Mining
Here at Advanced Proenergy we feel it is important to distinguish between: 'rare-', 'precious-', and 'critical-' earth elements. These terms are not interchangeable, even though they often are in popular media.
Electric vehicles powered by Advanced Proenergy need to use two precious metals, gold and silver, and they are used in minute quantities in the circuit boards which run the electronics. What one needs to consider is that these valuable metals are also fully recyclable.
Critical earth elements found in Advanced Proenergy EV batteries are: lithium and cobalt, both fully recyclable. Both Lithium and cobalt metals can be reused over and over repeatedly.
These two elements are not particularly rare - cobalt can be found in most rocks, and lithium is the first metal in the periodic table and one of only three elements created in the primordial Big Bang. Lithium is the 32nd most common element on our planet. But both metals are critical because of modern societies' dependence on lithium-ion battery technology for mobile phones, laptops, and now EVs. Cobalt is a byproduct of nickel and copper mines, and is therefore dependent on the economic viability of those mining operations.
Worldwide sources of lithium are broken down by ore-deposit type as follows: closed-basin brines, 58%; pegmatite and related granites, 26%; lithium-enriched clays, 7%; oilfield brines, 3%; geothermal brines, 3%; and lithium-enriched zeolites, 3% (2013 statistics USGS). Of those, closed basin brines are the most important source of lithium reserves.
The growing adoption of EVs and the need for EV batteries with higher energy densities experts agree will see the demand for lithium increase more than threefold between 2021 and 2025, to 669 kilotons lithium carbonate equivalent (LCE), the industry standard for measuring lithium volumes, from 214 kilotons LCE. Cobalt will increase by 60 percent over the same period, rising to 222 kilotons refined metal equivalent from 136 kilotons refined metal equivalent.
Recent price spikes for lithium and cobalt have raised concerns for our shareholders regarding the long-term supply availability of these commodities and highlighted the very different supply-side dynamics for both.
Advanced Proenergy is already on its way to develop sourcing strategies to ensure a stable supply of lithium and cobalt to insulate them us of the risk of shortages and potential price spikes.
Like mining companies, Advanced Proenergy developed a long term plan that aims beyond substitution, it targets partnering with mining, melting, and refining companies and making the right resource acquisitions to provide security of supply as well as transparency and traceability of the material along the value chain from the mine to the battery installed in the car.
As such, any acquisition and partnership information regarding related mining operations will be made available to our shareholders via press announcements, when and where they will occur.