CHARGING UP
Tesla’s Elon Musk spurs mining of nickel sulphate,
It’s not enough that Elon Musk is spurring the global auto industry to rush into electric-vehicle (EV) development.
He recently prompted the world’s biggest mining company to commit $55 million to expand its output of nickel sulphate, a raw material in the lithium-ion batteries that power Musk’s Tesla cars. (All figures in Canadian dollars.)
Dictating the capital-allocation decisions of colossal enterprises, without so much as a tweet from Musk to BHP Billiton PLC asking it to overhaul an Australian nickel mine on the other side of the world from Musk’s Palo Alto, Calif.-based Tesla Inc. — now that’s power.
Merely reading that Musk had mused about a coming shortage in nickel sulphate was enough to convince BHP it was missing a business opportunity. Which it was.
The largely untold backstory of the EV revolution is batteries. Battery development will be one of the top 20 industries of the century, essential for the EVs to replace the roughly 90 million vehicles made each year that are still powered by traditional internal-combustion engines.
Battery demand will also grow with the boom in electric-powered bicycles, buggies for runs to the grocery store and even “e-skateboards.”
With the electrification of almost every type of mobility, watch for the emergence of start-up firms building ever more robust batteries. Despite cost reductions, batteries remain frightfully expensive and they store insufficient power for long-range trips.
The new enterprise, probably an upstart, that cures the “range anxiety” that keeps prospective EV buyers away from showrooms and sells that advanced battery to automakers for one-third of the current price, will be an investment for the ages to match the early Intel Corp. or Berkshire Hathaway Inc. Bombardier’s London ace in the hole You might wonder why shares in Bombardier Inc., the chronically troubled plane and train maker, are up 31 per cent this year. Time for profit-taking? Maybe not. Winning an order from the Swiss short-haul arm of Deutsche Lufthansa AG has turned out to be a blessing in unexpected ways.
Swiss began last week to fly Bombardier’s make-or-break C Series jetliners out of the notoriously cramped London City airport. Pilots regard London City as one the most challenging urban airports due to its short runway and unusually strict environmental restrictions.
Which makes the narrow-body C Series, with a capacity of as many as 160 passengers, the most lucrative plane an airline can use at London City. The C Series requires a shorter runway, has quieter engines and boasts 25 per cent more capacity and twice the range of other jets flying out of London City.
At London City, Bombardier can prove the C 300’s worth in direct flights from major centres to similarly challenging airports, including Lhasa in Tibet and the tough-to-navigate airport serving the Aspen, Colo., ski resort.
That’s how C Series buyers Priv- atAir and Odyssey Airlines plan to use their aircraft.
Other airlines might take up Bombardier on its claim that with its long range, the C Series could be ideal on trans-Atlantic flights from secondary European airports such as London City.
That would enable carriers to avoid the big hubs such as Heathrow, with their congestion and high takeoff and landing fees.
If Bombardier makes good on its vow to sign up new clients this year — and Qatar Airways, Ryanair Holdings PLC and easyJet PLC seem likely prospects — Bombardier shares should continue their en- couraging upswing. Atroubling windfall Over the past five years, mortality rates have flatlined or actually worsened in Canada, Britain and the U.S.
That’s unusual and worrisome in advanced economies, accustomed to average annual improvements in longevity of about 1 per cent a year over the past half century.
But it’s also a windfall for enterprises saddled with huge pension obligations.
Bloomberg calculates that at least 12 major U.S. corporations, including General Motors Co., Lockheed Martin Corp. and Verizon Communications Inc., have collectively cut their estimates of what they will owe retirees by a total of $12.3 billion.
In the U.K., diminished life-expectancy gains could reduce privatesector pension liabilities by 15 per cent, or $511 billion, according to accounting firm PwC. That estimate has been dismissed by some British actuaries as significantly exaggerated.
But no one disputes that longevity progress has stalled. And there’s no agreement on the causes.
A 2015 report pointed to suicide, drug overdoses and alcohol abuse in stunting longevity progress among middle age white Americans. Other studies pin the blame on the widening gap between rich and poor (income inequality), a fraying socialsafety net, and the Great Recession, whose legacy is depression and other health issues among the nine million Americans and approximately 400,000 Canadians who lost their jobs during that 2009-2012 period.
Whatever the causes, they need careful examination, says Joseph Lu, chair of the mortality research committee of the U.K. Institute and Faculty of Actuaries, whose July report highlighted the longevity problem in Canada, Britain and the U.K. “These signs should be taken as warnings that worsening health care, behaviour and environment can reverse decades of success in health and longevity,” Lu said. dolive@thestar.ca