This is Dana Perkins and you're listening to Switched on the b and EF podcast. On today's show, we're taking a look at a metal that is integral to the majority of electric vehicle battery chemistries and it is therefore one of the most in demand medals. That's lithium. Last week there were a couple of new discoveries of lithium deposits, both in the United States and in the Czech Republic.
It's clear that countries around the world are looking to find this important metal, but what about refining well, Currently that part of lithium's supply chain is dominated by one country. And then what about the companies involved in this space. While there is a small list of dedicated mining companies that are on the case. On today's episode, I speak with two analysts from Benof's London office who know a
thing or two about lithium. One is a metals and mining analyst, Elie Gomaskalis and the other from our batteries team, Andy Leach. Together we discuss where lithium is found, along with the different forms it takes, how it's mined, and the ecological impact of the different processes, as well as why the majority of major diversified miners might be avoiding
this metal, and which nations are controlling the supply and refining. Lastly, we come to the relationship between lithium and different battery chemistries and whether or not sodium ion batteries could pose a threat to its dominance. If you'd like to learn more about lithium, BNIF subscribers are able to access the links that are included in the show notes, which relate to different b and EF research that's found on BNF
dot com. As always, if you like this podcast, make sure to subscribe and you'll receive an update every time we publish a show. And if you want to spread the word to others, give us a review on Apple Podcasts or Spotify and will make us more discoverable. But right now, let's come to my conversation with Ellie and Andy about lithium. Ellie, thank you for joining today.
Thank you for having me, Dana.
And nice to see you as well.
Andy, thank you for having me.
All right, let's start with the history lesson part of this. So lithium, I want to know when did I mean? It's definitely something that many people who are listening today we are aware of this metal. We are aware that is critical for batteries, but when did the use case for lithium really take off and essentrally, are we competing with another incumbent industry or did batteries put lithium on the map.
So lithium has had a number of uses over the years. It's been used in the past as a medicine for mental health issues, It's been used in glasses and ceramics. But since nineteen ninety one it's been used as a battery material. And nineteen ninety one was when Sony first commercialized lithiumine batteries, and they use lithium cobo oxide as
their cathoide material. And since then batteries have grown their demand segment and as a consequence, they're now very much the main demand use for lithium.
So consumer electronics really make lithium in some respects a household name or at least a piece of many household products that we're very aware of and interact with. But then now with it a part of batteries and really seeing the electric vehicle industry take off, and certainly the forecast that we see in our electric vehicle outlook, which we do on an annual basis shows that there will be increased demand. What sort of demand are we really forecasting for lithium ion batteries specifically?
So you're right, as you mentioned, lithium started in consumer electronics, and it wasn't until the late twenty tens, at only twenty nineteen, where batteries are being used in electric vehicles became the main demand segment, and that's only expected to continue to grow. So between now and twenty thirty five, the lithium I'M battery demand in vehicles is expected to really drive demand globally, and that will see a ninefold increase from twenty twenty two levels to twenty thirty five.
Now, battery chemistry seemed to constantly be changing, and honestly, I was speaking with my producer today and saying we should be doing a show specifically on battery chemistries. But for just the next couple of minutes, lithium ion batteries certainly make it clear that there is lithium in these batteries. Is lithium found in other battery chemistries just not as prevalent, or are lithium ion batteries the only ones that have lithium in them so.
Yeah, as you say, lithium in the name of lithium ion batteries is the lithium is in all these batteries. There are other battery technologies which are emerging at the moment, but their uptake and commercial uses is very low at the moment. So sodium ion batteries is a key sort of disruptive technology that we expect to see come into
the market over the next couple of years. But at the minute, there's not very many people manufacturing these batteries at a commercial scale within different battery chemistries, within the lithium ion battery family, as it were, Lithium use does vary between the chemistries for the amounts of energy that you can store, so per killer or tower of energy that you can store in the batteries, and we have some reports that discuss these different levels of lithium in different batteries.
