The world’s energy transition hinges on a readily-available supply of critical minerals such as lithium, nickel, and cobalt, with crucial challenges such as the electrification of vehicles and switching diesel generators for high-grade battery packs leading the increase in demand.
A recent mining industry report from the International Energy Agency (IEA), however, shows the harsh reality of the current supply constraints for these minerals, signalling the need to break ground on 50 new lithium mines, 60 more nickel mines, and 17 more cobalt mines by 2030. The reason is clear. Last year, lithium supply fell short of demand by more than 60,000 metric tonnes and, according to leading battery metals research firm Benchmark Mineral Intelligence, that deficit could be over 150,000 metric tonnes by the end of the decade.
Simon Clarke, CEO at American Lithium, says that the IEA’s prediction is a stark call-to-action for the mining industry, with 50 new lithium mines being many more than the current number of realistic lithium developments currently under review.
“Lithium is certainly the ‘driving’ force behind electric vehicles, but the industry is not able to keep pace with demand,” asserts Clarke. “In February, the Biden Administration announced plans to invest $2.9 billion to strengthen the battery supply chain and the production of advanced batteries. The shift to electric vehicles has only accelerated with the recent large increases in the price of gasoline – a paradigm shift is now well under way.
“As the United States and other countries look to disentangle their clean energy supply chains from China, which is currently the leading producer of refined lithium products, batteries, and other critical minerals, there is an urgency to secure supply in geopolitically safe, lithium-rich countries such as the United States and Canada, as well as South America and Europe. The conflict in Ukraine is a stark reminder of what happens when the supply of energy and other critical commodities is ‘in the hands’ of unstable or unfriendly regimes.”
However, the process of moving lithium projects from discovery to production is challenging. As Joe Lowry, president at Global Lithium LLC and known as ‘Mr. Lithium’ notes: “You can build a battery factory in two years, but it takes up to a decade to bring a lithium project online. It is not a commodity: it is a specialty chemical. Lithium is often compared with iron ore or other major commodities, and it behaves nothing like that.”
Modernising the permitting process
While entrepreneurs such as Elon Musk are encouraging greater focus on lithium mining in order to increase their profit margins, Clarke argues that few people are talking about the onerous process of permitting, which is creating a bottleneck in production in friendly regions.
In major mining jurisdictions, such as Australia and parts of Canada, permitting timelines are often shorter while still ensuring no short cuts are taken with environmental requirements or cultural issues. Under these modern and efficient permitting systems, with many processes running in parallel rather than sequentially, mines can be permitted and built far more rapidly than the seven to ten years it can take in the United States.
Clarke suggests that there should be a focus on the urgent need for domestic critical minerals production, streamlining the permitting process, and providing the additional staff required for the government agencies involved.
“Everyone wants to see the transition to this new energy paradigm, replacing internal combustion engines to reduce carbon emissions, but you are not going to do it without the necessary minerals or the mining industry. We need new mines coming online in the next few years, not in ten years’ time.
“The industry recognises the need to implement best practices on the environmental side, and I do not believe that anyone is asking for that to be compromised. The simple reality is that it is possible to both streamline permitting and make the process more efficient, while keeping environmental standards high. Supporting legislation that would reduce permitting delays, while maintaining environmental safeguards, will result in a faster mining process for these key minerals, as well as an invigorated investment in America’s mining sector.”
Alongside the dramatic increase in demand for lithium, there has also been increased scrutiny of mining and processing operations from an environmental perspective. Much of the current lithium production capacity involves extracting lithium from brines in South America, which is a source of controversy because it is particularly water- and land-intensive.
The process involves using solar evaporation from large ponds in a number of time-consuming steps, and consumes roughly 500,000 gallons of water per metric tonne of lithium produced – an anathema when you consider that many of these brine extraction ponds are based in some of the driest areas of the world, such as the Atacama Desert in South America. Additionally, refining lithium often involves chemical processes that can cause water and soil pollution without proper, up to date controls and standards, which are not always prevalent in some of the current locations where lithium is refined.
Clarke cites two American Lithium projects that avoid creating environmental concerns, thus offering a blueprint as to how lithium mining could, and should, be organised going forward.
The first is at their TLC site in Nevada, a claystone project which has no water table issues as its existing resource if above the water table and, consequently, there is no threat of groundwater contamination due to runoff. The aim is to recycle as much water as possible, and minimise usage. Additionally, the claystone’s have low levels of deleterious elements, such as mercury and arsenic, and contaminants in waste materials will be minimised as part of the process.
The second is at Falchani, Peru. Again, the entire resource is above the water table, with nearby river systems able to provide a large source of hydroelectric power to the region. As a hard rock deposit of high purity, Falchani does not have the same environmental issues around water, such as evaporation pools and the chemical processes associated with most Latin American lithium deposits, which are predominantly brine-based.
The other key benefit that Falchani enjoys, besides its large-scale potential, is its high purity. This has enabled the design of a processing flowsheet which models the production of battery-grade lithium carbonate at an anticipated grade of 99.82 per cent or above. In stark comparison, most lithium projects globally produce lithium products which then have to be refined further, requiring additional energy, water usage, and the use of chemical processes to achieve battery grade.
Accelerating lithium extraction
Clarke concludes that, as EV demand is now skyrocketing, stable countries with major lithium resources need to play a greater role in the world’s energy shift, with the aim of creating a powerful, positive feedback loop of stability, prosperity, and industry leadership. The goal should then be to convert these resources in to reserves, and add significant additional upgrading and refining outside of China to drive significant ‘new’ production.
“The United States holds about eight million metric tonnes of lithium in reserve, ranking it among the top five countries in the world, according to reports from the USGS. Yet it currently produces less than one per cent of the world’s supply at one solitary lithium brine mine in Nevada called ‘Silver Peak’, run by Albemarle Corp,” highlights Clarke.
“Lithium is the clear incumbent metal of choice in the race to use rechargeable batteries as part of future energy consumption. The paradigm shift is accelerating, and, as lithium-ion batteries are more widely used in automobiles and power storage devices, demand is accelerating exponentially. In order for us not to be held hostage by overseas regimes, it is critical to bring on additional domestic supply of raw and refined products, and to work closely with our allies who have additional sources of these critical minerals as well as the technical expertise that we lack in refining the raw materials and building the end products.”