Tesla Inc. is devising a plan to build a lithium refinery on the gulf coast of Texas, the first-of-its-kind set up in North America.
According to Bloomberg News, the electric car maker informed the government that it was planning to construct a refining facility to produce battery-grade lithium hydroxide. The facility will be located in Nueces County according to the new application from the public for filings for tax breaks at the Texas Comptroller Office.
Tesla informed the state that the facility would process raw ore materials and convert them into usable conditions for battery production. The lithium hydroxide produced will be packaged and shipped to different battery manufacturing factories of Tesla by rail and ship. This will also help to support the supply chain for electric vehicle batteries on a large scale.
The company also said it would use innovatively designed processes compared to conventional methods, produce less hazardous chemical substances and create valuable by-products.
Construction of the facility can begin by the end of Qtr. 4 in 2022. However, commercial production can happen only in the fourth quarter of 2024. Tesla informed that state that the facility could be located near the gulf coast. The company is also exploring another channel at a site in Louisiana.
Buried Treasure
Elon Musk, CEO of Tesla, spent plenty of time last a year advocating for rapid lithium mining in North America. He compared opportunities here similar to the huge margins in the software industry. He urged entrepreneurs to enter the lithium mining industry. In an earnings call in July for Tesla, Musk said that while mining was easy, refining was harder. He said there was nothing to lose, and this segment was a license to print money.
Similar projects for setting up plants in other countries, including developments in Australia and Germany, are underway. The production of the first refinery started early this year in these two countries. Albemarle Corp., a top lithium producer in the world, is planning to create a new facility at a Southeast US site.
China dominates lithium refining and possesses more than half of the global capacity. It processes the raw material harvested in salt-rich underground or mines and converts them into specialty chemicals used in EV batteries.
A lithium mining plant will be another new addition to Musk’s expanding empire in Texas. Apart from the Tesla car manufacturing facility in Austin that started production this year, Musk also set up a rocket prototyping and launching facility in Boca Chica. Boring Company, a tunneling firm of Musk, is also executing various projects across Texas.
Tesla has applied for licenses to make battery materials besides its Austin car factory. However, the present status of this project is unknown.
