This story is contributed by Xiaojing Yang
- Given the projected EV market, there will be a shortage in battery-grade lithium.
- Development of the lithium supply chain in North America requires time, patience, and talent but is critical for reducing the current dependence on China and Australia for lithium.
- Lithium is currently produced primarily from brine and spodumene; lithium-clay is soon to become another commercially viable lithium source, although not necessarily with salt-and-water extraction.
Elon Musk surprised the battery world by announcing his intent to produce lithium from clay on Battery Day 2020 [1]. Whether or not this happens in the near-term, developing a domestic lithium supply chain is crucial to lowering raw material costs and diversifying the global sources of lithium production in the long run [2]. This article intends to provide an overview of the upstream lithium supply to the battery world and to promote the importance of a North American lithium supply chain.
Projected Lithium Demand
Despite current battery development trends towards reducing the amount of lithium in each cell, there is still expected to be a significant gap between supply and demand. There is a widespread in the projections: Fernley’s forecasts 3TWh of battery capacity for the entire battery industry in 2030 whereas Tesla predicts 3TWh of demand for itself alone in that timeframe [3]. In either case, the gap between lithium supply and demand is increasing at much higher rates than previously expected (Figure 1)
Industry veteran Joe Lowry also believes that demand will outstrip supply, with a projection of $12,000/MT for the long-term Li-carbonate price, compared to Morgan Stanley’s estimate of $10,000/MT [4]. As evidence, he notes the significant price increase of lithium carbonate in China in Q4 of 2020, suggesting a limited supply due to the rapid growth of lithium iron phosphate (LFP) batteries. Both Fernley and Lowry explain that battery grade lithium is traded as a premium, not as a commodity, due to the high purity requirements (above three nines, 99.9% grade), which includes stringent limits on the impurities [3,4]. As a general rule, the more 9s provided the fewer performance-interfering impurities and the higher the quality. The quality of the lithium is a key factor in the price negotiated between the supplier and the buyer. Fernley mentions that, because cathode makers usually take 6–24 months to qualify a lithium supply, there is not much flexibility in selecting a new supplier on a short-term basis. Lowry also points out that, with a projected 25% EV penetration by 2025, even if we were to use all “garbage lithium” in place of high-quality lithium, it would still not be enough [4].
Supply Chain Fragility
Along with the global gap in supply and demand, the US-China tensions could contribute to regional supply chain fragility, especially since most high-volume cathode suppliers purchase their lithium from Chinese companies like Ganfeng Lithium. Most of the world’s lithium is mined from six mineral operations in Australia, two brine operations each in Argentina and Chile, and one brine and one mineral operation in China. Much of this is shipped to China where more than 65% of global lithium processing occurs [5]. China, however, has plans for EVs to reach 20% of new car sales by 2025 as part of the effort to become carbon neutral by 2060, which might reduce the lithium available for export. Given the delicate trade relations, the dominance of China in lithium production may pose a significant risk for western OEMs and the battery companies that supply them.
Some might argue that American manufacturers can simply rely on lithium from other countries like Australia, especially since the major American battery-grade lithium producers Albemarle and Livent currently source from South America and Australia. But because China is one of Australia’s most important trading partners, China has used this relationship as leverage in the past and may use Australia’s lithium supply as a bargaining chip in the future. If the US continues to rely on China and Australia for ore concentrates and battery-grade lithium, the supply chain could be subject to geopolitical tensions, changes in local mining and transportation regulations, China and Australia’s domestic policies, or even a pandemic that limits international trade [5]. This was a key argument for putting lithium on the Department of the Interior’s list of 35 minerals deemed critical to US national security and the economy [6]. Although there is a strong political incentive to produce lithium in North America as part of the global competition for the EV industry, many US producers have yet to figure out how to produce Li on a commercial scale domestically or from Canada (Quebec’s spodumene) or Mexico at a competitive price.
