Elon Musk has a dream. Tesla's CEO announced last month his intent to build a massive lithium-ion battery plant -- dubbed the GigaFactory -- in the American southwest. Now, according to company statements, Tesla plans to use only raw materials sourced in North America for its $5 billion factory.
That announcement has touched off a spate of news stories -- to which I've contributed -- variously asking, given Tesla's goal of cranking out 500,000 lithium ion batteries a year by 2020, where will Musk manage to find all that lithium?
And all that cobalt?
And quite likely, titanium and tin as well.
As the building blocks of a single battery, that's a decent chunk of the Periodic Table. And as of 2014, the plain fact is that precious little of the metals and minerals needed at the GigaFactory are being mined here in the U.S.
Today, the U.S. is at least 75 percent dependent on foreign-sourced lithium; 73 percent for tin; 79 percent for titanium, and 76 percent for cobalt. As for manganese and graphite, U.S. production is, respectively, zero and zero.
So if the U.S. is on the import-end for these metals, then who's producing? China is far and away world leader in graphite production, though it's signaled its intent to shrink capacity -- can export quotas be far behind? As for cobalt, more than half the world's supply comes from DRC Congo -- not yet on the conflict metals list, but no one's idea of an ideal supplier. Manganese? That's coming from China and South Africa. Tin? That's China again, followed at a distance by Indonesia. Titanium: South Africa, followed by China, Canada and Australia -- which together produce more than ten times the tonnage of U.S. producers. Three-quarters of all lithium today comes from Chile and Argentina, while Bolivia's anti-American caudillo controls the world's largest known lithium resource.
What about work-arounds -- substitutes for resources not available in the U.S.? Graphite, for instance, can be made synthetically -- via a process using petroleum-coking byproducts -- but it costs up to ten times the price of natural graphite. According to the US Geological Survey, it may be possible to substitute around cobalt in lithium-ion batteries, but the substitute is manganese -- where our current dependency is absolute.
The good news, with a large caveat: The United States is home to known resources for all of the metals Musk needs.
But the caveat may well be Musk's nightmare. Tesla's founder must be aware that while the U.S. boasts world-class metal and mineral resources, it also rates a world-worst for permitting delays, with the average mine taking between 7 and 10 years to move from permitting to production. With 2020 a scant six years off, Tesla's would-be mining suppliers are already behind schedule.
The connection between mining and manufacturing -- a given in the private sector -- is only beginning to dawn on official Washington. Bills have been introduced in the House and Senate, and hearings held. Statements have been made in the White House Rose Garden. Reports have been issued by federal agencies and public policy think tanks. Congress has directed the Pentagon to stockpile strategic metals the U.S. currently does not produce -- while the Environmental Protection Agency asserts the unilateral authority to stop a fully permitted mine already in operation, and anti-mining activists urge the EPA to stop an Alaskan copper mine before it even presents a mine plan. If some parts of the U.S. Government are concerned about American access to strategic metals, Gina McCarthy's EPA appears not to have gotten the memo.
In the manufacturing world, the contradiction is evident everywhere: We want to see the U.S. become a solar power-power -- but when it comes to the next-gen C-I-G-S panels becoming the solar industry standard, the U.S. is 600,000 metric tons a year short on Copper, 100 percent foreign-dependent on Indium and 99 percent dependent for Gallium. As for the "S" in C-I-G-S - Selenium -- 95 percent of it comes from copper production.
And we wonder why fabrication plants locate outside the United States.
The truth is, manufacturing tends to move to where the metals are. If we want to revive manufacturing in the U.S., maybe we need a policy that treats metal and mineral production with some strange new strategic respect?
We know what Elon Musk is ready to do. What will Washington do to make Musk's dream a reality?