Rising Lithium Prices Fuel EV Anxiety
As the price of lithium has skyrocketed over 400 percent in the past year, the demand for lithium-ion batteries is more intense than ever. Lithium’s moniker is ‘white petroleum’ due to dramatic need for supplies from the rise of battery giga-factories, electric vehicles, powerwalls and energy storage businesses. Battery makers are budgeting for the rising cost of lithium (a metal crucial to the batteries for electric cars) as they expand their production and over the coming years.
“The demand for lithium-ion batteries is higher than ever,” said Chris Berry, President and strategic metal consultant at House Mountain Partners. “Lithium’s lightness helps it store a lot of energy, which is very useful for electronics.” As the price has jumped to nearly $50,000 per ton, some battery manufacturers are raising prices.
The clean energy revolution is well underway with automakers worldwide as the manufacturers grabble with microchip shortages and changing demand from customers. Volvo Cars, for example, has committed to putting one million electrified cars on the road by 2025, with 50 percent of sales volume to be fully electric. France plans to end sales of all gas and diesel cars by 2040, with Germany mandating that all new cars be electric by 2030.
The quest for EV manufacturers to get access to high grade lithium is heated. As the United States and other countries look to disentangle their clean energy supply chains from China - currently the leading lithium producer - there’s an urgency to look towards safe, geopolitically friendly lithium-rich countries such as Chile.
Current exploration for lithium in Chile has been concentrated in the Salar de Atacama, the largest salt flat in the country, and Salar de Maricunga, together comprising a property portfolio consisting of 68,800 hectares.
Moving from Discovery to Production
The process of turning lithium into the chemicals that power batteries is not easy. Refining lithium involves chemical processes that, without proper controls, can cause water and soil pollution. Additionally, it can take many years for a new lithium-mining operation to produce battery-grade materials.
While the production of lithium is essential to technology, it can be environmentally damaging. With the primary sources of lithium being hard rock deposits and Salar brines, lithium processing through conventional tactics such as evaporation ponds is inefficient, producing less than half of the lithium being extracted. Other challenges lithium miners face include pollution, high-water use and land use changes. Therefore, as EV makers are sourcing lithium, they should be mindful that their production sources are committed to environmentally sustainable mining practices.
Organizations like Initiative for Responsible Mining Assurance and Responsible Minerals Initiative provide the tools and resources focused on minerals supply chain due diligence to produce a comprehensive standard for all mined materials to ensure that EV makers vehicles are truly ‘clean-energy’ vehicles.
Lithium mining companies need to be responsible corporate citizens committed to implementing best environmental practices at all levels of their operations. That includes building projects together with the communities near operations, protecting nature, and using the best available techniques and technologies to develop assets. There is no question that the success of a lithium mining business is tied to the success and stability of the company’s host communities and its reputation as a responsible partner in resource development.
Our collective future requires clean air, and our pathway to that environmentally-sound planet demands a global support of economically sound alternative energy plans. A ‘bet’ on clean energy through investments in renewable energy is a wager that will deliver a cleaner planet that will thrive for current and future generations.
Based in Vancouver, BC, Henk Van Alphen is CEO of Wealth Minerals, (WML - TSX.V) whose main focus is the acquisition and development of lithium projects in South America. He can be reached at: [email protected].
Wealth Minerals | wealthminerals.com
Author: Henk Van Alphen
Volume: 2022 May/June