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 thank you I'm Priscilla Herrera with the invest in this network and here with me today is Casper walls whose Chief data officer at Benchmark mineral intelligence to begin I wanted to ask you about your current forecast for cell Supply in 2023 which you've said will reach one terawatt hour for the first time could you maybe briefly give some context on what is driving demand and how the market could grow in the next decade yeah so this is the first terrible hour yield that we're expecting to see on both supply and

demand in in lithium-ion battery supply chain uh the obviously still the main driver of the market at the moment is demand from the EV industry the growing EV industry um cathode chemistry is within that are changing but you know outright demand in terms of Google hours or terrible hours uh continues to grow very quickly so we're seeing you know continuing to see a shift towards higher nickel chemistries on the nickel Bay Side and more and more lfp but yeah EV demand continues to be strong and I think if

you look at you know just take China for an example uh where people have spoken about actually quite weaky EV sales in the first part of the year compared to 2022 the numbers are still up I think about 20 year over year um in January and February this year compared to the year before um so yeah demand growth is is still very robust and sales are still looking strong I guess kind of the the only kind of headwind to that at the moment is kind of the broader macro economic Outlook um which would be uh you know kind of

facing more of a Global recession linked to inflation and interest rates so perhaps that may slow things a bit more than forecasted later in the year but at the moment it's still yeah all guns blazing for 2023. and when you look forward for your outlet for for the next few years I was also wondering how will energy storage the energy storage Market will playable in demand um for this yeah absolutely so energy storage is a is actually the fastest growing sector within kind of the lithium-ioned markets

um it's just starting from a much smaller base compared to EVS so so it's growing very quickly but obviously it's not having the impact on outright demand so yeah we expect the ESS Market which last year here was just around 60 gigawatt hours to rise to um over 300 gigawatt hours by by the end of the decade um and then on the kind of EV side to put that into perspective last year we saw uh demand from the EV sector around uh 500 gigawatt hours uh just over 500 gigawatts hours and that's increasing to well just under

three terrible hours so 3 000 gigawatt hours by the end of the decade we were recently at the battery gigafactories Europe event um in Budapest so just wanted to get your thoughts on Europe's position in this market um will the region grow its production capacity and how does it compare uh to China or North America in terms of how much it is growing going forward yeah so yeah up until I would say uh around July August last year where the inflation reduction X was was announced by the US government we always referred

to Europe as the second Global battery Hub so you know outside of of China Europe was the kind of region that was seeing the most growth the most investment and fundamentally was expected to have the largest cell production capacity going forward um that is still the case in our right numbers but the US and uh in particular as a result of the policies put in place in the by the inflation reduction act has started to close that Gap so over the period since the announcement of of the policies um we've seen cell capacity forecasts to

2030 for Europe increased by about 18 or 19 and in that same period sale capacity forecasts for the US have increased or sorry for North America have increased by just over 60 so there's a big difference there was that we've seen uh large-scale Investments um uh and and let's say uh enlarged scale so more capacity than expected in those Investments be announced by by battery companies across the world now of the global battery producer should I say now Europe Still Remains at the Forefront we still see kind of Europe

and and North America as there's the place is second only to to China in terms of battery production but when we look forward um if we if we look at kind of the the breakdown of capacity globally even into the early 2030s China's expected to represent about 60 to 65 percent of capacity whilst Europe and North America are both around kind of 15 maybe slightly more percent of global capacity so um whilst they are growing very rapidly and the quality of producers that are expected in in Europe are largely going

to be the tier one sale manufacturers who are supplying supplying the global EV market today um it's not growing uh at a rate which would uh kind of topple China as the biggest production hub so uh the whole geopolitics have have taken a more prominent role this year and definitely policy seems to be shaping this lithium uh supply chain bailout how this might be a difficult question to to answer but how do you think China will react to all these policy changes in in the US and Europe and how much of an

impact is having um the U.S policy in Europe itself yeah so I'll I'll answer the second piece first because I think the first one is probably harder till once a bit yeah as a result of the inflation reduction act in in the US Europe has had to respond um so it's started to announce more stringent policies around kind of raw material uh sourcing for EVS or products that are going to be sold within Europe so a higher percentage of battery chemicals will need to be refined in Europe as well as mind in Europe or that

was than was previously mandated but to date so far the policies haven't gone as far and haven't offered the incentives in terms of financial incentives uh essentially that the U.S policies have uh have gone to do um you know there's probably going to be a lot more on this I think those policies are going to continue to evolve over time you know there's rumors of a kind of uh partnership between Europe and North America in terms of trade of uh battery minerals and sort of pre-trade agreements specifically just

around kind of battery minerals and the battery supply chain which if that comes into place it may impact how those policies work but what we're seeing is um yeah a ratcheting of of activity on the policy side within Europe to try and ensure that Investments don't get moved over to the US instead of Europe in terms of the building out the supply chain I would I would add though I think that what we're seeing is that this is not an either or situation so I think because the supply chains need to be built out

on a global basis you know they will regardless there will still be capacity in Europe and North America that's being built but what we have seen is that the the the near-term incentive where do we invest first and those policies have push some of those Investments towards North America and then on the second second part of your question regarding China I think China you know has always kind of crafted its own policies for for the internal Market in many cases um you know he I guess you know China is

still very much the leader across the battery value chain across uh particularly across kind of um intermediate refining or chemical refining um cathode anode and cell manufacturing um so you know it's it doesn't really have a it's not in the same position as we've seen kind of North America Europe in the sense that it wasn't this not dependent on any other region to be able to supply its own Lithium-ion batteries China is also locked up a lot of the resources whether that's you know

