“Lithium is simultaneously the simplest and most complex metal” [1]
The growing demand for Li-ion batteries far outstrips supply, even with never-before-seen investments in mineral extraction and materials manufacturing, showing a major disconnect in the supply chain. Several countries are developing battery production capabilities over the next few years, though most of the supply chain will remain in China until 2030
RENEWABLE ENERGY (RE) sources, energy storage systems (ESS), and electrification are the key elements that underpin the energy transition. However, the development of such elements will require a stable and cost-effective supply of critical minerals.
In fact, there is no major technical hurdles on the way towards green goals for 2050 [2]. But, to take the first steps efficiently, it’s worth looking at the entire chess (or even “Go”, the ancient game) board: “it doesn't matter how fast you're going if you're headed the wrong way”.
As RE resources are based on energy flows, not on energy stocks as fossil fuels, a storage unit is needed. Currently, a wide range of ESS solutions is available to carry out the energy transition, the most prominent being the battery ESS (BESS), which can be characterized by three aspects: safety, cost ($/kWh), and performance (e.g.: energy capacity, power capacity). Maintain and advance BESS tech leadership is crucial in today's and tomorrow's global economy [3].
BESS fall into two buckets: Lithium-ion (Li-ion) and non-Li-ion technologies. Currently, Li-ion batteries (LiB) stand out, completely dominating the electric vehicle (EV) battery market and capturing 93% of the battery market for (front and behind the meter) stationary energy storage applications in 2020 [4].
As the first alkali metal of the periodic table, Lithium, a highly reactive element with the lowest density of all metals, rules the battery world. But Li-demand is especially critical, expected to rise five-fold to 5,500 GWh between 2021 and 2030 [5].
El punto clave es…
Amid a record-high demand for Lithium, a question remains unanswered: can supply keep pace with demand in the future? Here is the one-million-dollar question of the decade!
First, it is worth distinguishing countries that are leaders in mineral extraction and those that are leaders in mineral processing. Although extraction is taking place in several nations, a single country dominates the processing of all these critical minerals: China [6]. The Dragon controls more than half of the Lithium, cobalt, and graphite processing and refining capabilities [7].
Second, though found in nearly all igneous rocks and in mineral springs, Lithium is a poorly concentrated mineral, making it difficult to obtain.
Third, extraction and refinement are complex and very time-consuming tasks: LiB factories can be built in a couple of years, but it takes up to a decade to bring on a Li-project [8].
Lithium reserves & extraction
Currently, China leads the global battery race producing 76% of LiB in 2020. Most Li-mines and reserves are located in Chile and Australia, with China largely in control of global supply chains. Japan and South Korea are involved in most investments in battery cell production outside the Chinese market. Further up the supply chain, the U.S. and other countries will likely remain dependent on Chinese companies for a long time [9].
In fact, the element itself is not lacking, at least in geological terms, as Lithium can be found everywhere on earth, even in seawater (but w/ low Li concentrations: 0.1–0.2 ppm, compared to an average of about 1,500 ppm in Salar de Atacama basin).
In a recent report, Mckinsey states that Li-industry will be able to provide enough product to supply the burgeoning LiB industry, which is forecast to grow at a CAGR of 25% from around 500,000 of Lithium carbonate-equivalent (LCE) tons in 2021 to 3.3 (base scenario) / 3.8 million metric tons (accelerated scenario, CAGR of 26%) by 2030 [10].
According to the consulting firm, Lithium exploration for conventional Li-deposits is happening globally from i) well-established Lithium producing countries (Australia, Chile, China, and Argentina), ii) countries with recently mapped resources and reserves (Mexico, Canada, Bolivia, the U.S., and Ukraine), and iii) locations typically not associated with Lithium (Siberia, Thailand, the UK, and Peru) [10].
Additional Li-sources required to bridge the supply gap are predicted to come from unconventional brines such as oilfield and geothermal brines, the latter well-placed in the race for greener batteries [11].
