520 smaller in terms of demand for batteries than the passenger 0:22:21.560 --> 0:22:24.200 electric vehicle market. But as you say, it's it's key 0:22:24.280 --> 0:22:27.159