Part 3: Lithium and Cobalt- Risky Materials

Part 3:?Lithium and Cobalt-?Risky Materials

We know from Parts 1 and 2, that the key materials for lithium ion battery EV mass adoption are lithium and cobalt.?The rest of the materials we’ve discounted as being of minor concern, primarily related only to the ultimate level of cost reduction that can be achieved as the “learning curve” for batteries carries forward into the future.

Now let’s look at the abundance of these minerals, and their production capacity.?Do we have enough, or is there a hard limit which makes EV mass adoption impossible?

Crustal Abundance is Deceiving

First off, don’t even look at the abundance of these metals in the Earth’s crust, as it has little to do with predicting the feasible supply or price of metals.?Crustal abundance would predict that titanium, zirconium, tungsten, chromium and nickel should all be cheaper than copper…Obviously, there’s more involved than just how much of the stuff there is in the Earth’s crust.

Lithium

We’ve already estimated that we need about 160-170 g lithium per kWh of useful EV battery capacity.?To be conservative, let’s assume a loss of lithium to purification, giving us a nice round number of 200 g lithium/kWh, suitable for use in some Fermi-type order of magnitude estimates.

Similarly, let’s use the Chevy Bolt battery as our aspirational goal.?If you’re read my article about embodied energy:

https://www.dhirubhai.net/pulse/much-ado-embodied-energy-paul-martin

- you’ll know that I don’t favour the use of gigantic EV batteries like this given that a much smaller battery is not only much cheaper and much lower in environmental impact, but also meets the lion’s share of the average person’s driving needs.?But let’s aspire to big batteries, to follow the market, and?in the interest of having nice round numbers to work with.

Next, realize that at 160 g Li/kWh, we’re only a little more than double the absolute theoretical minimum amount of lithium that we could possibly use to store a kWh of energy.?We don’t have much room for improvement, though we do have some.

The first place people always go is to the U.S. Geological Survey data for Lithium:

https://minerals.usgs.gov/minerals/pubs/commodity/lithium/mcs-2017-lithi.pdf

From this, they determine that world production in 2016 was 35,000 tonnes of lithium (not lithium carbonate) and world “reserves” were 14,000,000 tonnes.

Then they do the following calc:

200 g/kWh x 60 kWh = 12 kg =~ 0.01 tonnes of Li per car.?Our estimates are only going to be good to about 1 significant figure, so in the end the estimate of purification losses don’t matter.

35,000 tonnes/yr /0.01 tonnes/car = ~3,500,000 cars per year – worldwide.?For reference, so far there are approximately 2,000,000 battery EVs on the world’s roads, obviously not all of which were built in a single year.?While some are Tesla Model S P100Ds, most actually have packs considerably smaller than that of the Bolt.

Total car/light truck sales in the United States alone are in the range of 16-18 million per year, almost all of which are NOT battery EVs today.?

OK, so we’re going to have to build a LOT of new lithium mines…that shouldn’t be controversial.?Lithium prices are going up, big time, if EVs are to be widely adopted in the near future.

But do we have enough lithium even if we do that?

14,000,000 tonnes / 0.01 tonnes/car = 1.4 billion cars, assuming all the world’s “reserves” of lithium are used for nothing else other than making EV batteries.

There were reportedly 1.28 billion cars and light trucks in the world already in 2015, with tens of millions added in 2016 and 2017- and a huge number of people in India, China etc. who want cars but can’t afford them yet.

“Houston, we have a problem…”-?not only is some lithium required for uses other than batteries, but we can barely even replace the existing ICE engine vehicle fleet with EVs if we choose battery packs this big, even if they become cheap enough to make that an affordable option.?Recycling won’t help us get there either, because to build out that fleet, we need that much lithium to come out of the ground FIRST- then we’ll be able to recycle to reduce the amount of fresh lithium needed for replacement cars.

The good news is, we’ve made a couple mistakes in our analysis!?

RTFF

First, and perhaps worst, we failed to “RTFF”- that acronym meaning “read the @($*&% footnotes”- failing to do that being a capital crime among people doing research, and one which is shamefully committed routinely in the instant information Internet era.?The footnotes are there for a reason- and they often tell the truth more plainly than the data does.

