Tesla’s are electric cars that need batteries. Now some batteries components will be made in Louisiana.

A nondescript metal building surrounded by farm fields just south of Vidalia might seem like an unlikely spot for an important nexus of the electric car industry. But that’s what it’s poised to become. Inside the building, Australia-based mining company Syrah Technologies has processed the mineral graphite under a pilot program since 2018. Graphite is a key component in lithium ion batteries. With the help of a $107 million federal loan announced last month, Syrah plans to more than quadruple the plant’s footprint. That will mean adding a projected 36 jobs as part of a project to create the first commercial-scale graphite processor in the United States that produces Active Anode Material, which is used in the batteries that power electric cars. It will give the company — which has already inked a deal to supply Elon Musk’s Tesla from the plant — a U.S. foothold in the booming electric vehicle supply chain. And it signals how state officials are viewing the global energy transition towards more renewable energy as an opportunity for Louisiana’s rural areas.

Could this mean that maybe, just maybe, Louisiana will be moving into a green state? What re the emissions of the plant?

Don Pierson, the secretary of Louisiana Economic Development, said Syrah could be the tip of the spear when it comes to Louisiana and clean energy technologies. Battery makers “are going to need a number of components,” he said. As demand rises, Louisiana companies “are well positioned to get into that,” he said. Other industries, such as solar and carbon capture industries, could also find a home in Louisiana’s less densely populated areas, Pierson said. LED has made revitalizing rural areas a focus of its efforts, he said.

Vidalia is north of Baton Rouge and on the Mississippi.

The city of Vidalia in Concordia Parish sits just across the Mississippi River from Natchez about 90 miles north of Baton Rouge. Mayor Buz Craft, who took office in 2016, said that more than 60 businesses in the area are already working with Syrah, and he’s expecting a jolt to the city’s coffers. “It’s really huge, not just for Vidalia but for the whole region,” Craft said. The company’s expansion “could mean about $2 million per year in sales taxes.” The Syrah land sits just a few thousand feet from the river, giving it quick access to shipping. Syrah plans to make a $175-million investment in the facility, adding 180,000 square feet to the 50,000 that are already there. Construction is expected to begin this year and anode production could commence in 2023.

This is also good as now most of the graphic processing is in China. This helps bring our necessary mineral production needs home.

Most of the graphite mining and almost all of the processing done today takes place in China. Bringing the Vidalia plant expansion online will mean a shorter supply-chain for U.S.-based battery and vehicle manufacturers and diversify their supply base, according to Syrah CEO Shaun Verner. In December, Tesla agreed to purchase 8,000 tons per year, or about 70%, of the Vidalia plant’s output. The conditional loan the company awarded by the U.S. Department of Energy is one of the first doled out under a program that the Biden Administration has touted as a way to boost domestic production of key clean energy technologies. The loan is coming through the federal Advanced Technology Vehicles Manufacturing Program, which was created in 2007 but has remained dormant since 2011. In 2021, clean energy entrepreneur Jigar Shah was named to head the Department of Energy’s Loan Programs Office and was charged with using funds to boost clean energy efforts. “Projects like Syrah Vidalia are critical to our national security, our foreign policy, building our supply chain, and our economy,” Shah wrote in an announcement of the loan. Before going dormant, the program had made loans to major carmakers, but recent changes made loans to mineral operations eligible.

The money is not in hand yet as some necessary administrative actions are needed.

The money isn’t in Syrah’s hands just yet. Both the Department of Energy and the company must complete due diligence and agree to a term sheet, which must be approved by Syrah’s board. Company and federal officials hope that could be completed by the end of June, with the Syrah getting the first tranche of funds in September. Syrah has not always been welcomed in Louisiana. The company’s earlier plan to put a plant in Port Manchac in south Louisiana was quashed after residents worried about the impact on local fisheries. And when it targeted Vidalia in 2018, citizens packed a public meeting to voice concerns about the plant’s air and water discharges. Craft said there hasn’t been recent opposition to the expansion plan.

The graphite is mined in Mozambique and will be brought to the plant for processing.

When up and running, the expanded plant to annually produce 11,250 tons of Active Anode Material, a processed form of graphite. The graphite will come from Syrah’s mine in Mozambique, and then will be sold to electric vehicle makers. This expansion may just be the first step, officials said. By 2040, the site could produce enough anode material for 2.5 million electric vehicles, according to an energy department statement. “Louisiana has all the right elements for the development of new technology in the manufacturing sector, including a vision for sustainable development that aligns well with Syrah’s values,” Verner said. Vidalia, as a processing facility, is “absolutely critical for the production of anode material for lithium-ion batteries,” Verner told an Australian television program in October. 

The plant will get tax exemptions and other benefits from the state.

The company will also get help from the state in the form workforce development assistance tax breaks under the Industrial Tax Exception and Quality Jobs programs. The company has already been awarded one ITEP, in 2019. Craft hopes that once Syrah is up and running, the availability of land, easy access to the river and low taxes will lure connected industries to Concordia Parish. “There are going to be a lot of people who want to invest,” he said.

First oil and gas the chemical and now mineral business in the state. This might be the best one.

Musk business now in Louisiana
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