The Future's Most Essential Ingredient: "Pure Carbon"
The #1 Ingredient in Lithium-Ion Batteries Isn’t Lithium…
As Elon Musk said recently: [there’s] a little bit of lithium in there, but it’s like the salt on the salad.”
Only 2% of a lithium-ion battery is actually lithium… and by contrast, more than 80% of the battery is made from this one rare resource — a material I call “Pure Carbon.”
The battery manufacturing process eats up a good portion of this Pure Carbon, which is one of the reasons why you need more Pure Carbon than anything else.
Elon Musk knows this all too well, since the battery factory that Tesla is building in the Nevada desert will soon become one of the largest consumers of Pure Carbon on the planet.
When it comes fully online, Tesla’s Gigafactory will produce more batteries in a year than were produced in the entire world just five years earlier.
These batteries already power the 1,235,000 electric cars on the road today…
And they’ll power the millions more vehicles expected to be on the road by 2020.
Currently there are only 85,000 tons of Pure Carbon produced in a year — and the Gigafactory is expected to consume 115,000 tons a year all by itself.
But it’s not just Apple and Tesla who need Pure Carbon.
Here are a few of the other companies scrambling to secure their piece of the $41 billion lithium-ion battery market…
And $41 billion is just the beginning.
In the last 18 months an additional $20 billion of funding has flooded into the market.
According to Benchmark Minerals, one of the foremost authorities in this sector of the raw materials industry, demand “is set to increase by over 200%” at the outset.
Additional estimates show it tripling, hitting at least 400% by 2020.
These numbers explain why even Warren Buffett is buying in.
He recently bought a 10% stake in a company with some of the world’s largest supply contracts for this resource.
But here’s the kicker…
The U.S. Doesn’t Produce a Single Ounce…
Unfortunately, as vast as America’s natural resources are, there’s only the lightest sprinkling of this vital resource throughout our hills and mountains.
And exactly none of it is easy or cheap to retrieve.
That’s why America is stuck importing 100% of what we use.
In fact, except for a handful of viable deposits in Canada and Mexico, there isn’t any in all of North America…
This is a giant problem.
Because every single new technology America develops — electric cars, laptops and cell phones, solar panels and submarines — has to source this essential ingredient from China.
The UK, Europe, Japan, and South Korea are all in the same boat.
The entire world is forced to buy from China.
That is, until now.
One Flip of the Switch Is About to Change It All...
As you can see for yourself...
There’s almost nothing on this map — it’s wide open.
There’s a small dot on Brazil, a big dot in China, and a few small dots in between...
And if you look closely, a small dot up in Sweden.
This small dot in Sweden is the Pure Carbon mine and brand-new refinement facility of a small mining stock I've been watching.
And it’s about time…
Up until two years ago, there hadn’t been a new non-Chinese mine since the 1980s!
This mine produces carbon graphite with a purity level so high that it comes right out of the ground in flakes that are at 95% purity or higher.
You can see it right here…
Normal carbon deposits are already rare, but this kind of quality is nearly off the charts.
If you gathered up all of the known flake carbon in the world and piled it into one place, it would only fill a single city block — down to a depth of about a hundred feet.
These high-quality flakes fetch prices that are 300% more than lower grades of regular carbon.
Up until a few years ago, these flakes were the highest level of quality available.
But new technologies are demanding a new, premium level of quality.
The lithium-ion batteries used in electric cars, submarines, laptops, and cell phones work best when they have “battery-grade” carbon graphite — a level of quality that was once thought impossible.
Here’s how new technology makes this process into a reality…
Medium, large, and jumbo graphite flakes are put through a brand-new refining process that raises the purity bar even higher.
The final result of the refining process are these tiny little spheres with 99.9% purity.
Pure Carbon is the #1 ingredient in the lithium-ion batteries that power all of today’s (and tomorrow’s) technologies.
Activist investor Carl Icahn — famous for his ability to spot important megatrends — has spent the last two years pushing companies toward Pure Carbon technology.
With $3.6 billion of his own money on the line in Apple stock, Icahn wrote the following in an open letter to Apple:
“The lithium-ion battery already represents a critical component across many of Apple’s existing products (iPhone, iPad, Apple Watch, MacBook, Beats) and any further innovation could be a ‘game changer’ in terms of both battery life and form factor across Apple’s entire ecosystem.”
Pure Carbon is the “innovation” he’s talking about.
It’s literally the stuff that advanced technologies are made of.
It’s so pure that it’s even being used in the latest nuclear power plants.
It’s being used in U.S. military warships, in U.S. spy planes, and in the battery backups for the NSA’s most sensitive servers.
Which is why the company's mine in Sweden was designed from the ground up to meet America’s essential needs.
It opened this mine in 2014 and it's spent the last few years streamlining its production.
It's sampled all the sites of the mine and mapped out its extraction strategy.
Independent experts have tested all of its carbon flakes and verified that they’re 95% pure — the “gold standard” for the industry.
And now the company is taking its operation one giant step further…
It's built a state-of-the-art refining facility that will process these carbon flakes until they’re little spheres of Pure Carbon with 99.9% purity.
And it is about to flip the switch and start production…
I think this could be one of the most exciting mining and resource investment of 2017. So stay tuned for more details on Pure Carbon.
Call it like you see it,
Nick is the Founder and President of the Outsider Club, and the Investment Director of the thousands-strong stock advisory, Early Advantage. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.