Tesla cars are seen parked at the construction site of the new Tesla Gigafactory for electric cars in Gruenheide, Germany, March 20, 2022. REUTERS/Hannibal Hanschke/
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JAKARTA, Aug 8 (Reuters) – U.S. carmaker Tesla (TSLA.O) has signed contracts worth about $5 billion to buy materials for their batteries from nickel processing companies in Indonesia, a senior cabinet minister told CNBC Indonesia.
Southeast Asia’s biggest economy has been trying to get Tesla to set up a production facility in the country, which has major nickel reserves. President Joko Widodo met with Tesla founder Elon Musk earlier this year to drum up investment. read more
“We are still in constant negotiation with Tesla … but they have started buying two excellent products from Indonesia,” Coordinating Minister for Maritime and Investment Affairs Luhut Pandjaitan said in an interview broadcast on Monday.
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He said Tesla signed a five-year contract with nickel processing companies operating out of Morowali in Sulawesi island. The nickel materials will be used in Tesla’s lithium batteries.
Tesla did not immediately respond to a Reuters email seeking comment.
Indonesia is keen to develop electric vehicles and batteries industries at home and had stopped exports of nickel ore to ensure supply for investors. The move had successfully attracted investments from Chinese steel giants and South Korean companies like LG and Hyundai.
However, most nickel investment so far have gone to production of crude metal such as nickel pig iron and ferronickel.
The government plans to impose export tax on these metals to boost revenue while encouraging more domestic production of higher-value products, a senior official told Reuters last week.
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Reporting by Fransiska Nangoy; Editing by Kanupriya Kapoor
Our Standards: The Thomson Reuters Trust Principles.
An illustration shows a type of quantum matter called charge density waves, or CDWs, superimposed on the atomic structure of a nickel oxide superconductor. (Bottom) The nickel oxide material, with nickel atoms in orange and oxygen atoms in red. (Top left) CDWs appear as a pattern of frozen electron ripples, with a higher density of electrons in the peaks of the ripples and a lower density of electrons in the troughs. (Top right) This area depicts another quantum state, superconductivity, which can also emerge in the nickel oxide. The presence of CDWs shows that nickel oxides are capable of forming correlated states—”electron soups” that can host a variety of quantum phases, including superconductivity. Credit: Greg Stewart/SLAC National Accelerator Laboratory
A new study shows that nickel oxide superconductors, which conduct electricity with no loss at higher temperatures than conventional superconductors do, contain a type of quantum matter called charge density waves, or CDWs, that can accompany superconductivity.
The presence of CDWs shows that these recently discovered materials, also known as nickelates, are capable of forming correlated states—”electron soups” that can host a variety of quantum phases, including superconductivity, researchers from the Department of Energy’s SLAC National Accelerator Laboratory and Stanford University reported in Nature Physics today.
“Unlike in any other superconductor we know about, CDWs appear even before we dope the material by replacing some atoms with others to change the number of electrons that are free to move around,” said Wei-Sheng Lee, a SLAC lead scientist and investigator with the Stanford Institute for Materials and Energy Science (SIMES) who led the study.
“This makes the nickelates a very interesting new system—a new playground for studying unconventional superconductors.”
Nickelates and cuprates
In the 35 years since the first unconventional “high-temperature” superconductors were discovered, researchers have been racing to find one that could carry electricity with no loss at close to room temperature. This would be a revolutionary development, allowing things like perfectly efficient power lines, maglev trains and a host of other futuristic, energy-saving technologies.
But while a vigorous global research effort has pinned down many aspects of their nature and behavior, people still don’t know exactly how these materials become superconducting.
So the discovery of nickelate’s superconducting powers by SIMES investigators three years ago was exciting because it gave scientists a fresh perspective on the problem.
Since then, SIMES researchers have explored the nickelates’ electronic structure—basically the way their electrons behave—and magnetic behavior. These studies turned up important similarities and subtle differences between nickelates and the copper oxides or cuprates—the first high-temperature superconductors ever discovered and still the world record holders for high-temperature operation at everyday pressures.
Since nickel and copper sit right next to each other on the periodic table of the elements, scientists were not surprised to see a kinship there, and in fact had suspected that nickelates might make good superconductors. But it turned out to be extraordinarily difficult to construct materials with just the right characteristics.
