Lithium: From Rocks into Roadsters

The world is going to need more lithium… so where do we get it?

Key Takeaways:

• Lithium is a critical mineral used in high energy density lithium-ion batteries for electric vehicles (EVs). There isn’t a way to replace lithium in EV batteries. New EV battery technologies in development — like solid-state, lithium-metal, and lithium-sulfur — rely on lithium too. Lithium’s supply chain is increasingly important.
• Batteries for EVs are now the biggest driver of global lithium demand, and demand is now starting to accelerate. Automakers expect EV sales to increase from 3 million new cars in 2020 to 40 million new EVs in 2030. [1] To enable this growth, the lithium industry needs to produce ten times more lithium in less than ten years.
• Existing and planned lithium production won’t be enough to meet lithium demand from EV manufacturers as soon as 2024. The potential scarcity has already started to alarm automakers and drive up lithium prices.
• Lithium is found in three different types of geologies: hard rock, sedimentary deposits, and brines. Each site requires different methods to extract and purify the lithium.
• Hard rock mines like those in Australia can (and are) expanding lithium production capacity with existing technologies, but it won’t be enough.
• The Lithium Triangle — Chile, Argentina, and Bolivia — could conceivably start producing massive amounts more lithium, if technical challenges and barriers to new projects can be overcome. (Bolivia doesn’t produce appreciable lithium today, even though its lithium reserves dwarf Australia’s.) The biggest “knob” to turn on global lithium production is what happens with brine operations in South America.
• The USA and Europe, worried about depending on foreign suppliers, are exploring ways to extract lithium from new types of sources: sedimentary deposits and geothermal brines. The US has millions of tonnes of lithium that could be unlocked, if economical and environmentally sound process technologies can be developed… however, these will take time.

Looking back on 2020, one of the most interesting technical stories for me was the inflection point in lithium demand. As many of us know, lithium is a critical element for the high energy density batteries that electric vehicles use. [2] While alternatives to cobalt and nickel — two other problematic minerals used in Li-ion batteries — are making inroads, it’s impossible to engineer the lithium out of a battery and get similar performance.

Global electric vehicle (EV) sales have risen to the point that the demand for lithium from EV battery industry is now the major driver of global lithium prices. Automakers project that EV sales each year will increase from 3 million in 2020 to 40 million by 2030, driving the demand for battery-grade lithium upwards by 10x this decade. [1] While this may have seemed like fantasy three years ago, the rise in EV sales in Europe and China coupled with a recent series of announcements from governments and auto manufacturers suggest that the rubber is starting to meet the road. [4]

As my colleague Gaetano Crupi wrote last month in an excellent summary of who controls the world’s lithium, the world has plenty of lithium The problem (and opportunity!) is increasing lithium extraction quickly enough to avoid shortages that impact mass-market adoption, while respecting local communities and the environment. Recent projections from Benchmark Minerals Intelligence show that the gap between battery manufacturing capacity and lithium production is growing and that global lithium production levels will be outstripped sooner than anticipated — as early as 2024.

Source: Benchmark Mineral Intelligence, with permission. The red line shows the expected increase in lithium demand. CAGR = Compound Annual Growth Rate; LCE = lithium carbonate equivalent

Based on the growth in demand from the battery sector and the time it takes to build new lithium production (5–10 years), the industry should be ramping up lithium production yesterday. We’ve already seen lithium prices begin to surge in Q4 2021 as the lithium inventories that accumulated during the COVID slowdown have shrunk.

So what happens next? In the rest of this post, we’ll describe how lithium is currently taken out of the ground and converted into battery-grade lithium, to help understand some of the challenges in increasing production. In the next post (yes! there’s a sequel!), we’ll review some technologies that could help close the gap.

I’m going to focus on current and near-term technologies, so I won’t cover lithium recycling or extracting lithium from seawater right now. Lithium recycling from spent batteries will become an important source of lithium over time. However, there is currently not enough lithium in circulation to make a dent in demand. There are more than ten million mostly new EVs on the road today, compared to hundreds of millions expected in the coming years, which will hopefully run for many years before retiring!

How is lithium produced today?