But it would be safe to say that the forward outlook for lithium is increased demand. And then therefore we're here to talk about really how where who do we get the supply from?
Yeap, So, as I said, sodium ion batteries are a disruptive technology which may come in to the market and take some market share. However, in the electric vehicle outlook we did earlier this year, we looked at a couple of different scenarios of sodium ion penetration into the market. At a scenario where there wasn't any a scenario with a sort of expected amount of sodium iin in the chemistry mix, and a very aggressive sodium ion uptake in
the market. And even in the most unlikely and disruptive and aggressive sodium ion uptake, we still see a five fold increase in lithium demand out to twenty thirty five. And this is just a consequence of the whole lithium ion battery industry growing so much, as I previously mentioned. So even of the sort of market share of lithimum batteries drops a little bit, because the whole market is growing so much, lithium demand is expected to increase.
So let's go then to where we find this supply. Where in the world is it located? And you know, can we find it everywhere? Are there a few countries that actually have the majority of the supply?
So lithium deposits are sort of split into two different sections. The first is hard rock and predominantly the industry talks about spody mean, this is one of the higher grades of lithium ore and that is usually found in Australia. And there's different areas such as Africa that also have
SPoD you mean, and hard rock mining there too. Then in lithium, there's also another deposit, which is lithium can be found in brine, and this is found in groundwater all around the world, but predominantly it's found in South America.
I find it really interesting that you find lithium in brine. I mean, you think so much about mining in terms of it actually being extracted from somewhere deep within i rock as opposed to in some respects kind of quite close to the surface. Can we go into a little more detail on mining and then following that come to the refining process. How difficult is it for us to get this out of the ground. For the companies that are trying to extract it is a very costly endeavor.
So, as I mentioned before, the two different types of posit require two different types of mining or extraction methods. And first you have the extraction from hard rock, and that is typical type of mining. You have the large rocks in the back of the big lorries and you have them running around at like twenty miles twenty miles per hour, or it's essentially dug up, crushed, ground and roasted at high temperatures before being filtered, purified and turned
into lithium carbonate. And lithium carbonate is a battery gade product, so it goes directly into the manufacturing of these batteries. However, lithium carbonate can be further refined into lithium hydroxide and
this is also another battery grade product. Brine extraction is slightly different because here you have vast areas of saline ground water that are pumped to the surface by project developers and these are left to evaporate in a series of ponds, which leaves a concentrated brian remaining, and once this remains is then filtered purified into lithium carbonate, which
may then be turned into lithium hydroxide. In terms of cost, our estimates show that spodamine extraction is at least double the price of brine extraction, with prices starting at around four thousand dollars per ton.
And spojamine extraction spodamine being the rock that the lithium is literally found in yes.
So it's a type of lithium or and at the moment it's the industry's preferred or type because it has some of the higher grades of lithium in it.
In the process to make battery grade lithium, where in refining does it actually change hands and change countries from where it was extracted to those who are actually refining it.
So with brine, because of the process and the inherent characteristics of the process, it means that a lot of the refining happens at the same site at which the brian and the evaporation pools are because it's difficult to transport a concentrated Brian solution in liquid from one place to another. It just doesn't really seem feasible. So a lot of the refining happens at the same site. However, where it changes is that a lot of a lithium carbonate may be shipped to another country to then be
turned into hydroxide. It wouldn't necessarily happen in the same location as.
The brine extraction.
On the hard rock, you have a bit more flexibility because it's a lot easier to deliver rock or ground up rock to another location rather than a concentrated Brian's what we see is once it's got past the crushing and the grinding and the roasting, it's sent overseas, usually to China to do some more refining.
Now you say usually China, how much of refining actually takes place in China?
So according to our BNFD risked Supply database, around seventy two percent of lithium was refined in China in twenty twenty two.
That's a huge part of the market. And in terms of looking into the future of that, does that seem to hold for the next five plus years.