“This is still very new,” Lee said. “People are still struggling to synthesize thin films of these materials and understand how different conditions can affect the underlying microscopic mechanisms related to superconductivity.”
This graph shows what happens inside a nickel oxide material when scientists tweak its temperature and level of doping—replacing some atoms with others to change the number of electrons that can move around. When conditions are just right, the material’s electrons lose their individual identities and form an electron soup, and quantum states such as superconductivity (blue) and charge density waves (CDWs, in red) emerge. Credit: Adapted from M. Rossi et al
Frozen electron ripples
CDWs are just one of the weird states of matter that jostle for prominence in superconducting materials. You can think of them as a pattern of frozen electron ripples superimposed on the material’s atomic structure, with a higher density of electrons in the peaks of the ripples and a lower density of electrons in the troughs.
As researchers adjust the material’s temperature and level of doping, various states emerge and fade away. When conditions are just right, the material’s electrons lose their individual identities and form an electron soup, and quantum states such as superconductivity and CDWs can emerge.
An earlier study by the SIMES group did not find CDWs in nickelates that contain the rare-earth element neodymium. But in this latest study, the SIMES team created and examined a different nickelate material where neodymium was replaced with another rare-earth element, lanthanum.
“The emergence of CDWs can be very sensitive to things like strain or disorder in their surroundings, which can be tuned by using different rare-earth elements,” explained Matteo Rossi, who led the experiments while a postdoctoral researcher at SLAC.
The team carried out experiments at three X-ray light sources—the Diamond Light Source in the UK, the Stanford Synchrotron Radiation Lightsource at SLAC and the Advanced Light Source at DOE’s Lawrence Berkeley National Laboratory. Each of these facilities offered specialized tools for probing and understanding the material at a fundamental level. All the experiments had to be carried out remotely because of pandemic restrictions.
‘Essentially self-doping’
The experiments showed that this nickelate could host both CDWs and superconducting states of matter—and that these states were present even before the material was doped. This was surprising, because doping is usually an essential part of getting materials to superconduct.
Lee said the fact that this nickelate is essentially self-doping makes it significantly different from the cuprates.
“This makes nickelates a very interesting new system for studying how these quantum phases compete or intertwine with each other,” he said. “And it means a lot of tools that are used to study other unconventional superconductors may be relevant to this one, too.”
First study of nickelate’s magnetism finds a strong kinship with cuprate superconductors
More information:
Wei-Sheng Lee, A broken translational symmetry state in an infinite-layer nickelate, Nature Physics (2022). DOI: 10.1038/s41567-022-01660-6. www.nature.com/articles/s41567-022-01660-6
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The play by Xiang Guangda, China’s “Nickel King”, was to use his influential market position to short the metal, wait for the price to drop, then soak up the rewards when the value bounced back.
But then Russian President Vladimir Putin invaded Ukraine and things got complicated — fast.
Russia is one of the world’s biggest producers of nickel ore, a key component of batteries for electric vehicles.
As concussive Western sanctions over the invasion struck, the price of the silver-white metal rocketed to a record above $100,000 per tonne.
That was too high for Xiang and the entire metals sector, forcing the 145-year-old London Metals Exchange (LME) to suspend trading for a week and leaving nickel-reliant manufacturers struggling to digest the spike in costs.
Stuck in its positions — reports estimate it was holding at least 100,000 tonnes — Xiang’s company Tsingshan Holdings Group was suddenly on the hook for billions of dollars.
Tsingshan, the world’s biggest nickel producer, has been forced to buy back a large number of nickel contracts at higher prices to reduce its exposure.
A Bloomberg News report estimates the buy-back has contributed to a loss of $8 billion, suggesting the firm may need a possible bailout by Chinese authorities.
“Xiang is a shrewd player, but he was caught off guard with the Russian issue,” Li Bin, a nickel trader in Shanghai said.
When nickel trading resumed last week prices plunged to about $37,200 a tonne — still 50 percent higher than in February — as volatility courses through the market.
“After the historic squeeze, nickel is still struggling to find a price,” Susan Zou, senior metals analyst at Rystad Energy said.
– Self-made tycoon –
The market for nickel, essential to make batteries for EVs and a key alloy in stainless steel, is dominated by a handful of players.
