Insufficient raw materials: lithium bottleneck slows 2030 Stromer

The German Commodities Agency predicts a lithium shortage by 2030, heavy dependence on Australia and Chile, and insufficient recycling potential for old electric car batteries.

There is no electromobility without batteries, not even with fuel cell cars. Because they also need rechargeable batteries to provide enough power when the unit requires high performance. The German Commodities Agency (DERA) has now released a forecast showing that there will be a shortage of lithium on the world market starting in 2030.


According to DERA, a demand for lithium of between 316,000 tons and 558,800 tons of lithium is expected in 2030. In 2020, world production was around 82,000 tons, of which only around 50-60% met the high requirements and degrees of purity for battery manufacturing. By 2030, DERA experts predict that the battery sector will account for 90 percent.



Production capacity has to increase sevenfold

The only way to meet the strong demand is to increase production capacities. These are expected to increase by a factor of four to seven over the next few years to cover anticipated demand. However, this cannot be done by the mining sector alone. “Even if all the projects currently planned and under construction are implemented on schedule and we assume an average demand growth, we will not have enough lithium to cover the projected global demand in 2030,” explains study author Michael Schmidt of the German agency. for natural resources.

According to Schmidt, nearly three-quarters of global mining production currently comes from Australia (49% in 2020) and Chile (22% in 2020). Countries like Argentina (7.5% in 2018) and China (17% in 2020) provide significantly lower results. In Australia, the alkali metal is extracted from minerals, in Chile it is washed away from the brine of salt lakes by chemical processes. In both cases serious interventions of nature are needed. This is why many companies are looking to increase secondary funding, particularly through innovative recycling processes. At the moment, however, there aren’t much more than a few pilot projects for battery recycling.



Europe and its new battery industry

One of the fundamental problems identified by Schmidt and his colleagues is that cell production capacities of up to 1,300 gigawatt hours are currently being built in Europe, at least at the design stage. In terms of primary funding, however, Europe has its pants down. Despite some deposits, for example in the Erzgebirge or the Rheingraben, lithium is currently not mined in Europe. Only in Portugal is significant lithium mined. With a market share of one percent and 900 tonnes of lithium, southern Europeans were at the bottom of the world rankings in 2020. This creates huge import dependencies for precursors to cell production.


But even if that were to change, according to DERA calculations, Europe alone would be able to cover only 27 to 34 per cent of its needs. Recycling, too, would only meet three to ten percent of the expected demand for 2030. At best, just over half would therefore have to be imported. According to the DERA study, in order to keep import dependency as low as possible and also to reduce the CO2 footprint associated with transporting materials from Australia and Chile, mining capacities in Europe should be expanded rapidly.



BMW buys lithium and cobalt itself from the manufacturers

To at least contain the economic and ethical risks, car manufacturers have now put forward some ideas. Daimler, VW and BASF have agreed to buy lithium only from transparent sources. The same is also true for BMW. To ensure this, BMW, for example, buys lithium and cobalt for its current generation of batteries (Gen 5) and then makes them available to battery suppliers such as CATL, Samsung SDI and from 2024 also Northvolt. BMW will purchase cobalt directly from Morocco over the next 5 years. According to a spokesperson for BMW, the lithium is obtained from two suppliers with multi-year contracts.


Here, BMW sources the lithium itself: the BMW iX3 is the first model with Gen 5 batteries

BMW iX3_Electro-SUV


BMW

In 2019, BMW signed a five-year contract with Jiangxi-based Chinese lithium supplier Gangfeng Lithium, with an expected volume of 540 million euros at the time. Lithium does not come from China, but from Australia. Even then, BMW said it could cover 100 percent of its lithium hydroxide needs. Lithium hydroxide is one of the main precursors from which the cathodes of lithium ion batteries are made. Since the beginning of this year, BMW has also purchased lithium from Argentina, where the raw material is extracted from brine from salt lakes, according to a BMW spokesperson. In doing so, BMW has also ensured the increased requirements of Gen Five cells used in iX3, iX, i4, i7 and plug-in hybrid vehicles. In addition, BMW is technologically, geographically and geopolitically more independent of individual suppliers, the company explains.



Stellantis takes a stake in the lithium promoter

The Franco-Italian-American carmaker Stellantis, which in addition to Fiat and Alfa Romeo also owns Opel, Peugeot, Ram and Citroen, has taken a different approach. Just a few days ago it was announced that they would take a stake in the German-Australian lithium producer Vulcan Energy Resources. After all, the automaker has secured eight percent for 50 million euros. As early as November 2021, up to 99,000 tons of lithium hydroxide were ordered from Vulcan Energy Resources over a five-year period. With the participation, Stellantis extended an existing withdrawal agreement until 2035.



The peculiarity of this agreement is neither the quantity of lithium hydroxide nor the duration of the contract, which in particular is unusually long. Vulcan Energy’s unique selling proposition is that the company wants to extract its lithium CO2 in a neutral way by exploiting lithium deposits in the Upper Rhine Graben. According to the company founded in Karlsruhe, tens of thousands of tons of lithium are hidden in the deep salty groundwater. Overall, the amount should be sufficient for up to 400 million electric cars. Deep, 165-degree warm groundwater must be pumped (powered by green electricity) from layers of the earth up to four kilometers deep. On the surface, it drives a steam turbine and then supplies electricity to the extraction plant, where the alkali metal must be separated from the other components. The thermal water used should then flow back into its natural reservoir in a closed circulatory system. This is the theory.



So far there are only ads

The problem: The young company still has a few pages of business plans, PowerPoint charts and a few million investors to show. Not a single gram of lithium has yet been extracted from groundwater on an industrial scale. Because the pilot plant for the project has not yet gone into operation. Moreover, a geothermal power plant in Pfalzwerke has already been purchased for 31.5 million euros, with which the pilot plant will come into operation. From 2024, Vulcan Energy wants to produce 15,000 tons of lithium hydroxide per year and by 2025 the annual capacity will have to be increased to 40,000 tons if all goes well.


But the possibilities aren’t bad. At least Stellantis is not the only producer to join the young company. Renault has also pledged to purchase between 4,333 and 5,333 tonnes per year for six years starting in 2026. VW has already entered into agreements with Vulcan Energy Resources to supply its cell factories with coveted cathode material from southwestern Europe. Germany.


For example, you can see how the battery is made of lithium ore from Australia or the Ore Mountains in the image gallery above.


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Conclusion

If you compare the demand forecast data (at least 316,000 tons for 2030) with previous production volumes (100,000 tons expected for 2021), it becomes clear how big the task is. It is therefore all the more important that funding projects like Vulcan Energy Resources and the topic of battery recycling finally pick up speed. Because the lithium-ion battery, which forms the backbone of both battery-powered cars and fuel cell vehicles, bears the coveted alkali metal name for a reason. That’s why it doesn’t work without lithium.

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