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The demand for electric vehicles is skyrocketing. Can the supply of lithium and other critical minerals for batteries keep up?

From the deep sea to the DRC, countries and companies are scrambling to secure increasingly scarce minerals to meet urgent climate goals.

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By Dave Levitan - Climate Reporter

If the world wants to replace all its gas-burning cars and trucks with cleaner electric vehicles, it will have to dig up rocks. A lot of rocks.

Demand for EVs is soaring in many parts of the globe, and a wave of domestic policies will send it skyrocketing in the U.S. soon. The batteries that power all those EVs need minerals — cobalt, nickel, graphite and, in particular, lithium — and the race is now on to mine and process enough of them. Complicating the picture, the minerals needed to fuel the EV boom are also increasingly in demand for energy storage and other clean energy technology. Just as fossil fuels have powered the global economy for the past 150 years, these minerals will be the crux of the energy future.

Lithium is currently mined in a relatively limited number of countries, with supply dominated by Australia, Chile and only a few others. The U.S., where recent legislation requires that EV batteries increasingly be sourced domestically or from certain trade partners, has very limited lithium mining in operation and permitting rules that may slow efforts to bring more online.

Other minerals are mined in varying locations across the world, often in countries with limited environmental oversight or the potential for significant geopolitical strife. And some seemingly far-out and controversial ideas are coming closer to fruition, such as mining cobalt, nickel and copper from millions of small rocks deep under the Pacific Ocean.

“In order to meet the demands of the Western automotive market, you’re going to need — it can’t all just be coming from one country — you’re going to need a diverse set of suppliers,” Miller said.



This summer, analyses showed the U.S. had passed the 5 percent mark for EVs among new car sales, joining China and Europe — considered a tipping point for the technology, after which mass adoption of EVs will theoretically take over. This would be a crucial steppingstone for climate action, driving down emissions from the sector that, in the U.S., remains the largest source of CO2 and globally accounts for more than 15 percent of all emissions. The question is: Can we get enough of those rocks out of the ground to keep up? Or will a limited minerals supply make EVs scarcer and more expensive than the public, and the climate, demands?

Global Supply Lens

Diversifying lithium sources

By Dave Levitan - Climate Reporter

Australia, Chile and China collectively account for more than 85 percent of all the lithium mining in the world; adding Argentina and other Latin American countries brings that to 98 percent. This isn’t necessarily because of limited availability, though.

“Lithium isn’t geologically scarce,” Miller said. “It is not about the geological availability of lithium, but the ability of the industry to extract it.”

But bringing new mines online can take years — years the world doesn’t really have in the context of climate change. “If you look historically in the lithium market, you’re looking in the region of seven to 10 years to really develop a greenfield lithium asset,” Miller said. “That’s your typical timeline.”

And in some places, a complicated geopolitical landscape makes it difficult to project future supply. On Sept. 4, citizens of Chile, home to the world’s largest existing lithium deposit, voted down a new progressive constitution that would likely have made mining more costly by strengthening environmental protections and centering the rights of Indigenous people. The defeat sent the government back to the drawing board and drew cheers from the mining industry.

A broad collection of nonprofits, banks, governments and even car companies have joined calls for a moratorium on deep sea mining, with concerns that one of the last pristine ecosystems on the planet could be irreversibly disturbed. “We have to create the legal framework to stop high seas mining and not to allow new activities that endanger ecosystems,” said French President Emmanuel Macron earlier this summer. Nevertheless, the International Seabed Authority, the obscure United Nations body responsible for governing the mining in question, has granted the Metals Company permission to begin a pilot mining project.

There are of course environmental concerns with surface mining of those minerals, and lithium as well. Yet the conversation has a different tenor than with previous mining booms thanks to the existential need to combat the mother of all environmental issues, climate change.

One country has understood the need to “turn over dirt” in the name of the clean energy transition — and reaping the riches of the future economy — more than most: China.

China Lens

How Chinese companies came to dominate the battery supply chain

By Lili Pike - China Reporter

Miller said China’s approach is now seen as one to emulate. “What we’ve certainly said in our conversations with policymakers in the U.S. and the other parts of the world is that you can actually look at what China has done as quite a strong template for the rest of the industry.” He added, “What it has done very well is positioning itself strategically, either owning assets directly or working in joint ventures, to dictate the flow of those lithium units when they are taken out of the ground, which means they’re being refined in China. So it directs the trade flow to China.”

U.S. Policy Lens

Clawing back into the lithium game

By Dave Levitan - Climate Reporter

The fact that Chinese companies tower over the supply chain for some of the commodities most central to the future economy and global efforts to fight climate change has caught the attention of policymakers in Washington.

The pandemic has proved that depending on one source for any material has risks, and for some in the U.S., depending on China appears particularly risky. Under the most extreme scenarios, such as conflict with China over Taiwan, the U.S. could lose access to China’s big mineral refiners. Even under less dire straits, China could weaponize its control over the mineral supply chain in a trade war.

Other companies are trying to get a foot in the American door. The Biden administration has approved a huge open-pit mine at Thacker Pass in Nevada to be built by Canadian company Lithium Americas, but local opposition has left its fate up in the air.

“There’s a lot of really solid lithium assets within the U.S. that are under development. The issue is the timeline to bring those to production is several years — best case,” said Miller of Benchmark. “There are some serious question marks about, you know, whether you can really move the needle by as early as 2024, 2025. It’s going to be incredibly difficult. The U.S. won’t be able to be self-sufficient in lithium for a long time to come.”

“The permitting system is basically difficult, we’ll say, or uncertain,” said Lange. “That weighs on a lot of firms’ investment decisions or a lot of investors’ decisions. ... These kinds of things just make people say, ‘You know what? Canada’s happy to have us. Australia is happy to have us.’”

Technology Lens

Car companies’ plan for the mineral-heavy future

By Dave Levitan - Climate Reporter

Likely worried about the potential for bottlenecks and shortages, other car companies are starting to get in the game.

Some experts are optimistic that technological advances will also act as a shield against potential mineral shortages. “Materials substitution is a thing,” Lange said. “We have a bottleneck around nickel? Guess what, there are some material substitution possibilities — people will figure out new things.” Chinese battery leader CATL has gone big on a battery chemistry that is lower density but doesn’t require as much cobalt, for instance.

Nakano agreed that substitutions of some minerals may be possible, but lithium plays a central role in essentially all EV battery chemistries. “Lithium is much harder than other minerals to replace,” she said.

Lange also said mining and processing companies have started paying more attention to byproducts that used to be discarded but now can be salvaged and sold. There is also an increasing focus on recycling of minerals from batteries that reach the end of their lives; the IEA projects that recycling could ease the primary supply requirements of lithium, copper, nickel and cobalt by around 10 percent in 2040.

It’s not yet clear whether the world’s mineral mining can catch up and eventually keep pace with the skyrocketing demand for electric vehicles. But after years of stagnation in the field outside of China’s prescient moves, the flurry of recent activity marks a clear departure from the past. Still, the decades of delay mean the world must now transition to EVs at a breakneck pace, and there are some rocky roads ahead.

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