Those include Tsingshan, headquartered on China’s eastern seaboard.
It was founded by Xiang, a self-made billionaire who is known among Chinese nickel traders as the “Nickel King” and “Big Shot”.
Xiang started his career as a mechanic in a state fishery and now owns two sprawling nickel manufacturing hubs in Indonesia.
Those include the Morowali industrial park that spans 2,000 hectares with 44,000 workers and its own airport and is seen as a guarantee a cheap supply of ore for Tsingshan’s China-side furnaces.
After his short went wrong, Tsingshan has to either pay off its debts or prove it has sufficient deliverable nickel to repay in kind.
“We are closely watching his next move because it could still roil markets,” said Li, the Shanghai nickel trader.
Those rising costs are already being felt by makers of EVs including Tesla and 20 other Chinese rivals such as Xpeng and BYD, which have all hiked vehicle prices over the past two weeks citing a rise in raw material costs.
“The price and supply shocks have pushed major battery makers to look for alternative metals to power electric vehicles,” analyst Zou said.
– Beijing to the rescue? –
Beijing could step in to rescue Tsingshan, Chinese media including financial news site Yicai reported, citing sources familiar with the matter.
There are discussions over allowing the company to swap its low-grade nickel products that do not meet LME’s quality standards with a purer form of the metal held in state stockpiles to settle its claims, Yicai said.
China is estimated to hold around 100,000 tonnes of nickel in state reserves, according to official data. Tsingshan and China’s state reserves administration did not respond to requests for comment.
Xiang has moved markets before, most notably in 2018 when he released large volumes of nickel pig iron, a cheap alternative to pure nickel, that can be used to make stainless steel.
“Xiang has always believed that because he is one of the world’s biggest players with ultra-low costs, he could keep the nickel price under his thumb,” said a former employee at Tsingshan, who declined to be named.
“He has always bet on nickel prices falling because his production cost in Indonesia is as low as $10,000 per tonne.”
Now Xiang has to decide whether to slowly unwind his wager and at what price.
On March 14, Tsingshan said it had reached an agreement with banks to hold on to the company’s nickel positions, signalling the billionaire was digging in his heels to ride out the crisis.
That could beat the LME further and lead to more price uncertainty for nickel, trader Li said, and create challenges for battery producers trying to replace petrol cars.
Traders, brokers and clerks on the trading floor of the open outcry pit at the London Metal Exchange in London, U.K., on Monday, Feb. 28, 2022.
Chris J. Ratcliffe | Bloomberg | Getty Images
LONDON — The benchmark three-month nickel contract fell 12% on Friday morning to hit a new trading limit, as heavy selling continued on international metal markets.
The price hit $36,915 a metric ton as it opened for trade, according to Refinitiv data. The 145-year-old exchange, which still has some open outcry trading, has had a wild two weeks with price surges, technical glitches and trading suspensions.
On March 8, nickel prices more than doubled in a matter of hours, climbing above $100,000 a metric ton as one of the world’s top producers, China’s Tsingshan Holding Group, bought large amounts to reduce its short bets on the metal. Trading had to be halted as the move exacerbated a price rally at a time when metals were already spiraling upward on Russia’s intensifying conflict in Ukraine.
Then on Wednesday, the LME attempted to resume nickel trading after the rare shut down. But a “systems error” allowed a small number of trades to go through below the newly imposed daily price limit, and the exchange was temporarily halted once again.
The LME installed a trading range of 5% on Wednesday which was widened to 8% for Thursday, and then 12% for Friday.
Speaking before the open on Wednesday, Matthew Chamberlain, CEO of the LME, told CNBC’s “Squawk Box Europe” that the exchange was “absolutely mindful of the impact that this has had on so many people and we need to make sure that it doesn’t happen again.”
Chamberlain said the LME had “deliberately prioritized stability” by setting a relatively narrow range of daily trading limits, but these could soon be widened if the exchange observed a “more orderly market.”
Commodity prices have jumped on supply fears related to Russia’s onslaught of Ukraine, with the ongoing war and an array of Western sanctions raising disruption fears. Alongside energy, Russia is a key producer and exporter of metals and grains. Indeed, Russia is the world’s third-largest producer of nickel — a key ingredient in stainless steel and a major component in lithium-ion batteries.
