Lithium: fueling the clean energy revolution
31 Aug 2020
The transport sector alone contributes roughly one-quarter of all energy related CO2 and is still primarily dependent on fossil fuels. But that’s changing thanks to the lightest solid on Earth, which some are even calling the “new gasoline.”
Lithium, it’s the soft, silvery-white metal that’s become a critical component in hundreds of applications, including the auto industry’s new shining star – the electric vehicle (EV). While EVs have been around for some time, it’s due to much-improved lithium-ion (Li-ion) battery technology that we’re seeing them on the road in greater numbers. These super-tech batteries keep their charge for long periods (100 to 300 miles), are lightweight and recharge quickly (ca. 30 minutes via a super charger) – key criteria for buyers.
And, if you look around at the devices and equipment you’re using today, you’ll find Li-ion batteries powering everything from your mobile phone, laptop, digital camera, your cordless hand drill and your e-bike. They’re also used to store energy from wind and solar, which removes even more CO2 from the environment.
21st century gold rush
Lithium does not occur as a metal in nature, rather it is extracted from igneous rocks – primarily spodumene – or from bodies of water with high salt content or brine deposits. And while not classified as a “critical” raw material, lithium is a coveted commodity.
Latin America is home to the world's largest reserve. Its “Lithium Triangle,” made up of Chile, Argentina and Bolivia, hold anywhere from 54 to 80 percent of the world’s lithium resources, much of it in brines. Brine extraction is a less expensive process than obtaining it from ore, but is a longer process, given that it can take up to two years for the evaporation phase.
Australia, the world’s largest producer, holds the second most lithium reserves. Most of it must be crushed out of rock, so to balance the costs, it is largely shipped after first refining process steps to China for further processing. China also has its own reserves and is buying rights to mine lithium in other countries. In the U.S., lithium is recovered from brine pools, although how much is produced has not been published. Zimbabwe, and to a lesser extent Portugal and Brazil are also producing lithium in smaller quantities.
Who’s supplying the demand?
The massive demand for lithium is due to the rise – and the even greater expected rise – in the production and sale of EVs, domestic solar usage and digital devices, all of which require Li-ion batteries.
Globally, more than 120 different EV models are expected to hit the road by 2020, in countries like the U.S., China, India and Norway, among others. To power them, both China and the U.S. have ramped up Li-ion battery production, with China in the lead. In the U.S., Tesla has two gigafactories for EV battery and component production and is building another in China.
The lockdowns caused by the COVID-19 pandemic have resulted in a global reduction in EV sales, interrupting ten successive years of strong growth. That said, long-term scenarios continue to show strong growth for lithium demand over the coming decade, particularly given that the greenhouse gas (GHG) emissions from EVs will continue to be lower than those from conventional internal combustion engine (ICE) vehicles.
Tipping the balance
Different lithium compounds have different end uses, therefore lithium is not homogenous, like aluminum, for example. This, and the fact that it is a relatively small market dominated by a few players, makes it more difficult to set a “price” for lithium, trickier to hedge, and therefore, secure financing for new extraction projects.
The ramp up of lithium production is primarily dependent on increasing EV adoption. This of course requires consumer buy-in. However, it also requires persuading others along the chain – investors, chemical processors, battery/cathode manufacturers, carmakers and politicians – that lithium supply will be reliable, of high-quality and affordable. Likewise, EVs and Li-on batteries are not without their critics, who are quick to point out that a structure for recycling Li-ion batteries is still largely missing. Finding closed-loop solutions for recovering and reusing Li-on battery materials would boost the technology’s green credentials and further solidify lithium’s future.
On the consumer side, drivers are warming up to EVs, as concerns about product safety, battery durability and range subside. The combined technical improvements, increased model choices and drop in price, as well as the appearance of more charging points, suggest that we’re in for a brighter and cleaner future.