Lithium occurs naturally in three types of sources: hard rock, sedimentary resources (clays), and brines. Below is a high-level overview of the type of lithium resources by country:

As Gaetano discussed in “Who Controls the Lithium?”, the majority of the world’s lithium is currently mined from hard rock sources in Australia (49% of 2020 production) and China (17%). The rest comes from lithium brines in Chile (22%) and Argentina (7.6%). [5] Each type of lithium source requires different mining processes and has different challenges to increasing production. Once lithium is mined, the rest of the supply chain — purifying the lithium and using it to make battery components like cathode materials and electrolytes — is mostly located in China.

Hard Rock

In hard rock deposits, lithium is usually present as part of a — that’s right — rock. The most common rock that is rich in lithium (Li) is called spodumene. [6] In rocks that are worth mining, the fraction that is Li2O is typically about 1–2% initially.

Satellite image of the Greenbrushes mine in Australia circa 2015. Source: Google Earth

The first step in producing lithium is to dig the rocks out of the ground in open-pit mines. These rocks are then crushed, pulverized, sorted by size, and cleaned. This prep allows spodumene to be separated from the rest of the rock bits through established mining processes (physical separations and flotation). The result is a spodumene concentrate (all of the spodumene rock bits, none of the other rock bits) with about 6–7% Li2O that is ready for lithium extraction.

Many hard-rock mines produce spodumene concentrate (ground-up rock bits) as the final product. This concentrate is shipped to other processing facilities, where it is converted to higher grade lithium products like lithium carbonate or lithium hydroxide. (S&P Global) Almost all of the spodumene concentrate mined in Australia is shipped to China for processing, although several new domestic processing facilities are in the works.

“Pour Over Coffee” by Kaffeetastisch is licensed under CC BY 2.0

At spodumene processing facilities, the traditional way to extract lithium is to first roast the spodumene concentrate at high temperatures (above 1000 degC). After this, it’s cooled and leached with sulfuric acid at around 250 degC, which pulls the lithium out of the spodumene to form lithium sulfate (Li2SO4). Then water is poured over the spodumene-sulfur acid mix to dissolve the lithium sulfate — just like making pour over coffee. The lithium-sulfate coffee can be turned into crystals of lithium sulfate, lithium carbonate, or lithium chloride. (See process descriptions from SGS, MDPI.)

The challenges for hard rock mining are similar to the challenges faced across the mining industry:

• Improving geological surveying techniques to locate undiscovered resources.
• Identifying bands with high mineral content and “grading” the rocks that are dug up to reduce waste and accidentally processing low-grade material.
• It’s “dull, dirty, and dangerous” — automation and other solutions to improve efficiency, increase safety and reduce humans’ exposure to hazards can improve the bottom line.
• High energy requirements and carbon intensity of mining operations. The large equipment used to mine ore often runs on diesel (which can also pose a logistical challenge). Mechanical pulverization requires energy or diesel. Traditional lithium extraction processes require very high temperatures (1000 deg C), which not only consume energy but are hard to decarbonize.
• Managing the water, chemicals, and tailings (leftover rock)
• Cleaning up and restoring the natural environment at mining sites at the end of the mine’s life.

Still, hard rock lithium mining operations in Australia can be predictably scaled up with conventional technology. Several new projects and lithium processing facilities are in the planning and construction stages.

Brines

Brines are basically water with very high concentrations of salts and minerals that have collected underground. Most of the current lithium production from brines is from “continental” brines located in the Lithium Triangle — Chile, Argentina, and Bolivia. China and Tibet also have salt flats with lithium-containing brines. The US also has some geothermal brines with lithium; however, producing lithium from geothermal brines is more challenging than from continental brines, and this has not yet been done commercially. [7]

Even in the Lithium Triangle, some brines are better than others. Understandably, the amount of lithium in the brine has a huge impact on the cost of producing lithium — if you have to process twice as much brine to get the same amount of lithium, it will cost twice as much. The best brine sources (notably the Salar de Atacama in Chile) can reach 5000 parts per million (ppm) lithium. As a rough rule of thumb, brines with less than 400 ppm lithium may not be economical to recover with today’s tech.

The other minerals in the brine also impact processing costs. Brines always contain other minerals in addition to lithium — some of the most common are calcium (Ca), magnesium (Mg), sodium (Na), boron (B), iron (Fe), and potassium (K). The concentration of each mineral varies widely by location, making each lithium extraction project a fun game of chemical elimination.