Chairman Xiang has been building short positions for a while
LME suspended nickel trading last week
Tsingshan’s business built on nickel productions in Indonesia
March 14 (Reuters) – (This March 13 story corrects size of Morowali industrial park in paragraph 20, and to show production data is for whole company, not only for its Sulawesi facilities, in paragraph 21)
Chinese tycoon Xiang Guangda has to find a way to bail his Tsingshan Holding Group out of a crisis after its bet on nickel prices backfired, fuelling more volatility in a metal essential for the electric vehicles industry.
One of the world’s top nickel producers faces massive losses on its short positions after prices soared over $100,000 per tonne last week and forced the London Metal Exchange to halt nickel trading. read more
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Tsingshan has to either pay off the outstanding short positions, which could be as high as $8 billion, or prove it has sufficient deliverable nickel to repay in kind.
Beijing could step in to rescue Tsingshan, a source familiar with the matter told Reuters. China could swap some of its high grade nickel reserves for low grade nickel pig iron (NPI) that Tsingshan produces to help it meet LME quality standards. China is estimated to hold around 100,000 tonnes of nickel in state stocks, two analysts said.
Tsingshan and China’s state reserves administration did not respond to requests for comment.
Tsingshan has figured in market swings before.
Last year, it triggered a price drop with surprise news that it would provide nickel matte to battery materials makers, potentially solving a key bottleneck for electric vehicles by boosting battery-grade supply in a cheaper way.
Betting prices would fall, Tsingshan started building a short position last year. The bet backfired partly as Russia’s invasion of Ukraine sent metals prices soaring, putting pressure on holders of big short positions, including Tsingshan.
“Markets were sensing that (Tsingshan) were going to make a move, but they probably made it too early … a quarter or so too early and nobody was anticipating what happened in Ukraine,” said Angela Durrant, Wood Mackenzie’s principal nickel analyst.
Tsingshan has suggested foreign elements may be driving up nickel prices.
“Foreigners do have some actions and we are actively coordinating [with related parties],” China Business News quoted Xiang as saying on March 8.
The market gyrations have had no impact on Tsingshan’s Indonesia operations, a corporate mining source familiar with the matter told Reuters.
For Indonesia, Tsingshan is a means to fulfill its ambition to become a one-stop shop for EV battery ingredients and the company has executed projects at lightning speed. Western firms often privately complained about the access and resources Tsingshan got in the country.
“Government has ambition in Indonesia, they want to build the hub for battery for electrical car. That’s why you see the policy to support the industry,” the source said. “We are affected by COVID, but not affected by this (short exposure).”
Tsingshan is also seen as a poster child in Southeast Asia for China’s Belt and Road Initiative, President Xi Jinping’s vast infrastructure programme.
In contrast to privately-held Tsingshan, several high profile projects led by Chinese state-backed firms have been mothballed amid overpricing, corruption and debt sustainability concerns.
MARKET DISRUPTOR
Founded in 1988 in Wenzhou, Tsingshan started out in stainless steel production and making automobile windows and doors.
But its fortunes changed when Xiang, 64, started exploring Indonesian markets in 2009. Over the next decade, it shook the global nickel industry with low-cost nickel pig iron.
It set up facilities in Indonesia, the world’s largest nickel producer, with output ranging from nickel sulphate to nickel matte, an intermediate product that can be used in both stainless steel and batteries.
Tsingshan is spearheading Indonesia’s two major nickel hubs, including the Morowali industrial park, which employs over 40,000 people and spans 2,000 hectares with an airport, mineral processing plants, a port and executive visitors hotel.
The company has said it aims to produce 850,000 tonnes of nickel equivalents this year and 1.1 million tonnes in 2023.
“There was nothing there on that site in 2015 … so they did something absolutely miraculous,” Durrant said. “Getting away from higher Chinese power (costs), moving everything over to Indonesia was a masterstroke for them.”
The industry credits much of this success to Xiang.
He became known as a market disruptor who could “take the world by storm”, said Steven Brown, an independent nickel consultant in Canberra who spent two days touring Tsingshan’s production facilities with Xiang in 2014.
Xiang opposes high nickel prices and is fixed on being a low-cost producer of nickel and stainless steel, Brown said.