obviously produced what they producing what they can domestically but also via investments in overseas mining operations so you know it's hard to say if there'll be any kind of reactionary policy from China um but you know of course that's a possibility in the future all right so I obviously wanted to touch on mining and the Upstream where what else do you think that Europe could do to to support the their own mining industry um going forward when it comes to to critical raw materials

yeah I mean there's you know one of the things that was announced was more exploration of what we have so I think you know Europe's not known to be a particularly large kind of mining region if you think about places like Canada or Australia you know they have much more kind of mining Heritage as countries there and within Europe we don't see as much of that so um naturally there hasn't been the same degree of exploration that there perhaps has been in other regions so that's a

big thing to really just understand what we have but I think you know the major blocker and you hear this across both uh European countries and in in North America particularly the us as well uh is uh permitting particularly around environment it's all permitting but just permitting generally four new minds is a very lengthy and expensive process which obviously you know any delay when we're thinking about trying to get these resources up and running as quickly as possible we want to avoid so if there

can be some streamlining of Permitting that's great and also just kind of really doing more to understand what we have have um it's a difficult one obviously because uh mining is is quite political topic and I think um you know that can create some barriers around being able to be completely free and and you know speed things up as much as possible but what can be done and I think I think will help um but as with anything even with you know full government support bringing Minds into production is is a

slow process and it's going to take you know many more years to to build out those minds and it will the refining capacity to to convert into media production other mines into battery chemicals all right and and staying on the topic of Mining and supply of raw materials uh what I wanted to ask you is um for the battery plans that are being built out in Europe are you still seeing nickel based chemistries as as the main choice and do you see that changing in the next decade yeah so at the moment the current plans

in Europe are very limited in terms of um anything other than than nickel-based chemistries to be to be honest you know much of the the vast majority of the capacity is focused around NCM or or in some cases a small amount of NCAA um cells or cathode chemistry used in the cells um and um yeah that's I you know I do anticipate that will change over time we've seen commitment from automakers in terms of um moving towards lfp particularly for smaller segment vehicles but at the moment you know the plants that have

been built out and the companies that are there um have uh companies which are largely focused around nickel-based chemistries so um that that will change but I think at the moment um we're looking at a very small percentage of of lfp chemistries in the mix there will be some kind of higher manganese chemistries as well but you know those some of those contain nickel as well so um yeah we kind of yet to be it's yet to see who will be the main players that that move away from nickel based in

Europe but um for sure they'll that will come over time and I think there's an acknowledgment that uh Europe won't be able to be self-sufficient when it comes to to supplying the raw materials that these battery plants uh will need um for example we know that for leaking mining that is it's close to to non-existent in the region right now could you maybe explain to our audience uh where their region is currently sourcing its its raw materials from and if you expect that to shift in the next

decade yeah so though I mean kind of the let's the cathode or the battery chemicals that are going into cells that are being produced within Europe right now is largely coming via China of course being processed in China whether that's um whether that's cathode material or um or anode um there you know that's coming as I say by China in some cases you know maybe pecan that's Sent to Japan or Korea and then sent to Europe to go into sales but in terms of the raw materials um yeah I mean it's pretty globally

Diversified um you know the usual places I mean Cobalt typically is going to be coming from the DRC um lithium from from South America or from Australia but um yeah much of the kind of Supply that's going into the active supply chain that exists within Europe today is coming by China there's a there's a few a handful of operations that processing chemicals but um it's a relatively small percentage um and much of it as I say is still coming from that Chinese supply chain you know I will normally ask you about

maybe lithium prices falling or or what's been happening in the Kobo Market uh today but I actually wanted to to touch on manganese and I may be staying on this um this topic of China I just wanted to to get your thoughts on how challenging is it going to be to set up um you know High Purity manganese Supply Market outside of that country going forward yeah well I mean yeah manganese is was one of the topics that we were discussing at conference um and it's one of the battery raw materials which is is very heavy heavily

dependent upon China um kind of of the battery grade manganese I think something like 94 or 96 is is produced in China um the rests uh kind of globally Diversified but you know it's really a question of cost I mean setting up these operations is uh is somewhat technically challenging but you know it's not impossible um but it's being able to do it on a cost competitive basis with China which today has been has been a challenge um so I think you know there's gonna be uh should there be more operations that

are bought online whether that's in Europe or you know any other region and there will be probably a shift in the cost curve which will mean that manganese is a slightly more expensive product um but it's yeah it really comes down to cost and being able to compete with China in terms of getting to a battery grade manganese sulfate um for fundamentally the same price as as you see from Chinese domestic suppliers and my last question for you today um obviously our audience is mostly focused on on the mining side of the

supply chain but we know that for these critical raw materials the processing is is also key if there's something the investors that are listening today should understand about the Midstream of the supply chain of the processing of all these materials what would that be um yeah good question so I guess the the obvious one would be um you can't operate your Midstream refining without raw material supply so make sure that those companies that are planning to do that have access to battery raw materials

um and you know in the case of lithium for example that actually that's where a lot of the challenge lies is is producing a battery grade chemical um you know lithium is a relatively abundant mineral in in you know particularly in the terms of of brine or spodium from Australia you know getting it out the ground isn't particularly challenging but taking the that lithium molecule that element and converting it to um a battery grade chemical is really where the challenge lies so um you really need experienced operators

who could who have done it before and know how to get to that high quality consistently as well so you know it's you your product needs to be very high grade and consistently stay at that high level um yeah the key thing is making sure that there's access to raw materials and then and then um experience particularly in lithium chemicals and getting to that battery grade all right Casper thank you so much thank you persona [Music]