“A new global lithium ion economy is being created” – Benchmark’s Simon Moores US Senate testimony transcript

On Wednesday 24 June 2020, Benchmark’s Managing Director, Simon Moores, was invited as an expert witness to testify to the US Senate Energy and Natural Resources Committee led by Senator Lisa Murkowski (R-Alaska) and Senator Joe Manchin (D-West Virginia).
Here is the full transcript of the opening spoken statement.

Senator Murkowski, Senator Manchin and members of the committee I thank you for inviting me to this hearing today.

China is building the equivalent of one battery megafactory a week, the United States one every four months.

This is my third time presenting to the Senate on behalf of Benchmark Mineral Intelligence in two and a half years.

In that time, we have witnessed a global battery arms race and watched the world’s number of supersized battery plants – known as battery megafactories or gigafactories – go from 17 to 142.

Since 2017: China’s battery megafactory pipeline has increased from 9 to 107, of which 53 are now active and in production

Meanwhile, the United States has gone from 3 to 9 plants of which still only 3 are active, the same number as just under three years ago.

Lithium ion batteries are a core platform technology for the 21st century.

They allow our energy to be stored on a widespread basis in electric vehicles and energy storage systems, and they spark the demand for the critical raw materials and chemicals.

A new global lithium ion economy is being created.

Yet, any ambitions for the United States to be a leader in this lithium ion economy continue to only creep forward and be outstripped by China and Europe.

So I repeat this fact: China is building the equivalent of one battery megafactory a week, the USA one every four months.

This rise of the battery megafactories will require demand for raw materials to increase significantly.

By 2029, demand for nickel will double, cobalt to grow by 3 times, flake graphite and manganese by four times, and lithium by more than six times.

The tectonic plates of the industry have shifted.

Layered on top of this are new, emerging demands of supply chain security, transparency and accountability.

Not only has the COVID-19 crisis exposed the weakness of truly global supply chains and the need to build domestically, it has continued to shine a spotlight on how these raw materials are extracted around the world.

In the United States, progress is far too slow on building out a domestic lithium ion economy, but the opportunities that remain are vast and pioneers have emerged.

Tesla has continued to lead the industry and build on its Nevada Gigafactory by announcing super-sized battery plants in Germany and China and is expected to announce a fourth in Texas – which would give the United States first ever 100% owned and made lithium ion batteries.

Ohio has recognised the scale of this opportunity and attracted $2.3B from the General Motors / LG Chem joint venture.

You can also turn to Alabama, Georgia and Tennessee for electric vehicle and battery cell investment success.

Yet most of these developments are more stand-alone achievements than a coherent US plan, and all rely on imported raw materials and chemicals for the two main components that make a lithium ion battery: the cathodes and anodes.

America has some of the best cathode know-how in the business, yet only three cathode plants producing under 1% of global output.

While China produces over two third of global supply from over 100 cathode facilities.

It’s reassuring to see Umicore here today and actually have one of the true leaders in the industry step forward to talk about these issues.

For graphite anode, the United States has zero manufacturing plants while China has 48 plants and controls 84% of total global anode supply.

Developing this mid-stream of the supply chain will create a domestic ecosystem, an engine for more battery plants to be built, more electric vehicles to be made, more energy storage systems to be installed, and will spark the development of domestic mining and chemical processing.

However, be under no illusions that the United States needs to build this 21st century heavy industry from scratch.

FDR’s New Deal, for example, built core infrastructure that the United States still relies on today.

Nearly 100 years on similar economic and industrial circumstances, your country has to do this all over again.

Yet instead of dams, you need to build battery megafactories in their multiples.

Instead of highways, bridges and tunnels, you need to build the supply chains to enable these megafactories to operate securely and consistently. These include the cathode and anode plants AND the lithium, cobalt, graphite, nickel and manganese sources to feed them.

And this has to be done at a speed, scale and quality that will make most of US corporations uncomfortable.

Even more, these supply chains need to be underpinned by Giga sized battery recycling facilities to match the scale of these new operations and close the loop.

One can also look to the creation of a widespread US semiconductor industry starting in the 1980s.

The lead that the United States built in semiconductors and computing power has sustained your country’s dominance in this space for over five decades.

Those who invest in battery capacity and supply chains today will hold the sway of industrial power for generations to come.

I would like to thank Senator Murkowski who’s leadership on this subject over the years has been crucial and relentless. The industry is listening.”

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