Yeah, for sure. We see that China continues to dominate up to at least twenty thirty.
And how much of the lithium that's actually extracted and making its way to China is coming from external sources versus being well, I guess domestically produced.
So if we look at the MIND supply again, looking at figures for twenty twenty two, Australia was the world's top producer of mind lithium with forty two percent of the market share, followed by Chile with thirty percent of the market share, and then China finally with twenty percent of the market share, so it only had a fifth of total mind supply in twenty twenty two.
So does that mean that ultimately China is buying that lithium from elsewhere and then selling it on or are the companies essentially that are making the batteries buying the lithium but then sending it to China for refining who owns the lithium? And essentially is China acquiring a large amount of the world's existing lithium supply in order to refine it and then sell it on.
So the answers question goes quite a long way back, and it starts back in the late noughties where China decided to give all these political commitments to green technologies because they saw the energy transition as an opportunity and the country had ambitions to become a midstream and downstream manufacturing base, and it had what it needed to do that, but it was missing the key ingredients, which is critical minerals.
So what it did is it started to invest early in some of these upstream projects overseas to ensure that they had that constant stream of material and lithium coming in to meet their battery manufacturing capacity.
And when you say invest early, you mean early two thousands, so literally twenty years ago or did they buy up these assets quite a long time ago?
Is where they sort of had the vision and then lithium only started really becoming big in terms of demand and seeing it as an opportunity mid to late teens.
This is really useful context because I think oftentimes when we talk about being in an industry early, we're not talking about ten years ago. We're talking about so much further back. But the stuff that we're looking at here, the change is happening so fast. That's really fascinating that we're dealing with these very short periods of time, but really do ultimately make all the differences to whether or
not you're an incumbent player. And you certainly see that when it comes to charging networks, which is the topic of last week's show. So when it comes to China and their role in this space, they saw in advance that there was going to be the transition, and I guess we're a bit of conjecture here as to what was happening, but we certainly do see policies and decisions being made in terms of being involved in the lithium industry before it was the lithium industry that we know today.
Can you give me a couple of examples of things that China did to make sure that they would be one of the established players in this space that now has over seventy percent of refining capacity.
The two big lithium players in China are Gang Feng and Tian Schi. If you first take Gunfeng, they have a fifty percent ownership in the Mount Marion mine in Australia and this started production back in twenty seventeen and it's now the second largest lithium mine in the world. So having a fifty percent ownership in that obviously gives some access to this really really valuable and high in
demand material. But then if we look at Tian Schi, they took a slightly more delayed approach and they bought twenty five percent stake in SQM, which is based in Chile back in twenty nineteen, and SQM and now of the world's second largest lithium producer. So these two examples show you how China, moving before the crowd, has given them a secure and stable supply of a metal that's high in demand and It's important to remember that these
are only two examples. China has done this over and over again around and around the world, and having this upstream presence paired with their downstream presence at home means that they have ranked number one on all three editions of BNF Global Battery Supply Chain Ranking.
So, if I am in the finance industry, I care a lot about environmental, social and governance. If I'm looking at these ESG factors and I'm looking at batteries and trying to assess my supply chain, what are some of the things that really someone would look at in regard to lithium and assess whether or not they are fitting into that profile of companies that they actually can invest in.
So I'd say there's three main things to consider when looking at lithium extraction, the first being carbon emissions. So if you take hard rocked mining, for example, this is very energy intensive. It uses lots of large machines, a lot of energy to crush, to grind, and to transport all around. If we move to brine extraction, it's a slightly different problem. Lots of brine extraction happens in very arid conditions and the process uses up a lot of water and can disrupt fragile ecosystems.
So the ecosystem and then also it's competing for water use potentially with I'm thinking agriculture and other uses for drinking water exactly.
Research has shown that the amount of water used by the lithium industry can actually feed and sustain small communities of up to tens and thousands of people.
