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ISSN 2753-7757 (Online)

Rare metals: the battery conundrum


8 min read

Aerial shot over opencast mining operations Photo: Pexels
The mining of cobalt is largely constrained to the Democratic Republic of the Congo and is complicated by unethical and unsafe labour practices

Photo: Pexels

Decarbonising both road transport and electricity generation depends on producing an ever-increasing number of batteries. The best of these is currently the lithium-ion battery which contains large quantities of lithium and cobalt, whose supply is struggling to keep pace with growing demand. Charlie Bush reports on the situation and potential solutions to this issue.

Although electric vehicles (EVs) have 90% fewer moving parts than cars with internal combustion engines, on average they are around 340 kg heavier, according to International Energy Agency (IEA) data. This is due to the need for both a battery and one or more motors. These necessary components mean that EVs contain up to six times as many minerals as petrol equivalents, typically including around 9 kg of lithium and 13 kg of rare cobalt. But, the explosion in EV sales has led to a supply bottleneck and spiralling prices as the production of these rare metals struggles to align with demand.


In recent years, the long-term cost of supplying grid electricity from lithium-ion batteries has also plummeted, vastly improving their appeal as a cost-competitive alternative to natural gas-fired power plants. The World Energy Council says that lithium-ion batteries represent over 90% of the world’s grid battery storage systems and key energy markets are looking to expand their battery storage capacity.


Besides EVs and grid-scale storage, lithium-ion batteries also supply power to virtually all electronic devices, including mobile phones, laptops and power tools. Lithium-ion batteries most commonly use cobalt as electrodes because this design has one of the highest energy densities of any battery technology today, resulting in a far longer battery life. They can be recharged hundreds of times, charge faster and avoid issues such as periodic discharge maintenance and memory issues.


Further increasing the pressure on producing enough lithium and therefore raising its price for EV manufacturers is the fact it is also used in the production of ceramics and glasses, greases, metallurgical powders and polymers, and in other industrial processes. In 2015, less than 30% of the demand for this element was for batteries. By 2030, it is anticipated that this will increase to 95%.


Concern for the supply of rare metals
It is evident that the demand for rare metals is not going away any time soon. Multiple industries are vying for the Earth’s limited lithium and cobalt deposits. Many stakeholders are understandably concerned that supply will not be able to keep up.


In April this year, lithium and mining expert Joe Lowry, nicknamed ‘Mr Lithium’, told Bloomberg: ‘In the next two years, even though there will be significant growth in supply, it will be less than demand, so the gap will just continue to grow.’


In the same month, Elon Musk tweeted about the ‘insane’ price of lithium, blaming it on the slow pace of extraction and refinement. He even suggested that Tesla might have to begin its own production operations unless the situation changes.


The rise of EVs
With global light duty EV sales anticipated by S&P Global Platts Analytics to rise from 6.3mn units in 2021 to 26.8mn units in 2030, the supply of lithium and cobalt will need to expand. Countries around the world, including the UK, Canada, India, Chile, Thailand and the EU, have committed to or have made plans to ban the sale of new petrol and diesel cars from 2035.


Likewise, car manufacturers Ford, General Motors, Mercedes-Benz, Volvo, Jaguar Land Rover and Chinese automaker BYD, among others, have pledged to phase out sales of internal combustion engine vehicles in ‘leading markets’ by 2035 and worldwide by 2040. BloombergNEF predicts that by 2040 two-thirds of all passenger vehicle sales will be electric. EV dominance over the automotive industry within the next 15–20 years appears inevitable.


With some 1.4bn vehicles in the world right now, of which just 20mn are electric, this transition to EV supremacy will require a huge uptake in battery production. A 2021 IEA report concludes that we will need a six-fold increase in mineral requirements to achieve net zero carbon emissions by 2050. In this scenario, lithium demand would rise by 90%. Meanwhile, in the short term, cobalt demand for transportation is anticipated to grow by around six times from 2020 levels to 2025.


Sources of lithium
There is only a finite quantity of lithium and cobalt on Earth. But the current challenges are that extracting these metals often involves harmful sourcing, increases greenhouse gas emissions, and mining currently only takes place in a small handful of countries.


Most known reserves of lithium are concentrated in South America and Australia. Western Australia supplies 60% of the world’s lithium from just five mines. The majority of the remainder comes from salt flats in Argentina, Bolivia and Chile, and mines in China. According to McKinsey, Australia, Latin America and China were responsible for 98% of lithium production in 2020.


The present raw material bottleneck has been caused in part by a recent diminished investor appetite for new mining projects due to the industry’s poor environmental, social and governance (ESG) reputation. But a number of recently proposed projects could introduce more lithium mines elsewhere, including in Europe, the US, Russia and other members of the Commonwealth of Independent States.


However, as Musk alluded to in his tweet, extracting lithium is not simple. It necessitates either mining the ore before separating the metal, or pumping underground deposits of water to the surface so the metal can be extracted from pools. In total, it takes around a decade to bring a lithium project to completion.


The current challenges are that extracting these metals often involves harmful sourcing, increases greenhouse gas emissions, and mining currently only takes place in a small handful of countries.