The general process for removing lithium from brines is to drill wells and pump the brine from underground into a series of evaporation ponds. In dry desert climates, the water in the brine evaporates, leaving behind a brine with even higher mineral content (basically a salty mud). Once the lithium content reaches target levels (up to 6% by weight), the highly concentrated brine is sent via pipeline or tank truck to a lithium processing facility.

At the processing facility, the concentrated brine goes through a series of chemical processes to separate the lithium from the rest of the brine. While every brine is different, some typical steps are:

1. Pretreatment to remove contaminants from the brine, usually through filtration or ion exchange.
2. Chemical treatment, where lithium is separated from the rest of the minerals in the brine.
3. If lithium carbonate is the target product, the final step is usually treatment with sodium carbonate. This causes solid lithium carbonate to form and precipitate (crystallize) out of solution.
4. Filters are used to collect the solid lithium carbonate.

Producing lithium from brines is generally less expensive than hard rock mining, but several challenges have prevented new brine operations from coming online. One major challenge is the amount of groundwater that is lost from evaporation ponds and used in processing facilities. The impact of drawing billions of liters of brine per year on regional aquifer levels, agriculture, and availability for nearby humans is the subject of intense debate. In Chile, in particular, new projects have faced strong pushback from local and indigenous communities over land and water concerns. [8] Brine operations also require a massive amount of land.

Additionally, conventional brine facilities based on evaporation ponds typically recover only 30% to 50% of the lithium in the brine, and the extraction process takes roughly 36 months. Doubling lithium recovery could DOUBLE the amount of lithium that an existing brine operation produces. The current brine processing flowsheet screams “opportunity for process intensification!”

Sedimentary Deposits / Clays

Sedimentary deposits, sometimes called clays, are basically lithium-rich dirt. They typically contain lower concentrations of lithium than hard rock reserves, and there is more variability in the chemistry of the dirt (similar to brine resources, each site is unique). There are no commercial projects that produce lithium from sedimentary deposits today. However, several companies are exploring the feasibility of extracting lithium from clay and sedimentary deposits in the western US and Mexico. [9]

The processes proposed to extract lithium from clays are similar to hard rock mining. For some sedimentary deposits, roasting may not be needed because the lithium isn’t bound to the sediment as strongly. On the other hand, clays and dirt “hold on” to the chemicals used to leach the lithium more strongly, creating more chemical waste challenges.

Lithium Products

There are three major lithium chemical products that are sold to cathode makers and battery producers. Lithium carbonate and lithium hydroxide are used to make battery cathodes. Lithium chloride is usually used as the precursor for lithium foil, which will be needed for next generation EV batteries (e.g. lithium metal or lithium sulfur) if those technologies mature. As the demand for each of these products shifts, it has the potential to cause additional price swings and changes to processing requirements.

Increasing Lithium Production: What Gaps Exist?

If companies want to increase lithium production, what is needed to make this happen? The answer depends on location. The barriers exist to increasing production — technical, economic, regulatory, political — vary by country and geology.

Lithium typically costs much less to produce from brine operations than from hard rock mining, but new brine facilities take longer to start. More energy, chemicals, and materials are needed to extract lithium from mineral ore than from brines, where the sun does most of the work. Hard rock extraction can cost up to twice the cost of brine recovery: operating costs for hard rock projects are often more than $7000 per tonne produced per anum (tpa) of lithium carbonate equivalent (LCE), versus $4000/tpa LCE for brine operations. (Lithium Americas Corporation) However, production at hard rock operations can be ramped up relatively quickly once financed (within 5 years, per IEA estimates). Brines produce low-cost lithium, but lithium production requires several years for evaporation ponds.

Bottom line: Companies with hard rock assets in Australia (and elsewhere) will continue to increase production the next decade if it is remotely commercially viable. The biggest “knob” to turn on global lithium production is what happens with brine operations in South America. The dark horse is lithium production in the US and Europe from unconventional sources and newly discovered resources.

Lithium production is a critical area for investment. Any lithium that can get to market will likely find a buyer in the next 5–10 years. This not only reduces risk for new technologies to scale but rewards technologies that decrease the startup time for new facilities. We are clearly not alone in this assessment; the US government has kicked off several programs to boost R&D in this area, and we’ve recently seen major investments from the private sector into direct lithium extraction (DLE) technologies. In the next post on lithium, we’ll talk about these and other technologies that could help the industry meet growing lithium demand, and prevent EV sales from stalling out.