In the USGS mineral commodity summary for lithium, the word “Reserves” has a little Footnote 5 associated with it.?Footnote 5 has a handy, but broken, link to Appendix C of the original USGS Minerals Commodities Summary Yearbook report for 2016.?For your convenience, here’s a link to the report, which works:

https://minerals.usgs.gov/minerals/pubs/mcs/2016/mcs2016.pdf

Appendix C is on page 197.?Here, in part, is what it says.?I’ve emphasized a few things in BOLD because LinkedIn’s editor doesn’t support highlighting:

USGS Mineral Commodity Summary: Appendix C- Reserves

“ Reserves data are dynamic. They may be reduced as ore is mined and/or the extraction feasibility diminishes, or more commonly, they may continue to increase as additional deposits (known or recently discovered) are developed, or currently exploited deposits are more thoroughly explored and/or new technology or economic variables improve their economic feasibility. Reserves may be considered a working inventory of mining companies’ supply of an economically extractable mineral commodity. As such, the magnitude of that inventory is necessarily limited by many considerations, including cost of drilling, taxes, price of the mineral commodity being mined, and the demand for it. Reserves will be developed to the point of business needs and geologic limitations of economic ore grade and tonnage. For example, in 1970, identified and undiscovered world copper resources were estimated to contain 1.6 billion metric tons of copper, with reserves of about 280 million metric tons of copper. Since then, almost 500 million metric tons of copper have been produced worldwide, but world copper reserves in 2015 were estimated to be 720 million metric tons of copper, more than double those of 1970, despite the depletion by mining of more than the original estimated reserves. Future supplies of minerals will come from reserves and other identified resources, currently undiscovered resources in deposits that will be discovered in the future, and material that will be recycled from current in use stocks of minerals or from minerals in waste disposal sites. Undiscovered deposits of minerals constitute an important consideration in assessing future supplies. USGS reports provide estimates of undiscovered mineral resources using a three-part assessment methodology (Singer and Menzie, 2010). Mineral-resource assessments have been carried out for small parcels of land being evaluated for land reclassification, for the Nation, and for the world.

Reference Cited: Singer, D.A., and Menzie, W.D., 2010, Quantitative mineral resource assessments—An integrated approach: Oxford, United Kingdom, Oxford University Press, 219 p.”

Clearly, we have to be careful to understand what the word “Reserves” actually means for mineral materials, before drawing any conclusions!?If the history of copper is any indication, I don’t think we need to worry at all about the absolute abundance of lithium, although price could go for a very wild ride- in the short term at least.?Longer term (20+ years), other battery technologies such as aluminum or zinc-air secondary batteries, or sodium ion batteries, may become feasible and cost-effective, and lithium may slowly drift back into its former obscurity.

Lithium Supply Sources

Lithium is produced from three main sources:?from salt deposits in arid climates (“salars”, primarily in Chile), from hard rock mineral ores such as spodumene (primarily in Australia), and from the direct extraction of lithium from brines.

In the salars, the primary product of the “mines” is potassium chloride (potash, used primarily as fertilizer), with lithium carbonate, boric acid, potassium sulphate, potassium nitrate and magnesium chloride all being produced.?The value of these comparatively high tonnage, low value co-products may significantly affect the willingness of salar miners to invest in new lithium production capacity.?However, the costs to expand a salar mine are comparatively small.?While salar production uses water in some of the most arid locations on earth, the mining process is very low in environmental impact relative to just about any other mining process for metals, and the key refining step (water evaporation) is entirely solar powered.

Lithium “salar” evaporation ponds, from www.mining.com

Spodumene and other hard rock lithium sources are comparatively abundant, and also fairly poor in lithium content.?Fortunately, good concentrates can often be made, which significantly reduces the amount of ore which must be roasted and acid leached to recover lithium.?This production process generates comparatively few saleable byproducts and hence production will be more closely tied to the price of lithium.?The process of mining and refining is more energy and emissions-intensive than the salar production process but the ultimate “reserves” of such ores are huge- assuming the price goes high enough.?

Spodumene, a hard-rock lithium ore (from www.geology.com)

The third source is responsible for about 15% of lithium production at present, and I'm convinced it will become a growing source of lithium in the future: the direct extraction of lithium from brines (DLE). Brines all over the world, of many types, contain lithium in concentrations high enough to be of commercial interest. Some brines are already being exploited for other purposes: geothermal power production, or the production of other chemicals such as bromine. Others are byproducts of petroleum production (so-called "produced water"). These brines are generally too low in lithium concentration AND not found in the Atacama desert, one of the driest locations on earth- accordingly, conventional evaporation of the brine to precipitate all the salts out one by one is not an economic alternative. However, approaches to selectively extract lithium ions, which are smaller than their periodic table neighbours sodium, potassium, magnesium and calcium, do exist. These processes, most notably deployed by Livent, permit Li to be removed from the brine which can then be re-injected from whence it was produced. That eliminates a key concern with the evaporative method, which is the removal of saline water which can cause land subsidence as well as the drawing in of fresh groundwater at the margins of the aquifers.