Sources of cobalt
The supply of cobalt is even more restricted. Around 70% of the blueish-white metal comes from the Democratic Republic of Congo (DRC), a country with weak governance, numerous armed groups, poor infrastructure and in which almost three quarters of the population live on less than $1.9/d. Unethical and unsafe labour practices in the mining of cobalt in the DRC have been well documented, causing another issue for EV manufacturers.


Much smaller quantities of cobalt are also mined in Russia, Australia, the Philippines, Canada, Cuba, Papua New Guinea and China. One problem with expanding this list, besides limited reserves, is that cobalt is often mined as a secondary material from mixed ores of nickel and copper. As such, the supply is tied to these other commodities and the opening of new mines solely for cobalt is expensive.


The refining of cobalt is highly concentrated in China, accounting for 66% of global output. Finland is second, with just 10%. New cobalt refining projects are underway across the globe, particularly in Australia, but it will take years to significantly reduce China’s hegemony. Moreover, ultimately, refining countries depend on the unreliable imported feedstock from the DRC. A lack of transparency continues to plague the cobalt market and supply chain.


Alternative solutions
One key solution to the problem of producing sufficient lithium-ion batteries is to reduce the amount of lithium and cobalt contained in them. Many battery and EV producers are seeking to find alternatives to cobalt and batteries are already being made without it. However, these, such as lithium iron phosphate (LFP) batteries and sodium ion batteries, currently have a lower energy density when compared to their lithium-ion counterparts.


In the long-term the LFP battery could solve the problem of unreliable and diminishing cobalt supplies, but for the time being, decarbonising road transport and electricity generation depends upon obtaining sufficient cobalt at reasonable prices.


Recycle the present, save the future
Recycling must form the other part of the solution. Metals by nature can be reused, recycled, melted down and reformed, over and over again, without losing their characteristics.


Creating a circular economy for lithium-ion batteries will reduce the associated emissions from mineral development and reduce or delay the need for expanding mining operations. Both pyrometallurgical or hydrometallurgical processes can be used and its possible to recover a large proportion, or even all the lithium contained in end-of-life batteries. It is expected that by 2030 this could account for just over 6% of the total lithium supply.


At present, there is some recycling of lithium-ion batteries. Virtually all are produced in China, Japan and South Korea and recycling capabilities are expanding in these countries. Guangdong Brunp - a subsidiary of CATL, can recycle 120,000 tonnes of EV batteries annually and recover most of the lithium, cobalt and nickel, according to a spokesperson. That is comparable to the materials needed for over 200,000 cars.


China’s government has already enacted policies to encourage recycling. It provides financial and regulatory incentives for battery companies that use recycling rather than importing new metals. The European Commission is planning to phase in strict battery-recycling requirements from 2023, but the reality of a domestic recycling industry remains uncertain.


Various start-ups in North America claim they can recover the majority of metals from batteries at costs competitive with those of mining them, largely due to the cost advantage from reclaiming cobalt. President Biden’s administration wants to create a domestic EV battery-manufacturing industry with the support of recycling, but it has yet to propose regulations beyond classifying batteries as hazardous waste that requires safe disposal.


Regulations are undoubtedly necessary to stimulate widespread recycling.


The economics of recycling batteries
Besides enforcing recycling through regulations, widespread adoption requires a more attractive economic incentive. Cobalt is the main reason why recycling lithium-ion batteries is economical. The other materials contained in them, especially lithium, are currently cheaper to mine than to recycle. As such, one unintended problem with making batteries without cobalt is that it reduces the incentive to recycle them.


At present, recycling consumer electronics is more attractive economically than EV batteries due to their higher cobalt content. However, the difficulty of collecting mobile phones and laptops en masse has prevented this from taking off at scale.


Meanwhile, the quantity of lithium and cobalt being thrown away is rising. The UN reports that volumes of e-waste grew by 21% between 2014 and 2019, but in 2019 just 17.4% of that waste was recycled. In part this is because small electronic devices such as phones and smart watches have tiny circuit boards that are extensively coated in adhesives. Enforcing product design with recycling at their end of life in mind could make recycling a viable option.


Cobalt recycling from batteries is already fast-growing and becoming an important source of cobalt feedstock to the global supply chain. Recycling cannot by itself eliminate the need for new mining of materials in the short term as demand continues to rise, but the IEA estimates that the recycling of lithium and cobalt, along with nickel and copper, from spent batteries could, by 2040, ‘reduce combined primary supply requirements for these minerals by around 10%’. Eventually, a truly circular model could be in place that reduces the need to mine new material to nearly zero.


The full picture
Recycling is important, but it is just one way to approach the mineral shortage.


The first step towards dealing with this issue conclusively is for manufacturers to slash the amounts of these scarce, expensive or problematic materials they need for their batteries and circuit boards. They also need to invest more heavily in research that will find alternative technologies that can substitute such materials for less environmentally and socially harmful substances.


Batteries represent the powerhouse of the future, but we need to ensure that we are using their rare materials in a sensible and sustainable way to avoid a future energy crisis.