From global supply chains to concerns for public land, fulfilling U.S. demand for lithium faces challenges
Editor’s note: This article is part of a collaboration between APM Research Lab and the Ten Across initiative, housed at Arizona State University.
by RITHWIK KALALE | Feb. 22, 2024
Lithium is a key component of batteries, including ones used to power electric vehicles or EVs. Australia is the largest producer of lithium in the world, followed by Chile, then China.Countries including Thailand, India and Argentina have all recently struck “white-gold,” throwing their respective hats into the ring of lithium mining.
The U.S., while rich in un-tapped lithium deposits, is a net importer of the soft, silvery metal. The nation currently has only one active commercial lithium mine – Silver Peak in Nevada. ExxonMobil announced in November that it plans to install a lithium mining facility in Arkansas and become the leading supplier of lithium for EVs by the end of the decade. This is one of over 70 new lithium mines proposed for federal approval, documented by ASU’s Howard Center for Investigative Journalism.
According to the consulting firm McKinsey, the current global lithium supply will not meet the projected demand for large lithium-powered batteries by 2030. But despite that demand, lithium mining is not without controversy in the U.S.– and for good reason.
“Lithium mining is still very difficult to get approved, because of how messy it can be. Polluting of the groundwater, the danger for miners, significant safety issues, managing large numbers of people, regulatory issues of getting approval for how you're going to extract lithium, and then what are you going to do with it afterward?” said Gregory Collins, a global supply chain expert at Arizona State University.
The challenges to establishing new mines in the U.S. are not insurmountable, however. In November, the U.S. Department of Energy revealed California’s Salton Sea region contains over 3,400 kilotons of lithium, enough to support over 375 million batteries for electric vehicles. A plan is in place to build a lithium and renewable power production facility over the resource-rich site, despite lawsuits and concerns from local environmental protection groups.
Lithium extraction and mining is just one part of the process. Only around 2.1% of lithium is refined in the U.S.
Supply chain issues
According to Reuters, China currently accounts for almost two-thirds of the world's lithium processing, 75% of its cobalt processing, a staggering 95% of its manganese capacity and nearly all of its graphite capacity.
“If you have geopolitical risk, say there's a problem in the South China Sea and China invades Taiwan, for instance, all of a sudden trade just shuts down through the South China Sea,” Collins said. “Then it doesn't matter how much lithium you can mine in the U.S., how are you going to even get it refined?”
According to a clarification issued by the Biden administration at the end of 2023, both the Bipartisan Infrastructure Law and the Inflation Reduction Act explicitly exclude any company operating from a "Foreign Entity of Concern" (FEOC) from receiving the tax credits and funding granted when investing in EVs. These countries included Russia, North Korea, Iran and China, despite the latter holding a large percentage of the global battery and lithium refining supply chain.
Essentially, no EV can qualify for a federal government subsidy or tax credit if it contains battery components that are manufactured or assembled by a FEOC. In 2025, that rule will apply to include parts of the battery that have been extracted, processed or recycled by a FEOC as well.
According to Collins, the Inflation Reduction Act is responsible for large car companies pledging more manufacturing of electric vehicles.
“[The act] provided a lot of subsidies for automotive companies to build environmentally friendly technologies to invest in the U.S.,” Collins said. “So, all of those battery factories that were announced in the U.S.– they’re doing the final battery assembly, not [processing] the raw materials,” he said, referring to announcements by Ford, General Motors and Toyota.
“When you read the news, you think, oh, yeah, we're going to be working to onshore electric vehicle battery manufacturing in the United States, but the whole supply chain is from somewhere else. It’s only the final assembly of the product that happens here,” he said.
Collins says instead of focusing on lithium production here, the U.S. is likely to shift their source of imports to America’s allied countries.
Northvolt, a Swedish battery developer, announced a plan to build a battery production plant in Northern Sweden, with the European Union’s investment bank contributing close to $1 billion, according to the Wall Street Journal. The plant would compete for China’s domination in the lithium production global market.
“You'd have a pretty good supply chain with the United States being friendly [with European] countries geopolitically,” said Collins.
Collins says the eventual hope for the U.S., is sourcing critical metals locally and moving the refining process to allied European countries, which can help the logistical process be more efficient especially with the rapid growth of EVs in Europe.
