Sales of electric vehicles, including hybrids, grew by nearly a quarter last year. And demand is expected to grow even more as state governments incentivize electric vehicles.
The problem, experts say, is that demand will outpace global supplies of lithium, a key element in the batteries that power EVs. A recent report by Wood Mackenzie predicts that the supply crunch will come within the next decade.
Gavin Montgomery is the research director of battery raw materials for Wood Mackenzie.
He said when the world gets to about 10 or 15 percent of car sales being electric vehicles we'll start to see a shortage of not only lithium but nickel and cobalt, which are both used in batteries.
“Lithium-ion is sort of the best we got at the moment,” Montgomery said.
The industry is working on new battery technology, but right now, that technology is too expensive and years away from being commercialized, he said.
Nevada is home to North America’s only mine that’s currently producing lithium. The Silver Peak mine in Esmerelda County was started in the 60s. For the past several decades, the owner of the mine, Albemarle, has been mining lithium mostly for pharmaceutical uses. It is used in medications to treat bipolar disorder.
Now, the mineral is being shipped to another company to be processed into the materials needed for lithium-ion batteries.
David Ryan is the vice president of corporate strategy and investor relations for Albemarle. He said lithium isn't rare but it is tough to find a place where it is in high enough quality and concentration to be worth the money and effort to extract it.
Ryan doesn't believe there will be a shortage of lithium as electric vehicle sales climb but he is concerned about the process of converting the mineral.
“Probably not a shortage of lithium, what has to be managed and what has to be constructed is the conversion of that lithium into the products that are needed to go into these batteries,” he said.
While electric vehicles will help address climate change, there are concerns that increased mining will erase any progress made.
Karen Narwold is the executive vice president and chief administration officer at Albemarle. She said the Silver Peak mine has a low impact on the environment.
“It’s a very sustainable energy-efficient process,” she said.
At the Silver Peak mine, the lithium is trapped in underground brine. The company pumps the brine to the surface and lets it dry out in evaporation ponds.
No chemicals are used to extract the mineral. Narwold said the mine produces about 5,000 to 7,000 lithium carbonate equivalents units each year and globally the demand is around 300,000 units.
Meanwhile, an ambitious new project set to open in Humboldt County could produce as much as a quarter of the world’s supply, the mine owners say.
“It’s possible that this deposit can produce the entire U.S. demand in the future,” said Alexi Zawadzki, the CEO of Lithium Nevada, the firm opening the new mine.
Zawadzki said the lithium deposit was found decades ago but wasn't developed because there was no use for lithium. Now, that demand has exploded.
In fact, he is not concerned about a shortage of lithium. Instead, he's concerned about a shortage of people who know how to convert it.
“That’s where the shortage is. I don’t think it's in finding the materials. It’s in actually getting those materials out of the ground and made into products that the industry requires,” he said.
Zawadzki said the mine in Humboldt County will be different from Silver Peak in that it will take the raw lithium and convert it into the products needed for batteries on-site.
And mine owners are focused on making sure the mine has a very little environmental impact.
“Our goal here is to make one of the most environmentally sustainable lithium products in the world,” Zawadzki said.
He said the battery and carmakers are demanding sustainable practices because the customers are demanding it.
Gavin Montgomery, Research Director of Battery Raw Materials, Wood Mackenzie; Karen Narwold, Executive Vice President and Chief Administrative Officer, Albemarle; David Ryan, Vice President of Corporate Strategy and Investor Relations, Albemarle; Alexi Zawadzki, CEO, Lithium Nevada
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