Energy

Lithium resource squeeze could put the brakes on decarbonization

Lithium resource squeeze could put the brakes on decarbonization
The Uyuni Salt Lake in Bolivia holds an estimated 5.4 million tonnes of lithium
The Uyuni Salt Lake in Bolivia holds an estimated 5.4 million tonnes of lithium
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The Uyuni Salt Lake in Bolivia holds an estimated 5.4 million tonnes of lithium
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The Uyuni Salt Lake in Bolivia holds an estimated 5.4 million tonnes of lithium
Chunks of lithium metal, soft as cheese and tarnished with a thin layer of black nitride
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Chunks of lithium metal, soft as cheese and tarnished with a thin layer of black nitride
The red line in each case represents a "sustainable development scenario" consistent with meeting the goals of the Paris Agreement. Blue represents current and
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The red line in each case represents a "sustainable development scenario" consistent with meeting the goals of the Paris Agreement. Blue represents current and expected production
A range of minerals will be in high demand as the EV transition ramps up
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A range of minerals will be in high demand as the EV transition ramps up
While the extraction of battery-relevant minerals is fairly distributed, the processing is overwhelmingly done in China
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While the extraction of battery-relevant minerals is fairly distributed, the processing is overwhelmingly done in China
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As the EV revolution speeds up, and big battery projects ramp up to stabilize power grids running on intermittent renewables, global demand for lithium batteries will rise sixfold in the next 10 years. But can the world actually supply the materials?

There are many potential emerging alternatives to lithium batteries, but for the time being, lithium remains the best commercially available option for a wide range of use cases, and it's unclear what will rise to replace it, or when. We're already getting a small taste of a lithium squeeze, thanks to a freak heat wave that disrupted supply in China's Sichuan province last month.

A new report from EV supply chain market intelligence publisher Benchmark gives us a sense of what rising battery adoption means at the resources level. Even assuming the recycling of raw materials, the report suggests we'll need about 336 new average-sized mines by 2035.

That breaks down into around 59 new lithium mines producing an average of 45,000 tonnes, 38 new cobalt mines producing 5,000 tonnes, 72 new nickel mines producing around 42,500 tonnes, 97 new natural flake graphite mines producing around 56,000 tonnes a year, and 54 new synthetic graphite plants producing an average of 57,000 tonnes each per year.

Chunks of lithium metal, soft as cheese and tarnished with a thin layer of black nitride
Chunks of lithium metal, soft as cheese and tarnished with a thin layer of black nitride

Looking at lithium specifically, this soft, silvery-white metal is projected to be in surplus in the short term, according to the International Energy Agency, but by 2030, existing mines and projects under construction will only be able to produce about half of what's needed to satisfy demand. What's more, the same report found that lithium mines that started operations between 2010-2019 took an average of 16.5 years to develop.

Add to that the fact that these mines will need to be up and running by 2033 in order to feed the supply chain for 2035, and it starts to become clear that a number of new operations will need to ramp up at unprecedented speed to avoid a crushing lithium squeeze.

The red line in each case represents a "sustainable development scenario" consistent with meeting the goals of the Paris Agreement. Blue represents current and
The red line in each case represents a "sustainable development scenario" consistent with meeting the goals of the Paris Agreement. Blue represents current and expected production

The demand won't stop rising there, either. The World Economic Forum estimates that around two billion electric vehicles will be needed by 2050 for a global net zero carbon push – up from around 16.5 million on the world's roads today. Large jurisdictions like the European Union, China, Japan and a number of US states are bringing in legislation to speed up the transition, putting end dates on the sale of fossil-fueled cars. Are they planning to walk these dates back if there simply aren't enough batteries to make EVs?

The supply picture looks worse still if solid-state lithium batteries take off quicker than expected; their pure lithium anodes could push demand higher by up to 22% over current projections. And huge grid battery projects will rise in proportion to the share of renewables in each country's energy mix – although since physical size and weight are less important, other technologies like flow batteries could step into this space.

Another issue is water. Conventional lithium extraction requires huge quantities of water, and most of the world's biggest reserves are found in areas where water scarcity and drought is already an issue, like Australia, Chile, Argentina and Bolivia. And some operations potentially contaminate local groundwater with metals such as antimony and arsenic, making them very unpopular with farmers and residents.

While the extraction of battery-relevant minerals is fairly distributed, the processing is overwhelmingly done in China
While the extraction of battery-relevant minerals is fairly distributed, the processing is overwhelmingly done in China

There are some promising-looking extraction alternatives, like this Saudi research into cheap lithium production from seawater – which desalinates the seawater in the process, and also generates hydrogen and chlorine gases as additional revenue streams. This is a lab prototype, not a large-scale commercial operation, and while there's plenty of lithium in the sea, there's certainly no guarantee that this nascent process, or other similar ones, will prove scalable enough to fill the coming hole in supply.

