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Tesla evaluating lithium refinery in Texas for electric automobile batteries

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Elon Musk had previously suggested Tesla could get into lithium refining at scale because the associated fee of the metal, a key component in manufacturing batteries, has surged. If Tesla’s application in Texas is approved, construction on a lithium hydroxide refining facility could begin within the fourth quarter of 2022.

Christophe Gateau | Picture Alliance | Getty Images

Electric automobile giant Tesla is evaluating the feasibility of a lithium hydroxide refining facility on the gulf coast of Texas.

Tesla said the plant could be focused on the event of “battery-grade lithium hydroxide” and be “the primary of its kind in North America,” based on a newly released letter to the Texas Comptroller’s Office.

The corporate would process “raw ore material right into a usable state for battery production” then ship the lithium hydroxide to varied Tesla battery manufacturing factories, the applying said.

In April, Tesla CEO Elon Musk said the corporate may have to get into lithium refining because the associated fee of the metal had “gone to insane levels.”

The worth of lithium is up 120% this yr, based on an tracking index from Benchmark Mineral Intelligence.

Tesla’s move can also be likely a bid to diversify the availability of its lithium and battery production. China controls greater than half of the world’s lithium processing and refining, and the US just 1%.

As a part of the applying to Texas, the corporate said it is usually considering “other battery materials processing, refining and manufacturing and ancillary manufacturing operations in support of Tesla’s sustainable product line.”

If Tesla’s application is approved, construction could begin within the fourth quarter of 2022, the corporate said. The project will reach “industrial operations” by the fourth quarter of 2024.

Tesla said that it remains to be “evaluating the feasibility of this project” and “only very preliminary development activities have begun.”

No engineering, construction or procurement construction contracts have been negotiated or signed and no regulatory permits have been obtained, Tesla said.

Musk’s firm said the project could possibly be positioned “anywhere with access to the Gulf Coast shipping channel.” Tesla said it’s evaluating a competing site in Louisiana.

Tesla said the one way this project can be viable is that if Texas gives it tax breaks under its law.

“Within the case of the investment on this proposed project in Texas, the choice can be based on various industrial and financial considerations, including the power to acquire relief regarding local property taxes,” based on the applying.

Lithium is a critical metal for batteries that go into every thing from electric cars from smartphones. Given the strategic importance of such rare earth metals and China’s mining dominance of them, there was concern from Washington that Beijing could cut off critical supplies of lithium and other materials.

The U.S. is seeking to ramp up its own rare earth refining and mining industry to meet up with China.

Here’s the letter:

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