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Are Mining Companies Jumping the Gun on Lithium?

Lithium has skyrocketed on the back of huge demand created by the battery industry. While lithium demand shows few signs of slowing down, battery technology is changing at an enormous pace. Projects around the world are exploring alternatives to lithium, promising that a breakthrough is just around the corner. We ask the question: should miners be going all in for lithium?

Mining LithiumThe lithium rush

Global efforts to reduce emissions have driven demand for technology such as electric vehicles, which has increased demand for the lithium needed for batteries.

According to analysis from Benchmark Minerals, demand for lithium ion batteries has tripled since 2015 to 180 gigawatt hours (GWh), reaching the levels initially predicted for 2020.

Thailand-based renewable energy company Energy Absolute announced plans in 2018 to build a 50GWh lithium-ion battery plant, which is expected to be fully completed by July 2020. India is also boosting its production of lithium batteries by investing $4bn in four lithium production plants.

This increased demand has caused mining companies to invest heavily in lithium mining projects around the world, hoping to capitalise on a global shift to renewable technologies. Since 2017, six lithium mines have opened in Australia, and some of the world’s largest lithium mines are being developed to ensure a constant supply of the metal in the future.

However, these investments take time and money, and while these mines are being developed battery technology is advancing in ways that may leave the lithium market behind.

Bo Nomark, industrial strategy executive at European innovation company InnoEnergy, says: “Lithium demand will certainly go up with increased battery production. But demand growth will be dampened by the increased time to build new factories and then get them up and running to full capacity.

“Based on current plans, it is expected that lithium supply will keep up with demand for the next five years. There is a growing concern for after that, that there will be an undersupply to the battery market.”

Alternatives: should lithium be looking over its shoulder?

Benchmark also predicts that lithium demand will reach 2.2 million tonnes by 2030, but lithium supply is only forecast to reach 1.67 million tonnes, leaving a significant deficit. To compensate for this material deficit, a number of mining and energy companies have invested in alternatives to lithium to power the battery boom.

Zinc’s abundant supply, fundamental stability and low cost make it an attractive alternative to lithium, and although efforts to make it commercially viable have traditionally been few and far between, Arizona-based Nant Energy have managed to power 110 villages in Africa and Asia over seven years with their zinc-based energy storage system.

NantEnergy’s zinc-air battery system replaces a traditional second electrode with one that “breathes air”, using oxygen from the atmosphere to extract power from zinc. The company also developed a technique to allow zinc to retain its charge for extended periods of time, solving the usual problem of limited reusability for zinc and zinc-air batteries.

However, while it is more abundant than lithium, zinc reserves are only expected to last around 25 years, so its use as a long-term alternative to lithium is not entirely unproblematic.

Sodium-sulphur batteries are another alternative to lithium, and have already seen significant use at scale in sites around the world. Sodium-sulphur batteries use readily-available components and have a longer lifespan than their lithium-ion counterparts, with lifetimes of around 15 years compared to the two or three years expected from lithium batteries.

The main drawbacks of sodium-sulphur batteries are the volatility of both reactants and the high operating temperatures needed.

Nickel is another metal that shows promise as an alternative to lithium. In October 2018, Russian nickel mining company Norlisk and German chemicals company BASF established a strategic cooperation to meet demand for batteries, and Norilsk chief operating officer Sergey Dyachenko told MINE Magazine that the company “believe[s] in nickel as a substitute for lithium” despite BASF’s existing investment in lithium-ion batteries.

Nickel-cadmium batteries also have the price advantage over their lithium counterparts, with lithium batteries costing around 40% more to produce according to Chinese lithium company BSLBATT.

Developing batteries with unconventional materials

Other battery technologies are being developed that eschew conventional minerals entirely, using more readily-available materials to power batteries. One example of this is hydrogen fuel cells, which use an incredibly abundant (albeit volatile) gas and have an energy-to-weight ratio that is ten times greater than their lithium-ion counterparts.

Companies such as Aquion Energy and Aqua Battery are also investing in batteries that use saltwater as a critical component, avoiding the concerns with availability and volatility associated with other alternatives entirely. Although these batteries are still in early development phases, if the technology is commercially viable it could provide an attractive solution to problems with supply and demand of critical minerals such as lithium.

Discussing these alternatives, Nomark says: “The main limitation today is that installed base is limited as well as production capacity. This also results in cost levels that have problems to compete with the high volume/low cost lithium batteries.

“Yet there are advantages, such as, scalability, high cycling rate, that are important for stationary batteries, while price will also come down with volumes.

“The independence from critical minerals in lithium batteries will also be increasingly important. Lithium batteries have higher energy density and are thus the preferred choice for mobile applications.”

The future of lithium

With alternatives to lithium being developed for battery technology and the demand for electric vehicles skyrocketing in recent years, mining companies will need to change their approaches to lithium mining to ensure their investment in the metal will pay off in the long term.

Disruptive lithium mining projects are one way to ensure the metal has a place in future battery technologies. According to Benchmark the lithium mining industry has seen a “freeze” in capacity expansions, and “bigger fish” will need to enter the market to change the way it operates.

One company Benchmark suggests could disrupt the lithium market is Rio Tinto, which in October 2019 had a “eureka moment” when it discovered a significant quantity of high-grade lithium from waste rock at its boron mines in California. From this discovery, the Rio Tinto team could innovate within the lithium market and Benchmark suggests that the company could shift the market’s thinking from “short term increments to long term big expansions, big thinking to keep pace with electric vehicle and battery expansions.”

Another solution to the lithium deficit is greater investments in recycling projects. According to a report published by the Australian Commonwealth Scientific and Industrial Research Organisation (CSIRO) in 2018 only 2% of Australia’s annual 3,300 tonnes of lithium-ion battery waste is recycled, a statistic that is largely mirrored around the world.

Recycling and recovery challenges

There are, however, challenges associated with recycling lithium from batteries. The recycling process comes with a number of health and safety concerns associated with the volatile mineral components that will need to be considered if recycling is done at scale.

Recovering materials from waste is also challenging due to the low concentrations of the critical minerals in waste electrical equipment, and recovered materials are often of lower quality than mined materials, limiting the effectiveness of recycling as an alternative to mining.

Technological developments could give the lithium battery industry another lease on life. Offering his predictions, Nomark says: “The most exciting development is the high activity and buzz around development of cost/performance in batteries! In the last five years the cost of batteries for EVs has dropped by a factor of three, while power density has increased by the same factor.

“The development will not go as fast in the next five years, but we expect to see a significant improvement in cost and performance with the current technologies. Furthermore, there are new technologies under development promising even higher performance.

“The most talked about technology is solid state batteries, which have the potential to improve the cost performance of lithium batteries far beyond today’s technologies. Taking all possibilities into account, it is not unlikely that before 2030 we will see another improvement in cost and energy density with a factor of three.”

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