Simon Michaux, Associate Professor of Geometallurgy from Geological Survey of Finland, GTK, believes there will be bottlenecks in the battery minerals supply chain due to a lack of global mineral reserves. He says a new plan will be needed as there are not enough metals to manufacture the planned first generation of non-fossil fuel industrial systems – and recycling will not be enough to plug the gap either. Andrew Draper reports.
Bottlenecks in the materials supply chain may mean gigafactories not being able to make all the batteries they want to. This, in turn, may impact on the very idea that everyone should be able to own and run their own electric vehicle (EV), in the same way they do with internal combustion engine vehicles, said Michaux.
He calculates that global reserves, and global production, may not be enough to resource the quantity of batteries required.
Basic numbers missing
Michaux arrived in Europe in 2015, having left the mining industry in Australia. He said: “And so I come to Europe and I’m sitting in the European Commission building, and I’m listening to meetings about circular economy in the H2020 research project. And it was extraordinary, it was all arm waving. And having just come out of a period of layoffs, I found it was terrifying… I knew reality was going to present itself at some point. When it does, things are going to crash. And so, what was missing was some basic numbers.”
He was unable to find anyone who had analysed just how much metal would be needed to make all the batteries and other stuff needed for the post-fossil fuel world of EVs and energy storage.
“I asked some basic questions like: how many vehicles are there in the global transport fleet? And no-one knew. We knew for Germany, and we knew for Europe. We knew for the United States… And there was this bizarre thing happening – and it still seems to be happening – where China’s dominating and controlling everything. Absolutely, dominating everything.
“But it’s not openly recognised. It’s like the elephant in the room, and people are reluctant to talk about that.”
We must understand what that global market is, he said. Europe, which, he said, “likes to throw its weight around about how ethical and sustainable it is, now finds its former colonies are richer and they control the raw materials and manufacturing, he said. “Europe does not seem to understand that if we move into a world where there is not enough to go around, it is going to come second or third, or worse.”
Bottom-up analytical model
Michaux has developed a bottom-up analytical model in which he attempted to work out what is needed to fully replace the existing system and work back from there.
The task of switching away from fossil fuels to decarbonised societies, Michaux argued, is much bigger and more difficult than first thought and will take longer to achieve.
Society and its industrial systems are heavily dependent on fossil fuels, especially oil. The industry has become a very efficient part of society so unlinking society from relying on it is difficult, said Michaux. But oil and petroleum supply may soon become unreliable, according to Michaux, who thinks oil may have peaked in November 2018.
Key findings from Michaux and GTK:
- Current thinking has seriously underestimated the scale of the task ahead
- Battery chemistries other than lithium-ion should/will be developed, each needing different mineral resources.
Michaux believes the environmental impact of large-scale mining is going to be enormous. “I’m trying to encourage people to think in terms of systems and solutions, instead of saying, that’s not going to work… And so first we’ve got to understand what we’re looking at. Then we’ve got to understand our true capability in context of what we’re looking at.”
Material constraints will lead to “innovations of all kinds” and batteries being made in multiple chemistries in parallel, he said.
“You’re going to start having factories, for example, that instead of having one process flow going through the factory, might have seven or eight –depending on what raw materials come in.”
Unrealistic timeline for US battery metal supply chain
Researchers Jennifer Dunn and Jenna Trost from Northwestern University in Illinois, argued in an article in March in the journal Nature Sustainability, that the timeline for the development of a battery metal supply chain in the US may be unrealistic.
For an EV to be tax-credit eligible in the US, 80% of the market value of critical minerals in its battery must be extracted, or processed domestically, or by US free-trade partners (FTPs). They said that a goal of 2027 – set out in the 2022 Inflation Reduction Act (IRA) – may not be achievable and could create new problems.
“We determined that the target may be achievable for fully electric vehicles with nickel cobalt aluminium cathode batteries, but achieving the target with lithium iron phosphate and nickel cobalt manganese batteries would be challenging,” they said.
They noted that a mass-based target could avoid some of the challenges posed by a market-value target, such as volatile market prices. The IRA also ignores the environmental effects of mining, non-critical minerals supply and support for recycling.
The researchers argued that to meet the demands of the bill, a steep increase in domestic mining would be needed (but fraught with environmental and other issues).
They evaluated the feasibility of the IRA’s target for multiple lithium-ion battery chemistries used in fully electric battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs).
The IRA specifies minerals must be extracted or processed in the US or in one of 20 free-trade countries (FTCs) having an agreement with the US.
Minerals could therefore be imported from a non-FTC country to the US or an FTC and processed in a way that would meet IRA requirements, they noted. “This introduces the possibility of gamesmanship that could reduce mineral and energy security and worsen the environmental effects of producing EV batteries.”
The US imported 2,618 tonnes of lithium mineral in 2019, the note stated. Of that, 59% came from Argentina, a non-FTC country that does not offer the labour and environmental protections the US requires of FTC partners, they said. If the US processed this imported Argentinian lithium and used it in batteries, the cars that contain these batteries would be tax-credit eligible.