Numerous new enterprises are engaged in developing DLE technology, along with the dominant existing producer Livent. One such company is Standard Lithium, who have access to an existing, giant brine resource in Arkansas which is already being produced in giant volume for the production of bromine. Standard Lithium intends to "borrow" the brine before it is sent back into the subsurface, extracting the lithium. This gives them access to a huge resource at very low investment cost. Of course it all depends on how well their LiSTR DLE technology works, and how well they can optimize it. Their large demonstration scale plant, designed and built by my company Zeton Inc., has permitted them to do just that. They have recently announced production of battery grade lithium carbonate from the Arkansas brine using their process, which is described well in this video (with a nice tour of their demo plant in Zeton's facility prior to shipment)

Is Lithium a Good Investment?

Don’t ask me- I have no idea!?But I do have some warnings for you if you think so.

The abundance of the hard rock lithium “ores” will, along with the potential for lithium recovery by DLE and from post-consumer batteries, place an upper limit on the price of lithium in my view.

The supply is also controlled by comparatively few producers, and rumours are that they are running far below capacity.?The risk that the existing players swamp new market entrants out of the market seems fairly real.

Want to know if we’re entering an era of expensive lithium??Keep an eye on your local hardware store.?When you see the disposable (primary) lithium batteries disappear from the shelves, you can start to be worried.?But right now, lithium isn’t either the primary cost or environmental impact driver of lithium ion batteries.?

COBALT

Electrolytic cobalt rounds

Cobalt is a much trickier animal than the other battery materials we’ve been talking about.?While we should expect to see increases in “reserves” just as we have historically seen with copper and should expect to see with lithium, cobalt represents some unusual extra concerns for mass battery EV adoption.

Only about 10-15% of cobalt is produced from ores where cobalt is the primary target mineral.?Almost all cobalt is produced as a by-product of copper or nickel production.?A substantial amount of cobalt is used for non-battery uses- in alloys for corrosion resistance, high temperature, toughness in tool steels, in permanent magnets, as a cementing material for tungsten carbide, as a colourant in glasses and ceramics, as a drying catalyst in paints and varnishes etc.

An artglass paperweight I made many years ago.?The dark blue glass owes its beautiful colour to cobalt aluminate.?Cobalt is used as a whitening pigment to offset the yellow caused by iron content in ceramics and glasses.?It can also be used to generate green, light blue and purple hues.

In mineable ores, cobalt is usually found in concentrations of about 1/10th that of nickel.?Similarly, with a few exceptions, copper-cobalt ores such as the ones in the massive Katanga (Democratic Republic of Congo (DRC)) and Zambian copperbelts are usually roughly 1/10th as rich in cobalt as they are in copper.?

Both copper and nickel are found either as sulphides or oxides/carbonates, with the sulphides having the (great) advantage that they can often be concentrated, sometimes to a very significant extent.?Nickel/cobalt laterite (oxide) ores, on the other hand, are very abundant and distributed widely across the world, but cannot be concentrated much at all so all the ore has to be processed.

https://www.geologyforinvestors.com/nickel-laterites/

https://pubs.usgs.gov/sir/2010/5090/t/pdf/sir2010-5090T.pdf

When we play the same game with cobalt that we did with lithium, here are the results:

Using the same 60 kWh Chevy Bolt battery, we need about 24 kg of Co if we use the Chevy’s LG Chem NMC 111 cathode-2.4x as much cobalt as lithium.?We might be able to reduce that to 7-9 kg of Co per car if we used Tesla/Panasonic’s NCA cathode, or the trickier NMC811 cathode material currently under development.?Because that range spans ? order of magnitude, we’ll use both 0.024 T/car and 0.007 T/car, and do the same deceiving calcs we did for lithium:

USGS world cobalt production, 2016:?123,000 T / 0.024 to 0.007 T Co/car = 5.1 to 18 million cars per year- more than we could make from current Li production- if all the world’s Co were to be diverted to making batteries.?Note that half of the cobalt made in 2016 was produced by mines in the DRC.

USGS cobalt world “reserves”, 2016:?7,000,000 T, with ? of those reserves being in the DRC.

7,000,000 T/ 0.024 to 0.007 T/car = 292 million to 1 billion cars worldwide

In this case, the “reserves” are the bigger pinch than the annual production rate, mostly because both copper and nickel are produced in such massive quantities in the world already, and because unlike lithium, there are substantial uses for the metal aside from batteries.