“I don’t think this crisis will result in too much of a change in strategy from Tsingshan,” he added.
Market sources said though Tsingshan has cut its exposure it is unlikely to have fully covered all its positions.
State-backed Chinese newspaper Securities Daily said on March 9 that Tsingshan had deployed “enough spot products” for delivery by swapping its nickel matte with nickel plates in the domestic market.
The LME allows delivery of nickel cathodes, including plate, and briquettes.
“There isn’t much spot nickel product in the market, it’s not even likely that Tsingshan could get 100,000 tonnes,” said a Guangdong-based analyst who declined to be named.
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Additional reporting by Ed Davies and Dominique Patton; Editing by Diane Craft
Our Standards: The Thomson Reuters Trust Principles.
Swedish battery firm Northvolt said Friday it had produced its first battery cell with what it described as “100% recycled nickel, manganese and cobalt.”
In a statement, the Stockholm-headquartered company — which has attracted investment from Goldman Sachs and Volkswagen, among others — said the lithium-ion battery cell was manufactured by its recycling program, Revolt.
The cell’s nickel-manganese-cobalt cathode had been produced using metals “recovered through the recycling of battery waste.” Tests showed that performance was on a par with cells made using metals that had been freshly mined, Northvolt said.
On Friday, the business said the design of its own recycling facility would be expanded so it could recycle 125,000 tons of batteries annually.
Construction of the plant, called Revolt Ett, is slated to begin in the first quarter of 2022, with operations starting in 2023.
Read more about electric vehicles from CNBC Pro
It will use materials from end-of-life EV batteries as well as scrap from Northvolt Ett, the company’s gigafactory, where the first battery is expected to be produced before the end of 2021. Both facilities will be located in Skellefteå, northern Sweden.
According to the company, the Revolt plant will be able to recycle materials including lithium, cobalt, manganese and nickel, supplying the gigafactory in the process.
In addition, plastics, copper and aluminum will also be recovered and “recirculated back into manufacturing flows through local third-parties.”
In a phone interview with CNBC,Emma Nehrenheim, Northvolt’s chief environmental officer, said: “Theoretically, you can, by definition, recycle any metal that you have in a battery and make a new battery out of it.”
“As a fundamental strategy, this means that when the market of EVs is mature — so, at the point where [an] equal amount of cars would enter the street as the amount of cars needing to be scrapped or sent off for recycling — you can actually, in theory, have a very, very high recycling rate … of batteries.”
“And this means that you would not be subject to a very liquid raw material market and you would also protect yourself from very high footprints,” Nehrenheim, who is also head of Revolt, said.
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Northvolt’s plans come at a time when the shift to electric vehicles is beginning to gain momentum.
This week, signatories to a declaration at the COP26 climate change summit said they would “work towards all sales of new cars and vans being zero emission globally by 2040, and by no later than 2035 in leading markets.”
While the U.S., China and carmakers including Volkswagen and Toyota were absent from the declaration, signatories did include the U.K., Mexican and Canadian governments and major automotive firms such as Ford, General Motors and Volvo Cars.
As global supply chains face serious pressure due to a multitude of factors, the notion of recycling materials and developing a circular economy is starting to become an attractive proposition to some businesses, including those in the electric vehicle sector.
In March of this year, Lucien Mathieu, from the Brussels-based campaign group Transport & Environment, sought to highlight the potential of recycling in the EV industry.
In a statement on T&E’s website, he said: “Unlike today’s fossil fuel powered cars, electric car batteries are part of a circular economy loop where battery materials can be reused and recovered to produce more batteries.”
The recycling of battery materials, Mathieu argued, was crucial when it came to reducing “the pressure on primary demand for virgin materials” and limiting “the impacts raw material extraction can have on the environment and on communities.”
‘Much more local’
Northvolt’s Nehrenheim was asked about how important she felt ideas about recycling and a circular economy would be going forward.
“I think this is going to be the key driver for any new industry,” she said. “There will be no disruptive technology that can live without this and I think that in the long run … recycled materials in any industry will out compete any other.”
“Long term, it’s going to be much more profitable once the processes are established to just use a product to produce a new product,” she went on to state.
“You’re reducing dependence … on the raw material market, you have a much more sustainable source … it’s much more local.”
