To support automakers’ plans for increased electric vehicle (EV) production, battery production must increase as well. As a result, demand for lithium – a critical raw material needed to make those batteries – is projected to increase 15% to 25% annually.
"By 2025, some estimates project that global demand for lithium carbonate equivalent (LCE) will hit 600,000 tons, triple 2018’s volume."S&P Global
Lithium-ion batteries are the current default energy storage technology powering smart phones, tablets, laptop computers, digital cameras, and even cordless home appliances like robotic vacuum cleaners. As the lightest metal in the periodic table, lithium has the highest electrochemical potential, which makes it perfect for batteries. Mining for lithium, however, has high financial and environmental costs. The challenge for mining companies, therefore, is to produce more lithium at lower cost with lower impacts and the highest safety.
Miners also face technical challenges as well, because not all lithium is equal. Miners produce lithium with specific chemical properties, catered to the needs of each buyer. “As the EV industry evolves, battery requirements are changing to address greater safety needs, range specifications, and energy density,” Morgan Stanley analyst Martinez de Olcoz wrote in a report. The difference, he said, "has raised questions about the ability of lithium producers to keep up with the fast-changing demand profile.”
THE LITHIUM CONUNDRUM
Most commercial lithium comes from two major sources: underground liquid brine deposits known as salars, and mineral ore deposits. Most salars are located in southwestern South America, China and Tibet. These lithium brine deposits represent about 66% of global lithium carbonate resources.
Miners drill underground to pump the brine to the surface, creating vast lakes of brine that are allowed to evaporate in the sun over a period of months or years. As the water evaporates, it leaves behind a concentration of silvery lithium and other minerals, including potassium and sodium. This residue is then pumped to a lithium recovery facility for extraction.
At the lithium recovery stage, a series of steps pre-treat and purify the lithium to battery-grade quality. Once complete, the remaining brine solution is returned to the underground reservoir.
Attempts to increase production volumes using this process have prompted concern from regulatory officials and environmental groups, however. The Chilean government, for example, recently pressured mining giants Albemarle and SQM to shelve expansion plans because of the method’s environmental impact.
"The concern lies with the use of large amounts of water," said Daniel Saxton, a London-based energy and chemicals industry analyst for Nexant. When that water evaporates, Saxton said, it is no longer available to local wildlife and residents. "More focus has thus been on technologies that reduce the usage of water by removing the solar evaporation step in a process known as 'direct extraction.'"
NEW ENTRANTS APPLY SCIENTIFIC APPROACHES
While long-term demand for lithium appears certain, fluctuating demand cycles make it difficult to sustain research programs. In 2018, for example, news of increased EV production sparked market speculation. Miners overproduced, quickly outpacing EV production demand, which caused prices to plunge. As a result, investments in new extraction technologies slowed or were abandoned, and mining companies returned to proven methods until prices improve.
"The technology wild card is always going to be a factor" in applying new technologies on a global scale, said Chris Berry, a mining industry analyst with New York City-based House Mountain Partners. "In a lab it works. The challenge is, of course, none of these processes have been scaled up."
Meanwhile, however, all kinds of companies and startups continue to move the science forward. These companies include Eramet, Rosatom, Adionics, Lilac Solutions, Bacanora, POSCO, Tenova Bateman and K-UTEC, all of which are developing novel extraction and process technologies for lithium.
The common thread? Saxton highlights the companies’ use of digitalization, automation and computer simulation to develop, test, optimize and implement new extraction processes.
Mining and metallurgy company Eramet, for example, in 2019 launched the commercial development phase of its novel processing facility at the Centenario-Ratones salar in the Andes of northwestern Argentina; construction of the commercial plant is expected to be complete by mid-2021.
"3D modeling is intensively used for the resource assessment of the deposit and for the industrial plant design during the engineering studies," said Hervé Montegu, Eramet's senior vice president of Lithium Activities. "A process simulation tool has been developed for the direct lithium extraction step that enables us to quickly find the best set of parameters to optimize process efficiency."
Early results are impressive. Eramet's two-phase direct extraction process, for example, achieves an 85% yield with just a few days of processing, compared with standard evaporation methods, which yield 50% over 18 months. The process, developed in collaboration with IFP Énergies Nouvelles (the French Institute of Petroleum) and industrial process engineering consultant Seprosys, also reduces water consumption by recycling 60% more water than traditional methods.
"A process simulation tool has been developed for the direct lithium extraction step that enables us to quickly find the best set of parameters to optimize process efficiency."Hervé Montegu, senior vice president of Lithium Activities, Eramet
"Companies operating today are facing big challenges from regulation authorities all over the world to be more technically efficient and more environmentally friendly," Montegu said. "Our process is one of the most environmentally friendly and resource-management efficient, and we have long ago established close and transparent relationships with all stakeholders in [Argentina’s] Salta province and around the area of our activity."
EVOLVING BATTERY TECHNOLOGY
Along with improved extraction processes, researchers are working to develop more sustainable alternatives to lithium carbonate. "Development has focused on lithium hydroxide production over lithium carbonate production as the preferred battery chemistry for automotive applications," Nexant analyst Saxton said. Lithium hydroxide is favored for newer cathode batteries being developed because of higher nickel chemistries. However, lithium hydroxide requires an extra conversion step from brine sourced carbonate, and that carries a price premium.
Eramet, as well as Lepidico, Nemaska and Rosatom, are working on lithium hydroxide production for new battery designs, Montegu said. "The battery industry is a pillar of the energy transition," he said, adding that increased lithium-ion battery recycling also will be a key component of lithium supply strategies in the future.
Eramet says it intends to secure enough lithium supply for the next 50 years to ensure the company's position with future EV production as other companies, governments and communities around the world re-align for an energy transformation. How that shift will play out over the next several years is hard to predict.
“No one, whether you’re an investor, a policy maker or an automotive manufacturer, has ever seen this much interest, this much stress along the lithium-ion supply chain,” analyst Berry said. That stress comes from a great paradox in lithium mining today, Berry said. On one hand, projected lithium demand is expected to grow ten-fold by 2031, which reflects profound transformations reshaping global energy and manufacturing sectors, including sustainable processes and 3D technologies. On the other hand, market volatility tends to choke short-term capital investments in mining technologies. Consequently, patience and strategic thinking will become more important than ever, Berry said, because "societal, economic, and national security implications are simply too significant to ignore."