So:?why is cobalt the bigger problem than lithium?

Two reasons, in my view:

1)??????The Democratic Republic of Congo (DRC), and

2)?????The by-product pinch

Unlike lithium, there’s no alternative “hard rock” resource that we can access if we don’t like the prices of by-products.?Very little cobalt occurs in minable concentrations on its own.?Cobalt prices therefore can rise a lot before new nickel or copper mines will be brought into production just to satisfy cobalt demand.?And every mine which is built, has the built in risk of a flood of production coming from new mines in the DRC, where half the world’s reserves and current production are both located.

As of today, cobalt is trading at about $30/pound and copper at about $3/pound.?A copper ore which is 1/10th as rich in cobalt is now paying roughly equal for its copper and cobalt values.?If that were 70% in favour of cobalt, perhaps we’d have to start calling them cobalt mines.

But the big issue isn’t really the lack of abundance of cobalt, but rather the abundance of cobalt in one of the poorest and most dysfunctional countries in the world, the DRC.?Without a properly functioning state, the rule of law and other public institutions, it is difficult to imagine mining companies making the massive investments necessary to greatly ramp up cobalt production in DRC- and yet those massive resources remain there, threatening anyone else who may wish to build a new cobalt mine.

We've all seen images like this: artisanal miners for cobalt (and coltan)

Up to 20% of the cobalt produced in the DRC, and hence about 10% of the cobalt produced in the world currently, comes from so-called “artisanal miners”- desperately poor people, including children, digging for enough ore to earn money for food, trading with unscrupulous middlemen who take most of the value from this dirty, dangerous enterprise.?Driving the artisanal miners out of business by forcing all production to come from company mines sounds like a solution to the problem, but it does nothing to address the underlying poverty of the people of the DRC- a nation which is one of the richest in mineral resources on earth.??The artisanal mining of cobalt is exactly the sort of thing that fossil fuel dinosaurs like the Koch brothers love to publicize and blow out of proportion in the media, in an effort to make the EV revolution seem to be merely humanity trading one environmental problem for another- so why bother??In truth, there is absolutely no comparison between the environmental or socioeconomic impact of mining 7 to 24 kg of cobalt for a Chevy Bolt EV battery, all of which is available for recycling at the end of the battery’s life, with the impact of mining, refining and burning the tens of thousands of kg of fossil fuels that battery can replace over its lifetime.?That said, the situation in DRC is a very real problem, and a very, very difficult problem to solve.?

Is Cobalt a Deal-Killer for Mass EV Adoption?

I don’t think that it is.?However, cobalt is a real risk factor for raw materials cost, which may affect the ability of EV battery pack prices to continue falling on the trend that many expect them to follow.

Is Cobalt a Good Investment?

Again, ask someone who knows!?While I do see the price rising significantly in the future as EVs are inevitably adopted, large mining investments in the DRC seem very, very risky.?Investments elsewhere, such as in Cobalt Ontario (whose claim to fame is silver rather than its namesake mineral), have the DRC’s enormous known reserves hanging over their heads like the sword of Damocles- one major successful development there could knock the stuffing out of the price.?Worst of all, there are very few “pure” cobalt “plays” to invest in- the by-product pinch can turn your “sure thing” into a loser.??

2020 year -end update: Cobalt thrifting has continued in the battery market, focusing on lower cobalt cathode formulations. The thrifting is partially to remove the risk of cobalt future cobalt price spikes from future battery prices, and partially to remove the "black eye" given by nirvana fallacy arguments against batteries as a result of concern over artisanal mining in DRC. Sadly, few are interested in pursuing solving the problems of the DRC to ensure a stable future cobalt supply while ALSO helping millions of desperately poor Congolese.

2022 October update: half of Tesla's batteries last year were LFP (lithium iron phosphate cathode) which contain no nickel or cobalt at all. And CATL, a major Li ion battery supplier, announced a sodium ion battery which looks functionally rather like LFP did a decade ago. That battery contains nothing that isn't positively earth abundant- sodium is the active metal, found in salt and seawater. The cathode is an iron ferrocyanide- easily made from superabundant materials. And the anode is hard carbon, which can be made from numerous fossil and biological resources. Even the current collector foils are both aluminum (no copper is required) - energy intensive to make, but we will never, ever run out of alumina-bearing ores from which to make the metal. The future for batteries looks bright, and the notion that we won't be able to make enough of them due to a lack of materials abundance is more and more clearly a myth and nirvana fallacy argument rather than a real problem limiting the transition away from fossil fuels.