The lithium battery has been one of the key foundational pillars underpinning the world's technological progress in the last couple of decades. Without them, the cell phone couldn't have become the smartphone. Absent the groundbreaking power and energy density of lithium, drones and eVTOLs make no sense, many portable and mobile devices would never have made it to market, and electric vehicles would be hamstrung by crippling range figures, so hydrogen-based powertrains might be the only practical path toward decarbonization.

But it seems very likely that an extended lithium squeeze will hit within the next few years, pushing up battery prices and putting some harsh brakes on global decarbonization trajectories in the coming decades. So the development and commercial rollout of alternative battery and clean fuel technologies is of critical importance.

Sources: World Economic Forum, IEA, Benchmark Minerals

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18 comments
18 comments
Jim B
Good article Loz, but you seem to be confusing grid stabilization with energy storage. No grid around the world uses lithium ion batteries for energy storage as they are far to expensive compared to natural gas or even oil.
Lowell
Loz Blain already gave us the solution in an article titled "New tech cheaply produces lithium and H2, while desalinating seawater"
Ron Fichtner
All this acceleration in mining production, using fossil fuel powered equipment to produce incremental lithium for EV batteries. Does this actually make sense to someone? The irony should be clear to everyone. We are chasing a false hope in moving to EV's. The real answer lies in hydrogen. It is plentiful, easily accessed, absolutely green and readily adaptable to the current vehicles and fuel delivery infrastructure.
TechGazer
At the rate of new technology development, I'd be surprised if there weren't suitable replacements for lithium cells by 2030. Some of the alternatives might be more economical for some applications, such as grid stabilization (or home system storage). Even if lithium cells remain the highest energy/volume, not everyone wants to pay the price premium for that when there's a 'good enough for the price' option.

I wonder whether the projections factor in recycling of lithium cells.
Lowell
Moving water from a lower area to a higher area to create hydroelectric energy from surplus solar and wind power, is the solution to grid stability. The article about mountain lakes in Switzerland is an example of this being used now.
Electric vehicles should use hydrogen. The platinum plates in fuel cells won't break from heating and cooling if they are held in place by the new metal that gets springier when it gets hotter. A Korean auto manufacturer is currently making hydrogen fuel cell cars used in Southern California that are reliable.
Spud Murphy
There are other chemistries already hitting the market, like CATL's sodium ion batts, which are ideal for stationary storage. If all the stationary storage manufacturers would shift to other chemistries, that would free up a lot of lithium cells for EV use. CATL's cells are already at 160Wh/kg, that's as good as the cells in my Renault Zoe (and these are just CATL's first gen cells), and AMTE Power in the UK are at 140Wh/kg.

CATL is already planning to mix sodium and lithium cells in EV packs starting next year, and you can bet they will be working hard to ramp up sodium cells in the future.

Everyone is worrying needlessly, battery advances will solve the potential problem of limited lithium supply, especially if stationary storage manufacturers stop using lithium cells when they don't need to.

@Ron Fichtner, that's rubbish, hydrogen is scarce because it is chemically bonded to elements, you have to liberate it from other chemicals, usually either methane or water. Going with the non-fossil source, electrolysis of water, it requires a lot of energy, vastly more than you get back from the hydrogen in the overall fuel cycle. In fact, the electrolysis to end output power in the hydrogen fuel cycle comes in at less than 40% efficient when all the production, storage, transport and usage losses are accounted for. This has been explained over and over again, why do the hydrogen hypers just refuse to accept the realities of this?
vince
There is enough lithium is the Salton Sea alone to meet all of Americans needs for 20 years.
Kiffit
Everybody is assuming that all we have to do to save the environmental day is keep doing what we currently do, but with a renewable rather than fossil fuel energy system. It should by now be crossing minds that we are going to have to do rather more than that.

All the data shows we are not even vaguely on track to keep global temperatures at 1.5 degrees centigrade above pre-industrial levels, which increasingly looks rather less than benign, if current signs are anything to go by.

The chances are we are going to be forced into a restructure towards civil defense and industrial/urban resilience in the face of increasingly difficult conditions.
christopher
Every person (or billionaire) who says "alternative" in relation to battery chemistry is heaping massive financial risk onto all lithium-related battery mining operations, and basically making the cost of future batteries unaffordable. No investor wants to build a mine that takes years (or decades) to get going, when they think that something else will be needed besides their materials in future - so they either don't invest (which means future shortages and high prices) or investment comes with suitable risk-factored premiums/interest/insurance included (which means future material prices will be extra high, so, high prices again).
Alan Reyes
This is why governments picking the future is a huge Democrat error. Hydrogen is a far cleaner, more scalable energy source to use as the energy conversion product from intermittent electrical power generators. Hydrogen storage requires no exotic materials. Using hydrogen requires no scarce metals. Hydrogen can be used similar to propane or natural gas as to storage and the materials needed to make end use devices. Direct electricity use requires unavailable amounts of copper, lithium and rare earth elements. The Democrats picked batteries and direct electricity and that is a a failure .
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