Tesla recognizes the benefit of having its own domestic supply and has announced its intention to extract lithium from clays in Nevada. While the presence of lithium was never in doubt, the economic feasibility of production is another question.
Challenges to lithium development
Before going into the specifics of lithium production, let us start with the basics of mining and mineral processing. The first step is extensive geological exploration, which can take 3–5 years. Once exploration has been completed, the development of the mineral processing needs another 2–3 years before the mining company can go into production. There are three main steps in a standard mineral processing project (Figure 2):
1. Physical beneficiation to remove gangue and produce a concentrate.
2. Hydrometallurgy leaching to recover targeted elements into a solution.
3. Separation to strip the impurities and precipitate targeted element(s).
Permit acquisition, energy requirements for processing, lack of expertise in technical perspective, underestimation for production, and logistics (e.g., road access) are common challenges for mining companies.
Brine (or salars in Spanish) and pegmatites are the two conventional sources of lithium. The term “hard rock” refers to a type of pegmatite called spodumene, the most abundant lithium ore and a popular choice among companies like Albemarle and Piedmont [7]. Lithium clays, a relatively new source, have received significant attention after Elon Musk’s comments on Tesla seeking to extract lithium with “salt and water.”
Already in liquid form, brine is considered a relatively cheaper source since it eliminates the traditional mining step and physical beneficiation of the ores. Using Albermarle’s Salar de Atacama project (Chile) as an example [8] , the lithium concentration in the brine can be increased from 0.2% to 6% via solar evaporation [9]. The final brine is transported via trucks for further hydrometallurgy, including purification, processing, and crystallization to produce Li-carbonate and Li-chloride. Magnesium, the most performance-interfering impurity in the brine, can typically be removed via precipitation using Na2CO3 and lime [8]. One study shows that to produce 1 kg of Lithium Manganese Oxide (LMO) for batteries, 30 MJ is required in Chile while 36 MJ is required in the US [10]. Even if we take into account the cost of transporting soda ash from the US to Chile, it still costs more energy to produce in the US due to more dilute concentrations in the brine and the higher lime consumption required for impurity removal. In the case of Salar Uyuni in Bolivia, even though the concentration and the reserves are high, the high Mg/Li ratio and elevated altitude are both unfavorable for the evaporation process [7].
Lithium extraction from spodumene, on the other hand, follows the typical mineral processing steps described above. At the largest spodumene production mine (Greenbushes, Australia), the ore is mined from open pits. The raw grade contains around 4.5% Li-oxide, and physical beneficiation produces spodumene concentrates from 5.0 to 7.2% lithium oxide [11]. To make lithium carbonate, the concentrates undergo a heat treatment at over 900 °C that changes the crystal structure and facilitates the sulfuric acid react to form lithium sulfate in solution. After filtration and concentration, lithium carbonate can be precipitated with soda ash (Na2CO3).
Thacker Pass, Nevada, the furthest developed project using lithium clays, is already considered the second-largest lithium project in the world and may shed some light on whether lithium clays can be economically viable [12]. Exploration finished in Q2 of 2018 and the project is expected to begin production in Q3 of 2022. When Thacker Pass received its final approval from the US Bureau of Land Management, the Lithium Americas CEO Jon Evans commented that being issued the Record of Decision (ROD) was “the culmination of over 10 years of hard work” [13]. Figure 3 shows that the hydrometallurgy process at Thacker Pass is similar to the typical spodumene process described above but without the high-energy heating step [14]. In addition, this process has received a high overall lithium recovery (83%). Based on the lower energy requirement and the high recovery [15] , Ganfeng Lithium, which holds an interest in Thacker Pass, recently increased its stake from 22.5% to 50% in the Sonora Clay-Lithium Project in Mexico [16].
