Thank goodness lithium grows on trees

Demand for lithium is set to explode in the years ahead, as car makers move to EV technology, but lithium supply is likely to struggle to keep up with booming electric vehicle demand. Australia is the number one global lithium producer at present, accounted for 54.4% of global lithium production in 2019, more than double the output of the world’s second-largest producer, Chile. The figure below shows how the demand on commodities might change if all cars became electric by 2050 (posting of 21 July 2019).

Source: UBS Estimates

Mining for lithium is set to intensify over the coming years, and Cornish Lithium Ltd recently announced that the company had commenced its second drilling campaign at its Trelavour hard rock lithium project near St Austell in east Cornwall. In December, the company announced that they would be accelerating the development of the Trelavour hard rock lithium project following the successful production of battery-grade lithium hydroxide from lithium mica samples obtained during the first drilling programme earlier in 2020 (posting of 10th December 2020). 

In parallel, Cornish Lithium continues to advance its project to extract lithium contained within geothermal waters, and Australian Company Vulcan Resources is also developing a new zero emissions lithium production facility in Germany to deliver lithium to the booming German EV car making industry. Feasibility studies into the lithium production facility showed that the project would be highly profitable. The proposed facility would have the potential to produce as much as 40,000 tonnes of lithium hydroxide each year, the usable ingredient for battery production. The plant would be looking to tap into an identified deposit of 1.12 million tonnes of lithium carbonate equivalent in the Upper Rhine Valley of Germany, one of Europe’s largest lithium deposits, operating on geothermal energy drawn from the deposit itself, allowing the facility to run entirely on renewable energy. It would position the project as a producer of lithium with zero embedded greenhouse gas emissions, with the project proposal including plans for a 74MW geothermal plant.

400 miles from Cornwall, Northern Lithium is a company that has been launched and has secured rights to explore and extract lithium and other minerals from hot underground water within the Weardale Granite of County Durham. A source of lithium in the North East of England raises the possibility of boosting an emerging centre for electric vehicles and a potential jobs boost for the area, with Northern Lithium planning to set up wells to extract and re-inject brine extracted from the underground rock, with a lithium production plant somewhere in between. Although the company will strive to minimise any environmental impact, the location of the site within the North Pennines Area of Outstanding Natural Beauty could complicate the plans.

However there are some suggested plans which show a lack of understanding of the need to mine raw materials, and hence my titular remark about lithium 'growing on trees'. US President Joe Biden has announced his intention to replace the US government’s federal fleet with “clean electric vehicles” promising million of jobs across the auto supply chain. Details and timelines of his federal EV transition remain unclear but with a government fleet of 645,000 vehicles, according to 2019 data from the Federal Fleet Report, it would represent a significant upsurge in US cell demand, probably around 61,000 tonnes of lithium.

Even more ambitious, the world's richest man, Elon Musk, is planning to produce 20 million electric Tesla cars per year by 2030, with no thought as to where the lithium, and other raw materials will come from. 

Lithium mines produced an estimated global total of 77,000 metric tons of lithium in 2019 and the figure below shows that Tesla would require over 127,000 tonnes per year of lithium, around 165% of annual world supply! Lithium is “just like widely available”, according to Musk and Tesla’s scientists, and one of his followers tweeted "there is a plentiful supply of lithium. It is 3rd in the Periodic Table, only hydrogen and helium being more abundant." Ah well!

But apart from lithium, Tesla would need more than 30% of global mined nickel production in 2019 for its batteries, the entire output of the top 6 producers and more.  But at least he did acknowledge that nickel comes out of the ground as he said "I’d just like to re-emphasise, any mining companies out there, please mine more nickel".

@barrywills