The Roadster was cool, but I really want an electric truck. Image courtesy of Ford.

Notes

1. Per the International Energy Agency (IEA), roughly 30% of global demand for lithium came from EVs and energy storage in 2020: 22,000 of 72,000 tonnes of lithium content. There were 3 million new EVs registered in 2020, containing about 8 kg of lithium per vehicle on average.
   It’s hard to make predictions, especially about the future — predictions of EV sales in 2030 vary. Bloomberg New Energy Finance reports that automakers are targeting sales of 40 million EVs (BNEF). The IEA’s less aggressive EV demand scenarios predict a 3–6X increase in lithium demand in 2030, which is still huge.
2. Why is lithium critical for batteries with high energy density? Lithium is the smallest, lightest metal that can carry charge. It’s small enough to fit in between the atoms in each electrode, allowing the battery package to be small. For a refresher on battery technology, see our previous thought paper on Portable Batteries.
3. While lithium ion batteries have much better performance for EVs than other types of batteries (like lead acid or nickel-metal hydride), there are different kinds of Li-ion batteries that are not all created equal. Specifically, NMC batteries (which derive their name from the Nickel-Manganese-Cobalt used in the cathode) have dominated the EV space because they have higher energy density. However, in 2021 NMC lost significant market share to lithium iron phosphate (LFP) batteries, which have lower performance but are much cheaper. LFP batteries, which are used extensively in EVs in China, were over 18% of global EV battery capacity worldwide as of March 2021.
4. The executive order signed by US President Biden recently, which included a requirement that all new federal car and truck purchases to be zero-emissions by 2035, is just the latest in a long series of announcements from governments and auto manufacturers. More more countries and companies pledged to transition to electric vehicles in the wake of COP26. While neither the Executive Order nor the COP26 pledges are binding, the this focus on EVs and onshoring infrastructure has focused attention on battery supply chains. (Note for the Texas family: The military will be okay — the executive order does not apply to tanks.)
5. Based on 2020 data from the US Geological Survey. The remaining 4.5% of the world’s lithium was produced from Zimbabwe, Portugal, and Brazil. In 2020, 82,000 tonnes of lithium content were produced globally.
   While we’re talking about how much lithium the world produces, it’s important to note that the amount of lithium produced can be reported in a few different ways. The most common types of numbers you’ll see are lithium content, lithium carbonate equivalent (LCE), and sometimes spodumene concentrate. One tonne of lithium content = 5.3 tonnes of lithium carbonate (Li2CO3) = ~37 to 43 tonnes of spodumene concentrate (Source).
6. For the chemistry nerds, spodumene is 8% Li2O, 27.4% Al2O3, and 64.6% SiO2. The mineral spodumene is part of a part of a large family of lithium aluminosilicates (rocks that contain lithium, aluminum, and silica) called pegmatites. Other pegmatites with lithium are petalite, lepidolite, amblygonite and eucryptite. One important thing to note is that the lithium content of pegmatite minerals varies. While spodumene rich rock typically contains 1–2% Li2O, there are some exceptional sites like Greenbrushes, Australia that contain higher amounts (in this case, 3.1% Li2O). For more than you ever wanted to know about pegmatites, check out this 2019 paper by Dessemond et al.
7. Geothermal brines more complex and harder to handle than other brines. They come out of the ground hot, and often contain LOTS of other salts and metals in addition to lithium. Specifically, geothermal brines have iron and dissolved silicas, which aren’t typically present in continental brines. (Julie Chao, LBL newsletter)
8. Why the public concern over evaporation ponds? Chile’s water authority acknowledged that it doesn’t know how lithium mining could affect nearby freshwater reservoirs that provide drinking water to local communities in the Atacama. Government studies have shown that more water leaves the underground reservoirs than returns (via snow and rainfall from the Andes mountains.) No one knows how much brine can safely be pumped from under the Atacama before things start to dry up or negative impacts are observed.
9. Clay and sedimentary projects under development in North America include Thacker Pass in Nevada (Lithium Americas Corp), Big Sandy in Arizona (Australia’s Hawkstone Mining), and a large project in Sonora, Mexico. (Source: Physics Today)

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