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Tesla Enters the Mining Business

Written By Alex Koyfman

Posted November 1, 2022

Dear Reader,

Yesterday, news came across the wires that Tesla (NASDAQ: TSLA) was talking over the possibility of purchasing an up to 20% stake in the $75 billion Swiss-based commodities giant Glencore PLC (LSE: GLEN).

Not a life-altering sum for the world's biggest carmaker by market capitalization, but nevertheless a clear and direct indication of a drive to become raw-material independent.

Glencore is heavily involved in the production of other "technology metals" — crucial in the production of everything from electric motors to computer chips.  

Among these are copper, nickel, and cobalt, all critical ingredients needed to manufacture batteries, electric cars, and every other core technology toward which the future of advanced civilization is currently heading.

What it doesn't mine, however, is the key precursor to the modern rechargeable battery: lithium.

The question is: if Musk and the rest of Tesla's brain trust are so keen on owning critical links in their supply chain, why wouldn't they also opt to scoop up a major lithium producer while they were at it.

Lithium is, after all, one of the major economic choke points in the creation of a fully electrified society — with EVs representing a massive slice of the wattage that will be necessary to run the world of tomorrow.

Tesla has the cash to easily become one of the biggest players in the game, if not the biggest.

And yet… virtually no mention of in-house production capacity.

Why Isn't Elon the World's Biggest Lithium Producer?

Now, don't get me wrong, Elon Musk has demonstrated, at least token interest in the mining field as recently as 2020, when he announced that the company has acquired the rights to lithium-clay-rich deposits in the western United States.

But when it comes to the grand gestures he's known for, this simply falls too short.

I believe there's a reason for this: Tesla simply isn't interested in taking a major stake in the lithium field because the company knows that lithium, the current global benchmark when it comes to cathode manufacture, isn't going to remain the standard forever.

It may have ushered in the EV era, but it's not going to rule it forever, just as coal didn't rule the era of mechanization.

Look at it from that perspective and it all makes sense.

But it only makes sense if Tesla management is also aware of, and making preparations for, lithium's replacement.

Bear in mind, this replacement can't just be a substitute with similar properties. It would have to be a marked improvement with major advancements on all fronts, from storage capacity, to charge speed, to service life, to one of today's most relevant factors: supply chain stability.

Right now there is one material that fits all the conditions listed above: graphene.

If you haven't heard of it, the facts are nothing short of stunning. Graphene is what's called a nanostructure, meaning it's engineered on a molecular level.

Lithium Is the Coal of the EV World… This Is the Jet Fuel

It's 200 times stronger than steel yet light as a feather. It's one of the world's greatest conductors of electricity and the most efficient conductor or heat known to man — which is specifically relevant to its application as a cathode material.

Make an EV battery pack out of graphene cathode cells and the results are no less stunning: Twice the range, three times the service life, and 70 times faster charge speed.

That's fast enough to make EV charging quicker than fueling a traditional ICE at the pump.

Knowing that there's a product out there with these properties, you can see why a forward-thinking company — led by a guy who virtually made his reputation by seeing ahead of the current market — might not be so interested in producing lithium in-house.

Perhaps the most important aspect to graphene batteries is that where once graphene was simply too expensive to produce to be feasible for any mass commercial applications, today there is a new process that can make cheap, highly moldable graphene from nothing more than natural gas and electricity.

This process is as important, if not more important, than the batteries themselves, and this is precisely where a slight hang-up comes into play.

The Best Bargain on Wall Street?

You see, both the battery technology and the groundbreaking new production method belong to a small materials science company based in Brisbane, Australia.

It's relatively tiny, just around USD$200 million total market capitalization — less than 1/3,000th the size of Tesla.

Yet this company holds the potential to virtually wipe out the lithium-ion battery market.

If you don't think that Elon Musk isn't following the next-gen battery market with a microscope, you'd be mistaken. It's literally the future of his single biggest portfolio position — the biggest single portfolio position in the world, for that matter.

At $200 million, it could be the biggest bargain anywhere on Wall Street (it's already trading publicly on two exchanges, in the U.S. and Canada), but it won't stay that way for long.

You can buy shares of this graphene-maker directly from your online brokerage platform, but before you do, you need to get the full detailed report on the company, the tech, and the world-changing solution.

Check out our informational video right here.

Fortune favors the bold,

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Alex Koyfman

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His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Wealth Daily. To learn more about Alex, click here.