Dunn and Trost called for guidance on what constitutes processing and allowable sources for the minerals that would be processed in the US or an FTC.
Anodeless batteries will resonate
A research note by Dr. Roberto Pacios, Technology Coordinator of the Electrochemistry Energy Storage Area at CIC energiGUNE in collaboration with Miriam Gutiérrez, said anodeless batteries (specifically, without lithium metal anode) would resonate in 2023.
The absence of pure lithium metal layers in the cell manufacturing process has attracted attention. It makes them easier to assemble, safer, less expensive and more sustainable. But the absence of lithium cuts efficiency.
The note said 50-60% of the world’s cobalt resources are in politically unstable countries and are extracted under questionable working conditions. The European Commission already identified it in 2017 as a critical raw material on which it wanted to reduce its dependence.
The EU’s Critical Raw Materials Act, announced in March, is designed to reduce dependency on China and other countries for key minerals. Some analysts expect the EU to fall short on its target for cobalt, but CIC energiGUNE believes cobalt-free lithium-ion cathodes are key to the future generation of EV batteries.
Will Adams, head of battery raw materials research at cross-commodity price reporting agency Fastmarkets, said of the act: “The EU does not have an abundance of critical minerals. Where it has them, it needs to develop them with a sense of urgency. Parts of the EU’s CRMA do address some of these issues, limiting planning to two years for mining projects and one year for processing projects.
“Because the EU will have to import most of its raw materials, speeding up the processing application procedure will help the EU to build its supply chain,” he added.
In its Quarterly Cobalt Market Update for Q4 2022, the UK’s Cobalt Institute said the quarter saw an increased share of cobalt-free chemistries in EV battery formulations. LFP represents over 30% of the total market. Despite the reduced cobalt intensity per vehicle, cobalt consumption in EVs still jumped by over 60% year-on-year in 2022.
Short-term scarcity not indicative
But the predictions of Michaux and GTK are not universally shared. Maciej Jastrzebski, CEO of Canadian battery anode maker Li-Metal, told BEST that short-term scarcity caused by rapid growth of the industry is not indicative of the steady state or the general abundance.
“When thinking about long-term viability, the focus should really be on lithium, because this is the most difficult to substitute in truly high-energy density batteries,” he said.
“The United States Geological Survey estimates a total world resource of about 90 million tons of lithium. To put that into perspective, that’s enough for more than 10 billion cars, even without considering recycling or alternative sources, so we’re not about to run out any time soon.”
In its mineral commodity summary from January 2023, the USGS put world reserves of lithium at 26 million tons and total lithium resources at some 98 million tons.
Reserves are defined as what can be economically extracted or produced. Resources include minerals only surmised to exist, with present or anticipated future value.
Little interest in lithium till now
Jastrzebski said society has never been too interested in lithium until now. “When we think of other base metals, copper has been an industrial metal since the Bronze Age, and nickel has been an important technological metal for almost 200 years, so we’ve tapped the easy resources.”
He said cathode metals like nickel and cobalt can already, to a greater or lesser extent, be substituted by other materials like iron phosphates and sulfur in the medium term. “So they shouldn’t even be considered in the same category as lithium when looking at the resource constraints on long-term electrification.
“Substitution becomes even more viable and attractive with high-energy density anodes in next-generation batteries, where a big boost in performance comes from completely eliminating the graphite anode and replacing it with lithium metal, allowing a lower-performing material like LFP to be used.”
He said the technologies his company is developing are minimising the use of lithium resources by being thrifty with the amount of material used.
South Korean battery maker LGES said it aims to strengthen its local supply chain for key battery raw materials through strategic partnerships with major suppliers, as well as to secure metals and metal refineries in North America and from FTA countries with the US. “The company will also increase direct sourcing of metals through equity investments and long-term supply agreements. This initiative will be further reinforced by establishing a closed-loop system of used battery collection and recycling,” it said in a statement to BEST.
Cost of lithium carbonate halved
The cost of lithium carbonate halved earlier this year after hitting a record in November, according to data from price tracker Asian Metal.
BloombergNEF analysts said that reflects the major pressure of much more global supply coming online this year, and signs of the rapid growth in China’s EV sector starting to ease.
The two-year price surge in lithium and other battery materials shocked the EV supply chain and pushed battery manufacturers and car makers to lock in supplies, according to analysts.
The dip in the cost of lithium helped car makers and battery manufacturers, but the raw material is still very costly compared to the lows of 2020.
Battery recycling held back
The lithium-ion battery recycling market is being held back by a lack of batteries. Key battles are for end-of-life (EoL) scrap batteries to feed the growing capacity of recyclers in Europe. Analysts are saying it is taking time for EoL stockpiles to build as there are many new recycling entrants and not enough battery scrap to go round.
Market data firm Fastmarkets said the problem is not limited to Europe. It said one notable Japanese battery recycler reported late last year that it is only able to run one of its shredders – at just 15% of capacity – due to a lack of available EoL or production scrap batteries to process.
So whether the battery minerals market faces major bottlenecks, as Michaux expects, or the development of new chemistries eases constraints, the next few years will be fascinating to observe.