When Musk announced his intent to produce lithium from Nevada clays, he described a process using only table salt and water for extraction without sulfuric acid. A similar salt-and-water approach has been commercially applied to produce rare earth minerals from clays in China for the past two decades. However, whether this process can be economically feasible for lithium clays still depends on the grade of the clay, the geological association between the lithium and the clay, and the size of the ideal deposit, among other technical details. Based on data from other companies, the salt-and-water extraction of lithium from clays has not been proven to be commercially viable at the present time [17].
Similar to the brine cases discussed earlier, lithium projects, even if they are the same type of source, can vary drastically from one project to the next due to differences in ore grade, geology, location, permitting, and processing requirements. Just because the source is economical for one project does not mean that the same source at a different location will work. Hence, the development of such projects takes time and patience.
Another challenge to domestic development is a drought in talent. Not enough people understand how to bring lithium from ore to the market, and the ones who do most work for Chinese companies. Ganfeng Lithium alone employs around 100 technical staff with PhDs and master’s degrees, from geologists to battery experts. While the Department of Energy has increased research funding specifically for critical minerals in the past 8 years, the projects often focus on unconventional sources of lithium such as e-waste, acid mine drainage, seawater, and other low concentration materials [18]. This long-term plan is good for incubating new ideas that can potentially improve the existing process for conventional ores, or even lead to the production of lithium from unconventional resources. However, it does not solve the immediate shortage of talent, the lack of technical experts who know the science and have experience with commercial-scale production. This lack of domestic talent creates strong incentives for developers to find a seasoned Chinese partner [4]; such an approach, however, is subject to the geopolitical risk inherent in the US-China relationship.
Although the US intends to reduce its reliance on lithium from China and Australia, there remain many challenges to developing new lithium projects, as described above. Expanding geological exploration, increasing industry-oriented R&D, and developing talent are necessary steps towards addressing these challenges. Moreover, given the projected gap between supply and demand, political and financial support are needed more than ever to secure the requisite lithium production capability in the upcoming battle for EV leadership.
Xiaojing Yang is a Ph.D. candidate from Penn State in energy and mineral engineering. She specializes in rare earth processing from major and secondary resources, coal processing and combustion, sulfur removal, and waste stream utilization.
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Reference:
[3]https://www.linkedin.com/pulse/why-i-disagree-morgan-stanley-lithium-matt-fernley/
[5]https://clearpath.org/energy-101/supply-chain-for-lithium-and-critical-minerals-is-critical/#source-11, https://www.everycrsreport.com/reports/R45810.html
[6]https://www.federalregister.gov/documents/2018/05/18/2018-10667/final-list-of-critical-minerals-2018
[7] Kavanagh, Laurence, Jerome Keohane, Guiomar Garcia Cabellos, and Andrew Lloyd. 2018. “Global Lithium Sources — Industrial Use and Future in the Electric Vehicle Industry : A Review.” https://doi.org/10.3390/resources7030057.
[8] W. Tahil, The Trouble with Lithium, 2006, http://www.meridian-int-res.com/Projects/Lithium_Problem_2.pdf.
[9]https://www.albemarle.com/businesses/lithium/resources–recycling/lithium-resources
[10] Jennifer B. Dunn, Linda Gaines, John Sullivan, and Michael Q. Wang. Impact of Recycling on Cradle-to-Gate Energy Consumption and Greenhouse Gas Emissions of Automotive Lithium-Ion Batteries. Environmental Science & Technology 2012 46 (22), 12704–12710. DOI: 10.1021/es302420z
[11]https://www.albemarle.com/businesses/lithium/products/spodumene
[12]https://www.mining-technology.com/features/top-ten-biggest-lithium-mines/
[13]https://www.lithiumamericas.com/news/lithium-americas-receives-record-of-decision-for-thacker-pass
[14] https://www.lithiumamericas.com/thacker-pass/
[16]https://xw.qq.com/cmsid/20190529A0MQYN00
[17]https://www.linkedin.com/pulse/has-tesla-cracked-clay-code-xiaojing-yang/
