Regular column, presenting you with reading material and food for thought on lithium, commodities and geopolitics.
Below a very interesting chart presenting the growth of revenue for Ganfeng Lithium. With listing in Hong Kong approaching, EV sales on the rise, new agreement for supplies to Tesla and extension of supply agreement to LG Chem, future looks as bright as ever for the company.
New report from Technavio
New report is issued by Technavio on EV sector growth for years 2018-2022:
Key take-aways, 11% CAGR, 64% of market share for EVs originating from APAC at the moment, higher incremental growth in Americas than in EMEA.
Despite efforts of European governments and private players and an exemplary rate of EV penetration in countries as Norway, EU is far from leading the pack on EV market.
EV sales in US 110% growth year over year
InsidEEVs produces an excellent statistics on sales of Plug-Ins in US. We wish there were more data like that for other countries. If you know similar initiatives for other jurisdictions, do not hesitate to share the links in comments.
It seems that every car sale in 40 in US is a Plug-In, with an excellent ratio of 1 to 10 in the state of California!
Indian stock exchange fastest in the world
BSE formerly know as Bombay Stock Exchange is a fastest stock exchange in the world, with the speed of 6 micro seconds. It is also India’s largest SME platform which has listed over 250 companies from that segment and continues to grow.
Check their tweeter account. Cool design.
Arctic shipping route and low sulfur legislation
In order to shorten the marine shipping route from Europe to Asia to around 15 days from current 30, companies and governments look into possibilities of rerouting through the Arctic. Russia is much interested in the project, as it could boost its economy and enhance its global footprint, since such route could be protected/controlled by Russian military.
One of the arguments against the route is a lack of ports along the way, for vessels to refuel and restock the supplies.
The initiative below shows often omitted environmental concerns. It is a pity that environmental impact studies discussed in the article do not take into consideration high sulfur fuel limit globally enforced by International Maritime Organization since 2020.
Interesting initiative related to the new sulfur cap and explaining the regulation more in detail, can be found here
Main problem with new low sulfur fuels is that in contrast to high sulfur fuels called HFOs (Heavy Fuel Oils) they will be not compatible ( however maybe standardization will come with time?) Meaning that lows sulfur bunker fuel from one producer will not mix with low sulfur bunker fuel from other producer, leading in extreme situations even to engine failures/damage (while old HFOs widely used now mix without problems).
Hence for ship owners and managers planning the journeys, it is crucial to know, where they will be able to re-fuel what fuel grade, as the vessel travels across the world. LowsSulfur.com aims to solve this problem with a provision of database.
“Per Section 1502 of the United States’ 2010 Dodd-Frank Act, companies listed on the stock exchange are required to disclose their use of conflict minerals — tin, tungsten, tantalum, and gold (3TG) that “financed or benefited armed groups.”” – It is outrageous that cobalt is still not listed, considering mostly artisanal character of its mines in Congo.
But even for 3TG minerals legislative effort is being retraced, as an excellent article by DigitalTrends brings to our attention:
“In February 2017, The Guardian published a draft of a proposed Trump administration executive order calling for a two-year suspension of Section 1502. Later that year, the Securities and Exchange Commission indicated it wouldn’t enforcethe rule the required companies to indicate if they were using conflict minerals. The number of companies that filed a conflict minerals disclosure in 2018 (1,098 filings) dropped by 5.1 percent, which is higher than the average decrease of 4.5 percent per year since 2013 (1,320 filings), according to Development International.”
The article highlights also business opportunities related to conflict minerals supply chain compliance. Yet it is obvious that success of such business models is legislature driven, so with current attitude of US administration they might be put on a back foot.
“Estimating the number at around 3,000 artisanal mines in the eastern DRC, Matthysen said, “It’s impossible to control all of those mines.” One program that’s attempting to do so is International Tin Association’s ITRI Tin Supply Chain Initiative (iTSCi). Starting with a pilot mine in 2010, the industry program has grown to monitor more than 400 DRC sites in 2016. The traceability system includes the “bagging and tagging” of minerals, weighing the bags and making sure nothing is added or removed along the supply chain. It’s meant to ensure tantalum from a non-certified mine doesn’t get mixed in with a batch from one that’s been designated as “conflict free.” It’s a designation companies are willing to pay for. “They become something like a clearing house,” Bayer said of ITA. “They’re like an exchange now, that’s how big they are.””
Article also underlies the antiquated state of most tracing systems, that rely on pen and paper logs and old software. It also mentions prospects for application of blockchain.
Blockchain in its essence is just a distributed ledger, where for entry to be changed it needs to be changed in all places where it is distributed. Usage of blockchain would mean that in case of any discrepancies in between checkpoints, as the mineral travels its route, records would not be able to be easily readjusted.
Now, with some of the tracking systems in place, all sorts of monkey business is possible, if parties who constitute the checkpoints agree to adjust the logs to their advantage.