So it's competitive with other things that may be a more important priority in that region. So then the other question I actually have is around the hard rock and this other form because when you mention energy intensity, immediately, at least working here, I immediately think, oh, okay, well, then what is there such a thing as green lithium And has that been something that has started to come
on the map? And what I mean by green lithium is essentially energy that has come from renewable sources in order to facilitate this breaking of rocks.
Yeah, the short answer is yes. There have been companies that have been aware of the scrutiny that the industry has been under and are trying to prepare themselves for the transition towards net zero and towards a lower carbon world, and switching to renewables is a really easy and quick way of doing this. However, it doesn't solve the whole problem, and the industry can make sure that they are actually combating and trying to prevent these problems as much as they can.
So it isn't just investors that are looking at trying to make sure the production of batteries and their supply chains are the best possible that they can be from environmental standards standpoint. There are also policy makers various parts of the world that certainly must be looking at this.
Yeah, for sure, Dana, and at the end of twenty twenty two, the EU agreed the battery part of the Green New Deal, which forces in fact batteries old in the European Union to meet certain requirements. One of the
key requirements is a carbon footprint target. Now we're still waiting for the European Union Commission and other members of European policymakers to give exact numbers on what these targets will be, but we know that over the next few years these targets will be coming in and forcing batteries sold within the EU to meet these targets.
And it might also be worth mentioning on top of that that the EU announced the Critical Raw Materials Act back in March twenty twenty three, and within that these sustainability ambitions also went upstream. So they are looking to try and create a benchmark where industry has to meet a certain level of sustainability of the materials they produce and they can be ranked against each other.
Give me an idea for the types of companies that are actually involved in this space. Is lithium just part of a portfolio of many other medals that company might be mining, or are these quite specific pure play miners that are really looking at this in a more exclusive capacity.
So what we see is that the majority of the top ten lithium producers are exclusively into lithium. So the top two that I mentioned already, the first being album Mar which is American based, and the second being SQM, which is based in Chile. Then you also have the Chinese players Gamfeng and Tianchi, as well as Pilbra in Australia.
So they're scattered all around the world. But what is quite unique about lithium is there's lots of smaller players that are looking to get involved, and I think this is because the market is just finding its feet, so it's establishing itself and with this is coming lots of smaller players that are contributing positively to the demand and supply of lithium.
So that would mean that these are predominantly fairly new companies that may not have existed or at least not existed in their current form twenty plus years ago.
In some cases yes, but in cases of the big players such as Albama and SQM, historically there were actually chemicals companies and what we've seen them do is we've seen them tailor their expertise towards an emerging demand.
So this has been a pivot for these companies. And then I guess that begs the quest and if we're seeing increased demand going forward, are there other companies that look to be pivoting into that space right now?
Well?
I think about that question as metals and minor analysts, I will automatically think of the major diversified miners, so the glen cores, the bhps, the valleys, the Anglo Americans, and surprisingly we haven't actually seen a lot of these companies pivot towards lithium apart from one Rio Tinto, who back in twenty twenty one purchased the Ricon mine in Argentina and recently reinforced their position as the only diversified miner to be interested in lithium earlier in August by
investing into Rwanda. So I think the main reason that these other big miners aren't that interested in lithium is because firstly, they have other battery metals in their portfolio. So a lot of these companies have copper, aluminium, nickel, cobalt, manganese, which will all benefit and grow in demand thanks to the lithium iron battery boom. I think because lithium's only sort of gotten big over the past five six years, it means that it's still quite a high risk area.
And though high risk can equal high reward, some of these big miners have too much on their plate and have too much on the line to sort of just take these dramatic steps and venture into a space where it is still a bit of the unknown.
And is it high risk because of pricing volatility?
Put simply, I would say yes. If we look at the prices over the past two years, we've seen them go from around fifteen sixteen thousand dollars per ton in twenty twenty one, to over seventy thousand dollars per ton in twenty twenty two, and now in twenty twenty three. As of a few weeks ago, it was at twenty six thousand per ton. So this constant up and down, unpredictability and volatility does equate to high risk in the mining world.
