Lithium Supply for the EV Transition

By Kent Griffith

March 8, 2024 | Lithium is but one piece in the complex and interwoven battery supply chain. As the US seeks to onshore manufacturing, the landscape for lithium and other battery components will continue to evolve. At the recent Advanced Automotive Battery Conference (AABC), a host of speakers tackled the challenges in securing lithium for future battery industry needs.

Today, lithium comes from mine or brine. On the mining side, lithium is present in minerals such as spodumene and extracted via conventional hard rock mining technology in Australia. On the other hand, there are a variety of lithium-rich brine lakes (150–1800 ppm Li) where lithium can be evaporatively extracted. The largest of the brine sources are in South America but resources such as the Salton Sea in southern California offer a potential domestic supply. However, brine evaporation is slow (about 18 months) and requires vast networks of ponds that have lasting ecological impacts.

An alternative strategy for getting lithium out of brine waters is broadly known a direct lithium extraction. Direct lithium extraction technologies include passive ion-exchange sorbents and electrolysis membranes. Technical challenges have historically precluded the adoption of direct lithium extraction; these include slow kinetics, insufficient selectivity for lithium ions, low capacity, and poor stability. But one promise of direct lithium extraction is that it could open up new resources that are not commercially or technically viable with evaporation alone. In the face of widespread vehicle electrification and the rise of lithium-ion batteries, new efforts are underway to develop lithium resources with conventional and direct lithium extraction techniques.

Summit Nanotech, represented at AABC by Sandro Mazzini, is a direct lithium extraction company headquartered in Calgary, Alberta. Since their founding in 2018, Summit Nanotech has raised $65 million and expanded to 120 people. They are pursuing a direct lithium extraction technology that starts with brine pre-treatment, moves the brine through a sorbent that selectively captures lithium, and then reinjects the brine into its source. Summit Nanotech is scaling up its technology in Santiago but is opening a new facility in Boulder, Colorado, and is looking to gain access to North American brines.

Stefan Debruyne from SQM came to San Diego to discuss the company’s goal of becoming the most sustainable producer of lithium in the world. SQM is one of the largest lithium producers in the world today, primarily via brine evaporation within the enormous Salar de Atacama in Chile. Debruyne noted that, while mining and mineral extraction is required for the energy transition, the total material requirements including steel, aluminum, copper, graphite, nickel, silicon, lithium, and cobalt would be less than a single year of the quantity of coal mined according to data from the Energy Transitions Commission. Citing a study from ETH Zurich and Argonne National Lab models, Debruyne suggested that Salar de Atacama has the lowest carbon footprint of any lithium resource in the world. The quantity of brine and water usage per ton of lithium carbonate equivalent has decreased from 250 m3/t in 2018 to under 85 m3/t in 2022, with targets to reach 50 m3/t in 2025, an 80% reduction.

To reach water neutrality, SQM is spending $40M in annual R&D to develop direct lithium extraction as well as desalination technologies. They also invested in the French direct lithium extraction company Adionics. In an effort to increase transparency, SQM has developed advanced monitoring networks that provide publicly accessible data showing daily or monthly water and chemical metrics with 15 to 25 years of historic data as well. An important consideration is that over 11,000 people live in the Salar de Atacama with about half of these being indigenous population. Debruyne acknowledged that, while SQM is taking water downstream from these communities, the indigenous people do not believe in taking things from the earth and thus there are inherent community challenges that require dialogue and compromise.

At the local and national scale, SQM has contributed $3.27B to Chilean government entities in 2022 through a progressive value sharing model that increases the government share as a function of lithium market price, which famously spiked in 2022. SQM has consistently produced more than 30,000 metric tons per quarter since late 2021, over which time the price has fluctuated from $8/kg to $59/kg, settling down to $30/kg late last year.

Andrew Miller from Benchmark Mineral Intelligence spoke at AABC on North America’s role in the lithium-ion battery industry. While he covered the broader supply chain, Miller emphasized that the lithium demand will strongly be a function of battery cell chemistry. Of course, sodium-ion batteries do not require lithium (or might use a small amount as a dopant), whereas he reported that lithium iron phosphate (LFP), nickel-rich NMC, and solid-state batteries would range from 37.5 kg to 42 kg to 85 kg, respectively, for a relatively conservative 50 kWh battery pack. The dramatic increase in lithium for solid-state batteries stems from the use of solid electrolytes with high lithium concentration but also from lithium metal anodes with excess lithium, so it should be noted that the actual chemistry of solid-state batteries could vary and considerable effort is underway to decrease the quantity of excess lithium required if a lithium metal anode is ultimately adopted.

Taylor Shively spoke on behalf of CRU Group about the risk for oversupply, at least in the short term, of minerals such as lithium in the energy transition. Shively noted that the complexity stems from the fact that mining supply from new sources increased, EV demand slowed, and battery technologies became more efficient, which has led to a current lithium supply in excess of demand and lowered the lithium price. This will in turn lead to a contraction of mine and brine development, which will lead to another shortage in the coming years; they predict the next turning point to be around 2028. CRU sees Zimbabwean lithium supply growing more rapidly than Chile in the next five years. Like Benchmark, CRU highlighted the difference in lithium demand as a function of battery chemistry. Development of manganese-based cathodes such as LMFP and LNMO would decrease the lithium demand relative to existing LFP and NMC cathode materials. According to CRU’s analysis, the Tesla Model Y uses lithium extracted by Albemarle in Australia and Livent in Argentina, which is then refined in China and the US. This highlights one of the many challenges of decoupling battery production from China, even when the raw materials are sourced from other locations.