A soft and subtle hissing noise, the quiet whisper from the needle piercing China’s lithium end user supply bubble, has battery manufacturers on alert. A global supply deficit for lithium even has China, the undisputed energy metal processing leader, frantically hunting for lithium to address domestic supply deficits. 

“China-based battery manufacturers continue to look abroad for supply as domestic reserves and available projects are inadequate to meet demand,” reports Benchmark Mineral Intelligence (BMI), forecasting a global supply deficit for lithium by 2025 with continued elevated prices. 

While China produces its own home-grown lithium, its project pipeline is limited and it faces environmental scrutiny on its egregious mining practices. China’s production of critical minerals from raw materials has come at a high cost to the environment, with its output subject to standards less exacting than what we demand in the West. 

China controls about 60 percent of the global capacity for processing raw lithium products into battery-grade chemicals, but is dependent on South America and Australia to supply high quality lithium carbonate for China’s refining. China’s domestic lithium resources are poor quality with low lithium-ion concentration and elevated levels of impurities, leaving a formidable gap between supply and demand. 

What’s holding back China’s supply of lithium?  ‘Conscious decoupling’ (reminiscent of Gwenyth Paltrow’s separation from Chris Martin) has taken root with Western nations and manufacturers steadfastly decoupling from China. This significant geopolitical awakening has resulted in manufacturers on red alert about dependency on lithium supply chains emanating from China. 

When President Biden signed the Inflation Reduction Act (IRA) into law in August 2022, clean energy leaders recognized that this was the largest federal investment in alternative energy and sustainability in American history, allocating $10 billion to support construction of clean energy tech factories, and retrofitting existing factories to make clean energy equipment and components. President Biden’s Bipartisan Infrastructure Law includes $6 billion in incentives to support R&D and production of batteries in the US, as well as supporting the creation of a domestic supply chain.

Amid the transition to more renewable sources of energy, Nevada Gov. Joe Lombardo’s economic development office introduced a five-year strategic plan that focuses on expanding the state’s electric vehicle production, technological innovation, and new infrastructure to make the ‘Silver State’ the epicentre of lithium mining in North America. 

America’s road to energy metal independence is long and full of hurdles, both on the supply and processing side. Although the United States holds about 8 million metric tons of lithium in reserve — ranking it among the top five countries in the world – today only a fraction of the world’s supply is produced at one solitary lithium brine mine in Nevada.

As the United States steps up its efforts to process lithium into battery-grade chemicals that can be transformed into the batteries, domestic processing plants are still rare in North America; China still controls most of the battery supply chain and the processing of all key minerals including lithium, cobalt and nickel, as well as the batteries themselves.

With claystone exploration representing an entirely new means of extracting lithium from vast untapped claystone-hosted supplies in the U.S., the latest deals — along with the State of Nevada and US Dept of Energy’s financial commitment — clearly demonstrate the viability of lithium-bearing clays as a lithium source. 

With the heightened need for the U.S. to source as much sustainable, “home-made” lithium as quickly as possible, Nevada is poised to play the starring role in the country’s lithium mining boom. Nevada’s natural resources and supportive policies to bring new mines online ensure its place in history as the leader in America’s secure and sustainable new energy paradigm. 

Graham Harris is Chairman and Director of Surge Battery Metals Inc. (TSX.V:NILI), a pure-play lithium company focused on its flagship project Nevada North Lithium Project in Elko County. He was previously Founder, Chair and Director of Millennial Lithium Corp., which was acquired by Lithium Americas for $490M. Based in Vancouver, BC, Canada he can be reached at: [email protected].

Surge Battery Metals | surgebatterymetals.com