I could certainly see how this would be something that traders would be watching closely, but then the volatility for the companies is maybe less appealing. When it comes to lithium, there does seem to be, though this four trajectory, that demand is going to increase, and we've brought that up a few times on this show. So it seems like, okay, let's look at the future for lithium. It seems reasonably sunny.
But early on in the show, Andy, you reference that there might be other technologies that could be nipping on its heels, reducing the global demand for lithium and potentially preserving water and carbon emissions. What are the other technologies that you would say are on the edge from a battery standpoint that could give lithium a run for its money.
So, as I mentioned earlier, sodium mine is one of the key technologies which is competing for some market share at least in the near future, versus traditional lithium ion batteries. There are other battery technologies which may be relevant, for example, energy storage projects like flow batteries, something that we've seen sort of growing industry for in China. But there's also within lithium iine batteries there are a range of different chemistries which are constantly competing for.
Market share, all optimizing certain metals over the others. But you brought up sodium ion in particular, So what are some of the pros and cons. Let's start with the pros. What are the prose of a sodium ion battery and why might it have a rosy future?
So sodiumne batteries the main prose that they don't contain lithium. As Elia has already mentioned, lithium has had a really volatile time in the commodity markets over the last couple of years, and sodium is much more abundant, it's much more geographically diverse with respect to where you can find it, and it's much cheaper as a consequence. So the main benefit is a cost benefit because it doesn't contain lithium.
Wow. So it's literally the lithium ion part that makes it. It's the lithium. So when it comes to the sodium ion batteries, now, what are some of the drawbacks and why are they not already everywhere that we turn, and why are we not having the show lead with sodium ion batteries.
Sodium mine batteries have a lower energy density, So this means that you can store less energy in the same amount of space or the same amount of mass, and this means that if you're putting them in an electric car, for example, the number of miles or kilometers that you can travel will be fewer.
So essentially this gets at the heart of whether or not range anxiety is or isn't the thing, And we certainly go back and forth on this one. But sodium ion batteries would mean vehicles that just have a very different use case. They're certainly not going to take me on a road trip for.
Sure, as I say, they have a lower range, and for some applications or for some regions, this might be okay. So for example, the best selling electric vehicle in China last year was the Hongyang Mini, which has a price of less than ten thousand dollars, but it has a very small battery pack range of only one hundred and
twenty kilometers. But this was the best selling electric vehicle in China last year, So it's possible to see that a market like this where the best selling vehicle has a very short range could sort of offer some market share to a lower range but cheaper battery like sodium mine.
Now, those that are developing these new battery technologies, are they also the same manufacturers of the lithium ion batteries, essentially looking to diversify or as you mentioned, reduce their reliance on this price of lithium that essentially is vollatile. Is that something that they're looking do at these completely different companies, and essentially we are headed towards a very competitive future for vehicle batteries.
It's a combination of both existing manufacturers and startups. So if you look at for example, coatl, the world's largest battery manufacturer, they announced in twenty twenty one that they were going to be producing a sodi mine battery in the future, and they have made some more announcements this year confirming these announcements. Also byd and other Chinese manufacturers who are existing players are entering this space and making
announcements that they want to make these batteries. But there are startups as well, like Heina, a Chinese company that's got gigawa hour production starting at the end of last year, and also companies like Autras Feradian in Europe and Natron in the United States.
So let's talk about some other sources of potential disruption for the lithium supply chain. Let's talk a little bit about geopolitical issues now, with over seventy percent of refining in China, that certainly is a vulnerability when you have so much in one part of the world, same with
mining predominantly being in Australia. Are there other issues that need to be considered regarding first of all, sources of disruption and other producers that could come online or other things that maybe I haven't even thought about.