A Tesla car charges at a Tesla Supercharger station on April 26, 2021 in Corte Madera, California.
Justin Sullivan | Getty Images
Shares of mining giant BHP Group jumped 3% in Australia on Thursday morning, after the company announced it will be supplying nickel to electric carmaker Tesla.
In a statement on Thursday, BHP said one of its mines based in Western Australia, Nickel West, will be supplying the world’s largest electric vehicle maker with nickel, a key raw material used in EV batteries.
“Demand for nickel in batteries is estimated to grow by over 500 per cent over the next decade, in large part to support the world’s rising demand for electric vehicles,” BHP Chief Commercial Officer Vandita Pant said in a statement.
BHP currently derives most of its earnings from iron ore, used predominantly to make steel.
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While there were no specifics on the deal amount, Tesla had said in June that it expects to spend more than $1 billion a year on raw materials for batteries from Australia, citing the country’s responsible production practices, according to Reuters.
BHP claims to be one of the most sustainable and lowest carbon emission nickel producers in the world.
EV batteries will certainly be critical and drive interest in copper and nickel in particular.
Vivek Dhar
commodity analyst, Commonwealth Bank of Australia
The mining giant currently supplies 85% of its nickel to global battery material suppliers, according to its website. It has also almost finished building a new plant which will produce nickel sulphate, a material used in the lithium-ion batteries that power electric vehicles, the website said.
Outlook for nickel
Major miners are set to go bigger in the mining resources needed to decarbonize the global economy, Vivek Dhar, a commodity analyst from the Commonwealth Bank of Australia, told CNBC via email.
“EV batteries will certainly be critical and drive interest in copper and nickel in particular,” he said.
However, Peter O’Connor, metals and mining analyst at Shaw and Partners, was less bullish on the overall nickel sector, in terms of space for new players to increase their market share.
He said the nickel market is still very small, with long-term sales turnover of around $40 billion. Moreover, besides BHP, there are other key large players already crowding the market, such as Brazil’s Vale and Russia’s Norilsk Nickel, he told CNBC on Thursday.
BHP is listed in Australia, New York and London.
Senior resource analyst Gavin Wendt from MineLife told CNBC earlier this week he has a 12-month price target of 60 Australian dollars ($44) on BHP, which is currently at 51.40 Australian dollars. His comments came before the nickel supply deal with Tesla was announced.
“BHP’s share price performance has been extremely strong and it is outperforming its fellow resource heavyweight, Rio Tinto,” he said, referring to another major Australian miner.
“In fact, BHP has over the past 12 months outpaced the S&P/ASX 200 Index by around 14% – and it’s trading not far off its all-time record high of $51.82 achieved in May, with its price up by around 36%,” he told CNBC on email.
A GM employee poses with an example of the company’s next-generation lithium metal batteries at GM Chemical and Materials Systems Lab in Warren, Michigan, September 9, 2020.
Steve Fecht | General Motors | Handout | via Reuters
BEIJING — Growing demand for electric car batteries will cause prices of the main materials to surge, Goldman Sachs analysts said in a March 18 note.
That in turn will drive prices of batteries higher by about 18%, affecting the total profit of electric car makers since the battery accounts for about 20% to 40% of the vehicle cost, the Goldman analysts said.
While the report didn’t give specific price targets for the commodities, the analysts’ model predicted a return to historical peak prices would more than double the cost of lithium for electric battery makers. That of cobalt would also double, while the cost of nickel would rise by 60%.
A new type of battery
Limited availability of nickel suitable for car batteries could even accelerate a shift to another kind of battery called lithium iron phosphate (LFP), the report said. Tesla and Chinese start-up Xpeng are among automakers already using this type of battery, which does not use nickel or cobalt but stores relatively less energy.
If nickel prices hit their historic high of $50,000 per tonne, that could add $1,250 to $1,500 per electric vehicle, which could hurt consumer demand for the cars, the analysts said.
Ultimately, the growth of the electric car industry and demand for battery materials depends on how many vehicles people buy. The tipping point for consumers broadly to switch from gas-powered vehicles to electric cars is generally expected to come when the battery cost has fallen sufficiently.
That shift could happen in the next decade. Goldman predicts battery costs will drop below that of internal combustion engines in 2030.
