Elon Musk said that there was more investment in global lithium refining to help with battery shortages and promised that those who seize the opportunity will be as lucrative as basically minting money. I would like to encourage entrepreneurs to enter the Liquidity refining business. The mining is relatively easy, the refining is much harder, Musk said on Wednesday that there are software-like margins to be made in lithium processing. You can't lose, it's a license to print money. He said that Tesla s Musk Signals Optimism for the End to Supply Chain Hell Constraints on availability of lithium that have sent prices rising aren't caused by scarcity of raw materials, but because of limited global capacity to deliver ultra-high purity battery-grade hydroxide and carbonate chemicals into battery supply chains. Lithium carbonate prices in China have jumped almost 450% in the past year.
It is a hard thing to scale, because refining is quite hard and requires a huge amount of machinery, according to Musk. China accounts for more than half of the existing lithium refining capacity, though suppliers are adding projects in other hubs. Tianqi Lithium Corp. delivered its first batch from a new Australian operation in May.
Financiers and producers have been wary of big spending on new refineries and mines to add capacity after a previous flood of investment swamped demand and triggered a years-long slump in prices through late 2020. Many materials suppliers were forced to slash output or delay projects, and some operations were shuttered completely.
Australia should add more refining and manufacturing capacity to meet the rising demand for batteries, according to Robyn Denholm, Tesla Chair. Projects are also being added in locations such as Chile, Argentina and the US. Tesla is working on lithium refining activity in Texas and is working on building a cathode facility. If our suppliers don't solve these problems, we will, Musk said.
The company believes that steel and aluminum prices are on a downward trajectory and expects to see the benefits as soon as later this year.