So, yeah, dependence on one supplier is never a good thing, and we've seen issues with that over the past few years with COVID and the Russian's invasion of Ukraine where we've seen gas or even everyday objects the supply chain completely disrupted, and the potential is there for the same to happen to lithium iron batteries as well. But diversification
won't solve everything. If we look at some of the key places where we get battery mestals from, there are some other sorts of risk there, and these normally surround political landscapes. Last week, for example, in Gambon, there was a military coup and this led to the temporary suspension
of a manganese mine in the country. A few months ago prior to that, in March, the Chilean government announced that they would like a majority stake in all the lithium projects that are going to come online from then on. Then even further back into twenty nineteen, we saw Indonesia ban on pro nickel from export. So there's all these changes that happen in the political sense that could disrupt and have disrupted supply chains just as much as a dependence on one supplier.
Another thing to consider, as well as the mining and refining being dominated by Chinese companies, is moving along the value chain to making materials for batteries, so anodes, cathodes, separators,
and electrolytes. Currently over seventy five percent of manufacturing capacity for all of these components is based in China, as per company announcements, and if we look at where this is going over the next few years, this is an industry which is getting more and more dominated by Chinese companies, and that manufacturing capacity for battery components is becoming more Chinese out of twenty five.
The Inflation Reduction Act in the US certainly has the aims of bringing a lot of manufacturing of various industries back on shore and to nearshore and onshore, different parts of clean energy, certainly things that we've talked about in other shows. How does this impact batteries and lithium? Has there been a move for the US to essentially take part of either the refining process or battery manufacturing process on shore.
With respect to battery manufacturing, there have been billions of dollars of announcements from automakers as well as battery manufacturing companies making joint ventures across the United States in the last year or so since the announcement of the Inflation
Reduction Act. However, these announcements and this investment is currently relatively limited to sell manufacturing and with respect to manufacturing components, as I previously said, like cathodes, anode separators and electrolyte These announcements haven't yet been made to onshore the whole value chain of battery manufacturing.
How about refining. Is that something that companies are looking to put in different parts of the world or is this established incumbent player likely to continue to hold battery refining in their country for the foreseeable future.
So to take it back a bit, the IRA basically introduces this EV tax credit, which is worth up to seven five hundred dollars, and to be eligible for this tax credit, automakers have to meet a certain level of critical mineral requirements and battery component requirements. For the battery component requirements, it means that a certain value of these components have to be assembled or manufactured in North America.
And for critical minerals, it's a certain value of the crystal minerals in the battery have to be extracted or processed in the US or in a country that's got a free trade agreement with the US, or in Japan.
Are these high percentages of the overall.
They came into play at the start of twenty twenty three and up until twenty thirty two. The value is slowly increasing so for critical minerals, the value starts at forty percent of those in the battery have to come from these predetermined locations. In terms of the investments that we've seen since the IRA, unfortunately in the raw materials and mining side of things, it hasn't met or reached
nowhere near the amounts seen in the battery manufacturing. So to put some numbers to it, battery manufacturing has seen forty two billion pounds of investments since the IRA was announced, but raw materials investments in mining and refining has only seen one point three billion, and this is a massive difference.
So actually, just to summarize, I would love for you guys to just really kind of put it all in order. In my mind, there's this kind of hierarchy, if you will, of different mining sources for lithium, and then places where well one place in particular where much of the refining is taking place. And then invariably we're also seeing manufacturing of batteries that being much more distributed. We mentioned the Inflation Reduction Act and how that's actually actively changing the
way the US look is approaching battery manufacturing. This then leads me to wanting you guys to clarify who army. Does the future look similar to today or the research that you're looking at, whether it comes from these sodium ion batteries or for different countries trying to increase their mining capacity. Does this look like a space that's going to have a ton of disruption in the near term?
