Critical Mineral Supply Chains - Eclipse

Critical Mineral
Supply Chains
Contact: ryan@eclipse.vc

Contents Background
Processing
Recycling
Future Topics
Extraction
Synthetic Production
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Discovery
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Horizontal Platforms
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Critical minerals and their end-applications
Global industrialization is driving demand for minerals across the board. The largest surges of
demand are driven by the electrified transport and energy sectors.
https://www.igme.es/boletin/2019/130_1/BGM_130-1_Art-10.pdf
Critical Minerals is a general category defined by various agencies (USGS) or groups (IEA). The Energy Act of
2020 defines a “critical mineral” as a non-fuel mineral or mineral material essential to the economic or
national security of the U.S. and which has a supply chain vulnerable to disruption
https://www.usgs.gov/news/national-news-release/us-geological-survey-releases-2022-list-critical-minerals
Critical Mineral Supply Chains

Future demand outstrips supply across the global supply chain in many scenarios
https://www.sciencedirect.com/science/article/pii/S0921344919305750

We're severely offshored, and the race is on
to secure domestic supply chains
The United States is 100-percent dependent on imports
for 21 critical mineral commodities and is at least 50
percent dependent on imports for another 28 critical
mineral commodities (Lederer and McCullough, 2018).
Public sector action is at an all-time high
Inflation Reduction Act
Provides a 10% PTC for advanced manufacturing of critical
minerals processing and other battery components.
Page 386 of the act specifies the minimum thresholds of minerals
contained in US-manufactured EV batteries to qualify for the tax
credit. After passage of the act, at least 40% of critical minerals in
US-made EV batteries must come US miners or recycling plants,
or mines in countries with free trade deals with the US.
By 2029, 100% of battery and 80% of materials will need to come
from North America or NAFTA countries – this is an area of
concern for many manufacturers.
Bipartisan Infrastructure Law
For the next five years, the Bipartisan Infrastructure Law will stand
up 60 new DOE programs, including 16 demonstration and 32
deployment programs, and expands funding for 12 existing
Research, Development, Demonstration, and Deployment
(RDD&D) programs.
$2.8 Billion to Supercharge U.S. Manufacturing of Batteries for
Electric Vehicles and Electric Grid

The private sector demand for resiliant
critical mineral supply chains is immense
https://piedmontlithium.com/wp-content/uploads/220309-Piedmont-Expands-LiOH-Plans-to-60k-with-Second-LiOH-Plant-USA-FINAL-1.pdf

Discovery
Opportunity Landscape/Framework
Extraction
Engineered
Materials
End
Applications
Processing
Platforms
Downstream
Synthetic Production
Recycling

Background
Securing upstream supply of minerals deeply relies on high quality discovery and geological knowledge. Current spend and private/public prioritization.
The United States is 100-percent dependent on imports for 21 critical
mineral commodities and is at least 50-percent dependent on imports for
another 28 critical mineral commodities (Lederer and McCullough, 2018).
~$350M for USGS
EarthMRI

Major mine discoveries are on the
downtrend for critical minerals like copper
and nickel. In order to satisfy the growing
demand for new materials, we need to
discover more sources. The value of
accurate deposit information seems to be at
an all-time high.
Discovery is challenging and the low hanging fruit is "plucked"
https://abmec.org.uk/wp-content/uploads/2021/03/2021-03-15-World-Exploration-Trends-2021.pdf

Discovery is seemingly underperforming

Fundamental Metric:
Spend on Discovery
Value of Extraction
Location Targeting
Drilling and core analysis
https://ideon.ai/
Also Important:
Time-to-Discovery
https://www.bedrockocean.com https://mirageoscience.com/case-study-ai-mineral-exploration/

Critical Mineral
Processing
Lithium Hydroxide
Li
O
H

Lithium Hydroxide
Cost: While both lithium carbonate and lithium hydroxide are used in LIB cell manufacturing, the former has
been used predominantly because of the higher cost of producing lithium hydroxide.
Performance: Superior physical properties, such as higher tap and packing density, can be achieved at lower
synthesis temperatures for nickel-rich NCM materials when using lithium hydroxide as the lithium precursor
[source]
Uses: Cathode material. LCO, LFP and preferred over Carbonate for NMC as a lithium precursor
(LiOH)
(Li2CO3)
~%3.7 Li
Other Ores
besides
Spodumene
LFP, NMC, LCO...

