What if we were in the midst of an infrastructure boom, and there wasn’t a single steel producer left in America?
To make matters worse, what little was out there for sale came from just a couple sources, and the vast majority of iron mines out there couldn’t produce the high quality ore needed.
It sounds absurd, but something like this has happened before in just about every way imaginable. Since the dawn of the humanity, every technology has something absolutely essential to make it work, and there was a time when there wasn’t enough of that to go around.
That is exactly the kind of situation that the 21st century’s new and emerging technologies are facing right now.
From U.S. military hardware, to power grids, down to the cars we drive and the phones in our pockets, a critical resource for 21st century energy is seeing demand soar, and supply can’t keep pace.
And the U.S.A. produces none of it. We have to buy it all from China.
Pure Carbon: The #1 Ingredient
What we’re talking about is energy storage on ever smaller, denser scales. The changes are already happening, but have a long way to go.
We have already seen an information paradigm shift, with most people having access to the world’s knowledge in their pocket.
It will allow the power grid to modernize, broadening renewable energy sources and reducing the cost of peak demand.
It’ll be in every electric and self-driving car going on the road worldwide, as energy distribution (think power stations and oil shipping), and even the roads themselves, evolve to the changes.
All of this is due to the ever-growing demand for portable energy storage, especially lithium ion batteries.
And, though many might not know it, the metal most in demand for them is carbon.
As Elon Musk said recently: “[there’s] a little bit of lithium in there, but it’s like the salt on the salad.”
Only 2% of a lithium-ion battery is actually lithium, while more than 80% of the battery is made from a particularly rare and hard to source form of pure carbon.
And in spite of the demand, there just isn’t enough to go around.
Going back to Elon Musk, the Gigafactory he has built through Tesla will produce more batteries in a year than were produced in the entire world just five years earlier.
Currently there are only 85,000 tonnes of the right kind of carbon produced in a year — and the Gigafactory is expected to consume 115,000 tonnes a year all by itself.
It Just Ain’t The Same…
Carbon is about as common as it gets, but it all depends on purity. Diamonds are an extreme example of this, but they aren’t alone.
Normal carbon in quantities worth extracting are rare. These days, most of it comes from China, and a new, non-Chinese mine hasn’t been built since the 1980s.
The vast majority of the production from these dated mines can’t keep up with the new demand for the ultra-pure “battery grade” carbon that is needed.
That leaves carbon-producing companies in a situation where they want to tap the purest deposits, then refine them until they are 99.9% pure.
And here comes the issue that compounds the purity problem further.
Getting the necessary permits and industry certifications for this kind of pure carbon refining facility requires an absurdly expensive four-stage approval process. One that consumes thousands of tons of raw carbon.
So even if another mine wanted to compete, it would take it months of time and hundreds of thousands of dollars just to dig up enough raw carbon to even begin the approval process.
The combination of a lack of mines and this high hurdle for permit approval is creating the resource bottleneck, and supply insecurity, forming right now. Simply put, this has to change, and it will.
One company in particular is poised to become the first new mine outside of China in decades, and it is the only publicly-traded company that is permit-ready.
Gerardo Del Real just released a detailed research report on the company for his Resource Stock Digest Premium readers. Check out the research that is putting him at the forefront of this trend.