In sure, I think yes. With respect to the technologies, there's constant innovation. Sodium ion batteries have been around for as long as lithiumin batteries. Their original scientific discoveries were of a similar time, but the lower energy density left them part for a long time, and now they're making
a big comeback. And if we go back just a couple of years, a similar thing happened with lithium ion phosphate, so still a lithiumin battery, but it was a chemistry that had gone out of favor for a bit because of its lower energy density. But high lithium prices and innovations and developments with this technology meant that it became one of the more popular chemistries that we talk about today.
And I think that this will only continue to happen into the future with solid state batteries and maybe even other other technologies that are still very much on lab benches rather than in factories today.
It's funny that Anthy said yes, because I was going to say no. So over the past few years we've seen a really really big effort for countries trying to diversify supply chains, and leaders have reinstated their ambitions to try and diversify supply chains in a sustainable and responsible way,
which is great. But if we look at them of this in the near term, so say the next five, six, seven, eight years, I don't envision a massive change in terms of the lithium producers, the lithium refiners, and the processes and supply chains for other battery metals as well. Efforts will be going in the right direction, but I don't think they can knock China off the top spot anytime soon.
Does that have to do with the long times it takes to build a mine and to build refining capacity with respect to permitting and other other sort of issues.
For sure. So if you look at average mining timelines from expiration to production can take up to sixteen years. So more and more we're seeing companies investing into looking in lithium deposits and other deposits of other battery metals, but they're not going to see the light of day until the twenty thirties, and those have already been discovered
and they're halfway through these timelines. These processes include a lot of red tape, and as we're seeing more of a focus on the environment, some of the environmental processes and permitting which is getting a stricter, which is adding further today's.
And the rights to actually buy this lithium to actually use it in these batteries to be produced in the future. Have those contracts largely been secured or is that something that the lithium industry comes to the table out each year.
So a lot of companies purchased lithium in advance, not necessarily years and years in advance, but we see off take agreements ranging from about three to five years in general.
Okay, we have come to the water ignore section of the podcast, which occasionally I throw this in the end of a show, where I want to ask whether or not you the experts who are looking at this all day are keeping a close eye on something or potentially kind of tabling it to the background while you focus on other things, because you don't think it's quite as important now when it comes to these sodium ion batteries and a vehicle that essentially has less range but is
also less expensive. Having just come back from the US and driving on some of the freeways there, I saw a lot of very large SUVs and in water ignore sodium ion battery powered vehicles in North America.
I like to watch as many things as I can, but I don't expect sodium ion to be in vehicles in North America anytime soon due to, as you already mentioned, the lower range. So this is not in the forefront of my thoughts at the moment.
Where is the predominant use case do you think with.
Respect to vehicles? I think smaller vehicles with lower ranges, so small cars for sure, but then also two and three wheeled vehicles, so electric electric motorcycles or tik tooks which you may find in Asia, for example, which have historically used lead acid batteries. And with respect to lead acid batteries, sodiumine is actually an energy density improvement, so it may even offer arrange improvement for these vehicles.
Okay, so Ellie, one for you, and I think you've already answered this question, but I'm going to make you give me an answer that we're going to have to stick to. Are you watching or ignoring the idea of refining capacity coming specifically to Europe or North America for lithium dana.
That is a really, really hard question, because it's like you're trying to make me choose between my head and
my heart. What I would say is, although I don't see anyone replicating exactly China's success, what we are seeing is policies coming into place, like the IRA and the CRM, like the Europeans Critical Raw Materials Act, that are pushing companies in industry in the direction of these alternative locations, and with the targets they have in place, and with companies that are based in these locations that have a demand for local materials, I think we will see increasingly
more and more refining happening in other parts of the world.
Okay, So last one in the watcher ignore section, the Carbon Border Adjustment Mechanism SEABAM. Are you watching or ignoring whether or not there is potential for SEABAM to expand to include battery metals.
So on SEABAM, I think we should shelf it for now, but I think it's something we should definitely revisit in the future as demand and supply of battery metals increases massively, and also until we see the success of the currency.
Bam okay, Ellie, Andy, thank you very much for joining.
Thank thank very much, Dana, Thanks Dana.
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