New Li-production techs
Moreover, new production technologies could ease pressure from Li-demand. There exists a relatively large pipeline of projects to scale up Li-supply, such as direct Lithium extraction (DLE) and direct Lithium to product (DLP). Although in their early stages, DLE and DLP are expected to boost recovery and capacity, offering significant promise of increasing supply, reducing the industry’s ESG footprint, and lowering costs, with already announced capacity of about 10% of the 2030 Lithium supply [10].
However, given the inability of supply to react quickly, the need for tech innovation and substitution of critical metals should be considered, possibly at the expense of performance and cost of the end-use application [12]. As a real-life example, many electric vehicle (EV) manufacturers are switching to LFP chemistries instead of NCM or NCA to lessen their exposure to cobalt and nickel price rises [13].
The achievement of a balanced Li-supply and demand thru this century depends also on i) the presence of well-established recycling systems, with expected Li recycling efficiency of 95% (after collection and dismantling), ii) the scale-up of vehicle-to-grid (V2G) from niche to mass market, and iii) the provision of transport services with lower Li-intensities [14].
Europe and U.S. running behind
The rising demand for LiB far outstrips the supply, even with never-before-seen investments into materials extraction and manufacturing, showing a great disconnect in the battery supply chain [13].
While raw-materials needs will grow exponentially for certain metals, lead times for large-scale new greenfield assets are lengthy (up to ten years) and will require significant capital investment before actual demand and price incentives are taking effect [12].
As a strategic material, the whole world is in a big rush for the white gold. Riding this wave, European and U.S. governments have committed to developing battery production capabilities in the 2020s.
Trying solving NIMBYism
Europe, the first continent to set a carbon neutrality target by 2050, produces a quarter of the EVs on the market but controls very few raw materials [15]. With negligible Li-production taking place in Portugal, where it is mined in association with quartz and feldspar almost exclusively for supplying the ceramics industry, most of its needs is being currently met by imports, mainly from Australia. There are now 10 potentially viable Li-projects in Europe: three in Portugal, two in Spain and Germany each, and three in the Czech Republic, Finland, and Austria. However, some of these projects are facing strong opposition on environmental grounds [16].
Good news for the Old Continent comes from i) UK-based Savannah Resources Plc, Europe's leading conventional lithium dev. company, with its Mina do Barroso project in Northern Portugal, region which holds the Western Europe’s largest Lithium deposit, to produce (not before 2025) Lithium for around 500,000 EV battery packs per annum [17], and ii) Australian-based Vulcan Energy Resources Ltd. and its five (under construction) geothermal power plants in the German Upper Rhine Valley, near one of the world’s richest Li-reserves in geothermal brine, to produce (not before 2024) 40 ktpa LCE with zero-carbon footprint via Sorption-type DLE [18].
Houston we have a problem, but…
The U.S., the third-largest EV maker and home of Tesla Inc., plans to ramp up domestic Li production, but now produces less than 2% of the world's supply of Lithium [8]. The country was by far the largest Lithium producer until the mid-1990s, when Chile took over as the dominant producer with Salar de Atacama brines [19].
With a single open Li-mine (Silver Peak, Nevada), in continuous operation since late 1960s, the Land of Opportunity imports most of its supply from Argentina and Chile [20]. But with Salton Sea, California's largest lake by area, the country could enter Lithium market for good. According to the California Energy Commission, there’s enough Lithium in its hot salty water to meet all of the U.S.’s projected future demand and 40% of the world’s demand [21]. Although extracting Lithium from geothermal brines has never been done at scale, three companies are developing joint geothermal-Lithium facilities in a cleaner way: EnergySource, Controlled Thermal Resources, and BHE Renewables, which set 2024, 2024, and 2026 as the target year for beginning commercial production, respectively.
Brazil State of charge (access here)
07, September, 2022
* Professor at School of Electrical, Mechanical and Computer Engineering (EMC) of Federal University of Goiás (UFG)
References
[11] https://www.bbc.com/future/article/20201124-how-geothermal-lithium-could-revolutionise-green-energy
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