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The Challenges of Lithium in Europe

Who will be the largest lithium producer in the European Union?

A lithium-ion battery being swapped out from a scooter.
A lithium-ion battery being swapped out from a scooter. Photo by Kumpan Electric on Unsplash.

Mining lithium in Europe has been a controversial topic over the past few years, with the European Union pushing to expand the industry and the public fighting against it.

Lithium is a soft silver metal with multiple applications, which can be extracted from brine waters and mines of lithium ore. Its compounds — such as lithium carbonate — are often used in ceramic glaze, for the production of heat-resistant glass and pottery, and in medicine, as a mood stabilizer for bipolar disorder. However, the major application of this metal is by far (65%) in the production of lithium-ion batteries used in electronic devices (smartphones, computers, etc.) and electric vehicles.

With the growing adoption of these vehicles worldwide, demand for lithium is rising. This in turn has caused prices to spike in 2021, as supply struggles to keep up— earning lithium the nickname white oil. While the increase in prices may benefit lithium’s largest producers worldwide — Australia and Chile, supply constraints are a challenge for nations seeking to electrify their transport sector in order to reduce carbon emissions. Especially for the European Union since it imports practically all of its lithium, and therefore has to compete with the market’s biggest consumers — China, South Korea and Japan.

Portugal is currently the largest lithium producer in Europe, with lithium ore reserves around 60 thousand metric tons — the largest in the continent (8th worldwide). While its supply is mostly directed towards the glassware and ceramics industry, the country is looking to increase production and shift towards battery-grade lithium compounds, positioning itself to become Europe’s main supplier. This represents an economic opportunity for the nation and a chance for the European Union to become independent from the global lithium market.

Seeking to seize this opportunity, the Portuguese government has recently approved the prospection and extraction of lithium in six different sites across the country. The approval followed an environmental evaluation of the impact of mining on eight potential sites previously identified. Two of which were excluded given environmental restrictions — according to the official statement. The mining rights to the remaining sites, which saw their total areas reduced by half to exclude population clusters, will soon be attributed following a public call for project applications.

Not everyone shares the government’s enthusiasm though, and the reaction from the public to the news has been mixed. National environmental groups and various towns closer to the mining sites have opposed these projects for a long time, accusing the central government of lack of transparency and of ignoring regional governments, which fear the impacts of mining operations on the environment and on the livelihoods of citizens.

Uyuni salt desert in Bolivia. A lake bed reflects the blue cloudy sky above.
The world’s largest dry lake bed: Uyuni salt desert in Bolivia. The desert’s brine is rich in lithium and Bolivia is part of the Lithium Triangle with Argentina and Chile. Photo by Gustavo Espíndola on Unsplash.

Extracting hard rock from the ground is bound to impact the area. It changes the natural landscape, diminishes air quality due to dust, causes noise pollution, it may involve deforestation or clearing of grazing fields and ultimately harms the region’s ecosystems. Furthermore, if not done properly it can cause the contamination of underground water supplies. All of which poses a significant threat to rural communities, who largely depend on agriculture and farming.

Another argument commonly made against lithium mining is that the production of electric vehicles has a carbon footprint larger than that of conventional vehicles — especially given the emissions of the mining process. Although this is technically true, it fails to acknowledge that electric vehicles generate less carbon over their lifetime than conventional ones, therefore offsetting their carbon debt.

This is especially true in Portugal, where 60% of its electricity is produced from renewable energy sources (4th largest share in the EU) and one third of its total energy consumption comes from renewables. Furthermore, Portugal, where electric vehicles comprise 14% of the market share, has also been the 4th country in the Union to stop burning coal— despite the negative consequences in terms of energy dependency.

Whatever the arguments chosen, pressure from the public in Europe has kept governments in check and already led to the scraping of mining projects in the northern region of Montalegre in Portugal last year and in Serbia early this year. Both officially terminated due to environmental concerns. The same can happen to the recently launched projects in Portugal despite the state’s assurance to mitigate environmental impacts and the promises to process every gram of lithium nationally, which will contribute to the local economy.

“Not one gram of lithium [mined in the country] will be processed outside of Portugal.” João M. Fernandes, Portuguese Environment Minister

Following the government’s announcement, local mayors met with then-Portuguese Environment Minister — João Matos Fernandes — and once again, the reactions were mixed. While some left the meeting partially pleased with the minister’s newfound openness. Others could not believe that they had no power of veto over the decisions made regarding their own municipalities. The mayor of Covas do Barroso has inclusively decided to proceed with judicial action to stop mining prospect led by the London-based company Savanah Resources.

Ultimately, the major challenge against lithium mining in Europe is public distrust for the government’s ability to put the safety of local populations above national and European interests. A distrust fueled by the lack of transparency and disregard for the regional governance, which can cost Portugal and the Union one of the greatest economic opportunities of the next decades.

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Gil Pires

Gil Pires

Junior Consultant | MSc in Biotechnology