In addition to lithium, other essential metals for EVs (and other electronics) like cobalt and manganese are mostly mined and exported out of parts of Africa, largely utilizing slave labor to do so.
Mining on public lands
In May of 2023, the Biden administration clarified that an 1872 mining law reserves the right for minerals to be mined on land funded by U.S. taxpayers.
“I get concerned when we start talking about mining in nationally protected areas,” said Kevin Dooley, chief research scientist for The Sustainability Consortium at Arizona State University.
“You know, like national parks or conservation areas, because there's a reason why those areas were designated as needing to be protected,” he said. “So going in there, it's always very hard to minimize your literal footprint when you're going into those lands. (But) the Salton Sea is a very different story.”
It's a different story because the Salton Sea — owned primarily by the Federal Government, including the Bureau of Reclamation and the Bureau of Land Management, as well as a few private holdings and the Bureau of Indian Affairs — is not like most nationally protected parks in the country.
Most large water bodies in the Southwest form due to natural overflowing of the Colorado River over time, but the Salton Sea formed due to floodwater breaching an under-construction irrigation canal in 1905. Since then, the Salton Sea’s water comes mainly from irrigation runoff from local rivers in the Imperial and Coachella valleys. Because the Sea is a terminal lake, or a body of water with no outlet, it has a more concentrated salinity, 50% greater than the ocean.
As it relates to the Salton Sea, the most dangerous aspect of lithium mining is its effect on groundwater reserves. By pumping salt water to the surface and evaporating it to extract metals, the process can seriously damage the surrounding water sources and biodiversity.
Environmental impacts of lithium mining and batteries
After production, electric vehicles have far lower carbon emissions than gas-powered vehicles. However, the process to mine, refine and assemble EVs, particularly their batteries, is environmentally damaging.According to a report by MIT’s Climate Lab, one ton of mined lithium emits nearly 15 tons of CO2. According to the same report, burning the fossil fuels required to manufacture lithium or EV batteries contributes to high levels of CO2 emissions.
A recent investigation by the Howard Center found that the brining process, used to extract lithium hidden in saltwater, uses hundreds of millions of gallons of fresh water per year. Over-pumping groundwater can not only decrease source levels, but also damage surrounding aquifers and can cause fissures in the ground.
“Even though [the U.S.] has better controls over pollution from mining than a lot of other countries where minerals are mined, it can still be a dirty, destructive process to the local ecosystem,” said ASU’s Dooley. He went on to add, “What do we do with the batteries after the end of their first life? How can we lead them to a successful second or third life until they're truly no longer useful at all?”
Lead-acid batteries, the type used in gas-powered automobiles, are easily recyclable, with only a small percent going to landfill.
On the other hand, only 5% of lithium-ion batteries are recycled every year. Last year, however, lithium-battery recycling plant construction increased at a rapid pace. Around 40 companies in Canada and the U.S. and 50 companies in Europe recycled lithium batteries or planned to do so, according to the U.S. Geological Survey.
Waning demand for EVs?
While electric vehicle adoption rate in the U.S. is generally on the rise, it is not the average American’s vehicle of choice, despite subsidies and tax benefits. Factors like affordability, access to chargers, maintenance and the amount of space in the U.S. relative to other countries makes it difficult for many to make the switch.
“No one wants to take a road trip or deliver materials in a rural area where you have to wait there for six hours to charge the vehicle and you only get 300 miles out of that charge,” Collins said.
From the supply chain perspective, major car companies are already scaling back on their promises for more investments in EVs because of the lack of demand from American drivers.
“The challenge of that supply chain is largely playing out now. Because before, the forecast was by 2035, 50% of the vehicles in the world would be electric vehicles,” said Collins. “All of the companies [were] going big time into electric vehicles. And now they've cut back because the demand is just not there.”
Despite a possible slowing of demand for EVs, and despite the environmental consequences of opening up more lithium mines, supply chain issues and the price commanded by lithium in the global market – which climbed from around $12,000 per metric ton in 2019 to $46,000 per metric ton in 2023 – are likely to result in continued pressure for increased lithium production in the U.S.
