TACKLING THE LITHIUM SUPPLY CHAIN

Researchers are closely monitoring energy supply chains to ensure resource availability

BY EMILIE RUSCH

The Issue

Lithium-ion batteries are essential to electric vehicles, but there’s broad concern about whether the production and availability of lithium will increase quickly enough to keep up with the explosive growth of technology reliant on the extra light, energy dense material—and at prices that U.S. customers will be willing to pay.

Currently, all three stages of the lithium supply chain— resource extraction and initial processing (upstream), intermediate processing (midstream) and battery production (downstream)—lack geographic diversity, which puts the supply of this critical material at risk for geopolitical disruption. Chief among the issues is the fact that some 80 percent of all midstream lithium processing currently happens in China. Even if additional domestic sources of lithium can be brought into production, those upstream resources would still likely have to travel to China for midstream processing, at least in the short term, before they could become batteries.

The Players

Rod Eggert, Viola Vestal Coulter Chair of Mineral Economics at Mines, is the deputy director of the Critical Materials Institute, a multi-institutional, multidisciplinary consortium and Energy Innovation Hub of the U.S.

Department of Energy focused on innovation to assure supply chains for materials critical to clean-energy technologies.

“To meet the deployment targets for electric vehicles, we are going to need a lot more lithium. The long-term issue is, will the market be able to respond quickly enough to develop new supply chains at prices that we’re willing to pay?”

Eggert said. “Some are concerned about the risks of physical unavailability, but perhaps more important is the affordability of the battery material.”

“Ideally, we’d like the lithium supplies to be sufficient in a quantity sense. We’d like them to be affordable, and we’d like them to be secure so they’re not vulnerable to disruptions like we’ve seen over the past couple of years,” he said.

“There’s tension between minimizing costs today and making sure your supplies are secure. Security requires diversity in supply—if you’re a battery manufacturer or electric vehicle manufacturer, security of supply comes from having options for sources. But sometimes having options costs more money than relying on a single source.”

The Solutions

Mines researchers affiliated with the Critical Materials Institute are tackling the lithium-ion battery challenge, as well as other critical material challenges, in a variety of ways.

Eggert’s work focuses on economic analysis—including how to explain battery material substitutions from an economic perspective—and long-term lithium availability. One of his current projects aims to create an alternative decision framework that monetizes the environmental impact of different sources of lithium.

“The engineering community is very good at quantifying environmental impacts in physical terms—what are the emissions to water or the emissions into the air or the land use requirements for different types of production. But each of those impacts has a different unit of account, which can make comparisons difficult,” Eggert said.

Monetization has the potential to help inform decision making in both the private sector and in government. In the private sector, companies are primarily focused on commercial costs, but what has come to be termed ESG (environmental, social and governance) considerations are also very important in making a commercial investment decision.”