How we can stop Lithium from becoming the next conflict mineral
Lithium is one of the most important metals in recent history. The white, powdery alkali commodity allows us to recharge the batteries in our electrical devices, keeping our lives online, a constant demand for people navigating 21st century life.
Where is lithium found?
There are three sources of lithium: salt brines, hard rock and clays. Salt brines and hard rock are currently the most exploited sources. Salt brines present themselves in the form of lithium-rich liquor whilst hard rock is a pegmatitic material that contains lithium rich minerals such a spodumene. Hard rock is primarily sourced from Australia and China whereas brines are sourced from the ‘lithium triangle’ of Argentina, Bolivia and Chile. Lithium bearing clays historically haven’t been as popular as brines or hard rock due to the expensive and technically difficult methods of extraction required. But, in recent times, due to a surge in demand for lithium, more and more companies are looking to extract lithium from clays at a competitive cost.
Hard rock and brines can form two different end products. Hard rock can only form lithium hydroxide which has a lithium content of 29%; brines primarily form lithium carbonate which has an average lithium content of 19%. However, lithium carbonate can be transformed to hydroxide through an energy intensive process.
The growth of the lithium market
Looking ahead, lithium supply is set to almost triple by 2025 to more than 1.5 million tonnes. Temporarily in 2019, lithium prices plummeted due to oversupply and a slowdown in the production of electrical vehicles. This slump caused investors to slow capital into new upstream projects meaning the current oversupply could shortly be flipped into undersupply, potentially causing prices to rise once again.
Currently, lithium carbonate accounts for 87% of the market, but this is set to change in the not so distant future because lithium hydroxide is preferred for newer battery cathode technologies due to its initial higher lithium content. Albemarle are one of the leading companies focusing on hydroxide expansion in the coming years, commissioning an additional 20,000 million tonnes of material in their Xinyu hydroxide plant in China.
South America is set to see the largest growth in the market with an expected expanse of around 199%. New brine lakes and existing brine pools are expected to start production and ramp up output. North America is set to see a 5% increase, with three mines coming online before 2025. Europe, however, is expected to add only one new lithium mine by 2025, giving them a slight increase on the global lithium supply. Europe makes up for the lack of growth in raw material production with a large presence in the manufacturing sector. Europe is expected to have 25 new giga-factories to be operational by 2025, making it a hub for manufacturing despite being reliant on the supply of raw materials from elsewhere.
Social and environmental problems surrounding lithium mining
There has been wide reporting of the environmental concerns surrounding lithium mining. The indigenous people of the Atacama Desert in Chile, have exclaimed that their way of life is being compromised due to mining activities. Water reserves are being diminished and ecosystems are being compromised. Tibet also has recorded the effects of lithium mining on its delicate ecosystem. Protestors in 2016 threw dead fish, which had been plucked from the polluted Liqi river, onto the streets of Tagong. Ganzizhou Rongda Lithium co. ltd. are reported to have polluted sources that provide drinking water for wildlife along the Tibetan plateau. This is believed to be the third such incident in 7 years.
Mining companies are estimated to generate $250 million a year in sales each – whilst local communities will receive an annual payment ranging from $9000 to $60,000 for the rights to use their land surface and water. This has built tensions between mining companies and the local communities. It further begs the question, are large multimillion-dollar companies exploiting these rural communities and giving them an unfair cut?
It has been reported that there will be an increase in the production of lithium hydroxide; this means the conversion of carbonate into hydroxide which is energy intensive. This process will generate a greater amount of emissions causing more issues to the surrounding flora and fauna and giving the material a greater carbon emissions footprint.
Recycling of lithium
With production comes waste, and the appropriate disposal of lithium batteries is key to fulfilling and feeding back into a circular economy. The lifespan of a battery in an electric vehicle, such as the Tesla Model S or Nissan Leaf, varies between 8 and 10 years, or 60,000-100,000 miles, before it needs to be replaced. Therefore, with the growth of the EV sector it can be foreseen there will be ample batteries to be recycled in the future.
Recycling of lithium-ion batteries is predicted to make up 9% of lithium supply by 2025 however currently recycling is the smallest source of lithium on the market. It has been suggested that lithium recycling is not yet capable of yielding lithium pure enough for reuse therefore it is only ever good enough to be used in paints and ceramics, the second largest lithium-consuming industry after the lithium-ion battery industry.
The future of lithium
Whether or not that is true, recycling as much lithium as possible should be the target. With increased demand, comes increased scrutiny, and organisations that buy or use lithium in their products should prepare for a world in which this vital material is treated the same way as conflict metals are today.
Companies will need to be able to demonstrate that the lithium sourced for their products has been produced according to the latest global best practices and that it has resulted in as little environmental and social damage as possible. A real-time view of the supply chain, such as can be provided by the Circulor platform, will allow these metrics to be included in the buying process, leading to an improved world for everyone involved in the production of lithium.