Domestic demand for lithium hydroxide
https://piedmontlithium.com/wp-content/uploads/220309-Piedmont-Expands-LiOH-Plans-to-60k-with-Second-LiOH-Plant-USA-FINAL-1.pdf
Price estimate of ~$25k/t
~$13B/yr in 2025+

Supply/Demand Balance
https://www.sec.gov/Archives/edgar/data/1728205/000172820520000018/ex99_1.htm Critical Mineral Supply Chains

Recent Tailwinds from US Government
https://www.energy.gov/bil/battery-materials-processing-grants

Today's Cost Benchmarks
Hydroxide: Piedmont Lithium Project ->
$10k/t production cost
Lithium Carbonate and Hydroxide
Carbonate: $4k/t to $5.5k/t
https://www.sec.gov/Archives/edgar/data/1728205/000172820520000018/ex99_1.htm
https://www.statista.com/statistics/1081022/battery-grade-lithium-carbonate-production-cost-by-feedstock/

Basic technical background on current processes
Outotec
Piedmont Lithium

Critical Mineral
Processing + Production
Graphite

Current and projected uses for graphite

Critical Mineral
Processing
We are excited about many other
mineral processing stages. This section
will continue to expand over time.

Battery Recycling: Market
Today's market is small (2B globally); growth is impressive
Despite this, we likely need to enter market soon to be in a position to
participate once the market has grown
EU and China have instituted regulatory mandates on extended producer
responsibility, and US is expected to follow suit
OEMs are looking to de-risk future supply by locking up multi-year
agreements today
The demand for battery-grade materials globally is exceptionally strong, and
we believe that the end market for these materials will be a seller's market.
Recovery of critical minerals from end-of-life batteries will be a huge value
capture stream.
Background
Trends and Tailwinds:
https://www.umicore.com/storage/group/kurt-vandeputte-mobility-transformation-capture-profitable-growth-in-circular-battery-value-chain-with-battery-recycling-solutions.pdf

Battery Recycling: How it Works

Battery Recycling Landscape

Collections and disassembly of EV batteries is extremely fragmented
and manual process today. Most of this cost is driven by
transportation of hazardous materials. Driving this cost down (via
acting as a collections and disassembly hub) would increase the
value in recycling. There is additional upside in automating the
disassembly.
Battery Recycling: Collections & Disassembly
Opportunity
Battery EOL market* in North America + Europe is 239M
in 2025, expected to hit 1B in 2030, 16B in 2040.
Collections is expected to only capture small % of market
US market only is not very attractive, unless you also
consider manufacturing scrap
*price of raw materials today
Market Sizing
Our position:
We're generally not excited about a pure-collections play. We
expect many companies doing recycling may need to run their
own collections in order to secure black mass supply.

Most commercial-scale recycling facilities still use pyrometallurgical processes
today, which have high energy costs and have an overall efficiency of 50%
recovery. Though there is strong competition, the race is on to create a commercial-
scale processes with high-value capture.
Battery Recycling: Novel Recycling Processes
Opportunity
Global battery cathode market (minus China) is 1.6B in 2022, expected
to grow to 2.9B by 2030. North America only is expected to be a 311M
market in 2030.
This may be a conservative size assuming 10% manufacturing scrap,
even though industry experts suggest 30-40% waste rates today
Market Sizing
Purity of recovered material
Gross margins of processing
Economies of scale for technology
Metrics that Matter https://www.sciencedirect.com/science/article/pii/S2589004221007550
Our position:
Direct recycling methods with clear, manageable
engineering hurdles to step-function economics
are the companies to bet on here.

Extraction
Section Update in Q4 2022. There are so many exciting opportunities in this space, from DLE,
subsea, and other minerals that deserve attention.

Synthetic
Production
Section Update in Q4 2022. Novel high performance material synthesis and beyond..

https://iea.blob.core.windows.net/assets/961cfc6c-6a8c-42bb-a3ef-57f3657b7aca/GlobalSupplyChainsofEVBatteries.pdf
Minerals Needed
Chart excludes copper, aluminum, graphite,
graphene and silicon
Where they come from
Processing of critical minerals dominated by
China and other countries. 0 Domestic Supply

https://iea.blob.core.windows.net/assets/961cfc6c-6a8c-42bb-a3ef-57f3657b7aca/GlobalSupplyChainsofEVBatteries.pdf

USA + EU Supply Chain Dependence

High level comparison and opportunity
https://www.nature.com/articles/s41586-019-1682-5
https://www.sciencedirect.com/science/article/pii/S2589004221007550

Basic tech primer: processing techniques
Pyrometallurgical
https://www.chemistryworld.com/features/the-drive-to-recycle-lithium-ion-batteries/4012222.article

Critical Mineral Supply Chains - Eclipse

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