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

Tesla mentioned the plant can be centered on the event of “battery-grade lithium hydroxide” and be “the primary of its sort in North America,” in response to a newly launched letter to the Texas Comptroller’s Workplace.

The corporate would course of “uncooked ore materials right into a usable state for battery manufacturing” then ship the lithium hydroxide to varied Tesla battery manufacturing factories, the applying mentioned.

In April, Tesla CEO Elon Musk mentioned the corporate could must get into lithium refining as a result of the price of the steel had “gone to insane ranges.”

The worth of lithium is up 120% this yr, in response to an monitoring index from Benchmark Mineral Intelligence.

Tesla’s transfer can be doubtless a bid to diversify the availability of its lithium and battery manufacturing. China controls greater than half of the world’s lithium processing and refining, and the USA simply 1%.

As a part of the applying to Texas, the corporate mentioned it’s also contemplating “different battery supplies processing, refining and manufacturing and ancillary manufacturing operations in assist of Tesla’s sustainable product line.”

If Tesla’s utility is authorised, development might start within the fourth quarter of 2022, the corporate mentioned. The venture will attain “industrial operations” by the fourth quarter of 2024.

Tesla mentioned that it’s nonetheless “evaluating the feasibility of this venture” and “solely very preliminary growth actions have begun.”

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

Musk’s agency mentioned the venture could possibly be situated “wherever with entry to the Gulf Coast transport channel.” Tesla mentioned it’s evaluating a competing website in Louisiana.

Tesla mentioned the one method this venture can be viable is that if Texas provides it tax breaks below its regulation.

“Within the case of the funding on this proposed venture in Texas, the choice can be primarily based on quite a lot of industrial and monetary issues, together with the flexibility to acquire reduction relating to native property taxes,” in response to the applying.

Lithium is a essential steel for batteries that go into every part from electrical automobiles from smartphones. Given the strategic significance of such uncommon earth metals and China’s mining dominance of them, there was concern from Washington that Beijing might minimize off essential provides of lithium and different supplies.

The U.S. is trying to ramp up its personal uncommon earth refining and mining trade to meet up with China.

This is the letter: