Critical minerals for the energy transition: lithium, cobalt and nickel

Continuing my series on critical minerals, in this post I will look at some of the main metals required for lithium-ion batteries, the core component in electric cars and current battery-based grid-scale electricity storage solutions, lithium, cobalt and nickel. In a lithium-ion battery, the movement of lithium ions between the anode and cathode generates free electrons in the anode, which produce the actual charge at the positive end terminal of the battery which then flows to the motors or electronics being powered.

Lithium-ion batteries are charged and discharged through the flow of lithium ions between the anode (positively charged) and the cathode (negatively charged). Cathodes contain nickel which helps to deliver energy density, and cobalt which ensures they don’t easily overheat or catch fire and helps to extend battery life.

A typical electric car needs 9 kg of lithium, 13kg of cobalt, 40 kg of nickel, 25 kg of manganese and 66 kg of graphite. Although lithium-ion batteries are used in a wide range of consumer electronics and in stand-alone batteries, the transportation segment, including EVs is the largest user of lithium and demand is set to grow significantly.

I have included information on some of the extraction and processing techniques used to give an idea of the energy inputs and requirement for various toxic chemicals for example the widespread use of acids. This results in large quantities of toxic waste which must be appropriately handled.

Water-hungry lithium extraction is centred in some of the driest places on earth

Lithium plays a crucial role in battery batteries, and as such, demand for the metal has shown strong growth since the development of the electric vehicle market. The global market for lithium was estimated to be US$ 7 billion in 2022, and could reach more than US$ 22 billion by 2030. Cobalt is also used in the magnets of wind turbines. Demand is forecast to outpace supply in 2028 and onwards. 

According to the US Geological Survey, global lithium resources are estimated at 98 million tonnes, but only around a quarter of that is considered to be reserves which are economically viable to mine. While lithium has been found on each of the six inhabited continents, Chile, Argentina, and Bolivia—together referred to as the “Lithium Triangle”—hold more than 75% of global lithium resources beneath their salt flats. Unfortunately, the Lithium Triangle is also one of the driest places on earth, which complicates the extraction process, which is heavily water intensive.

Most lithium is produced through saltworks, in which a well is bored to pump water rich in lithium salts into large, shallow basins, where it is evaporated by the sun. It takes between 18 and 24 months to produce a brine rich in lithium chloride, consuming around 2 million litres of water for every tonne of lithium produced. Several chemical processes are then used to obtain lithium carbonate or lithium hydroxide, which supplies battery manufacturers. Five major corporations dominate this market: Albemarle (US), Ganfeng Lithium (China), SQM (Chile), Tianqi (China) and Livent (US).

The individual battery components – the anodes, cathodes and separators – are combined to form lithium-ion cells which are then integrated into shock-resistant batteries equipped with heating and cooling systems and electronic control units. So-called “gigafactories” are enormous assembly plants which produce the finished batteries, whose output is measured in gigawatt hours of storage capacity. In future, gigafactories could also recycle used batteries and integrate the assembly lines of the electric cars themselves.

Currently, Chinese businesses account for around 70% of the electric vehicle battery market, followed by Korean and Japanese manufacturers. One third of the world’s electric vehicle batteries come from a single Chinese corporation – CATL. Although Chinese companies account for only 14% of actual lithium mining, they are responsible for 89% of lithium refining, 75% of the world’s lithium-ion cell manufacturing and 70% of battery production plants. China also produces 43% of the electric vehicles sold worldwide.

The EU and US are scrambling to catch up, with mixed success. According to a report by the European Court of Auditors released in mid-June 2023, the EU’s approach has been both risky and ineffective. The EU is also trying to secure access to lithium, for example by the signing of a memorandum of understanding with Argentina in June 2023 on essential raw materials, including lithium. Some 40 gigafactories are either planned or operating in the EU, to keep up with competition from China and the US.

In the US, the Inflation Reduction Act and other measures are stimulating increased production of electric cars and their batteries. EV battery manufacturing capacity in North America is forecast to increase from 55 GWh /yr in 2021 to almost 1,000 GWh /yr by 2030, with more than US$ 40 billion of investment planned for these factories according to a report from the Federal Reserve Bank of Dallas. By 2030, this battery manufacturing should support the production of 10 – 13 million EVs per year. Concerns over access to lithium is also spurring US car-makers to invest directly in mining companies and enter into their own off-take agreements and then supplying battery-makers rather than leaving it to the battery companies to source their own lithium. Both of these could be considered risky since they expose car manufacturers to the notoriously volatile mining sector, but many feel they have no alternative of they are to meet expected EV demand.

There are also concerns around the environmental and social impacts of lithium extraction. Governments across the Lithium Triangle promise their citizens that lithium and other mining will be a route out of poverty, but that poverty itself limits their ability to participate in the benefits since they rely on external providers of capital. Lithium mining requires significant financial and technological investments, and so far, no foreign firm has beenas been has been willing to make these investments without also retaining control of the projects.

It took until 2018 for Bolivia to find a partner. ACI Systems Alemania, a German firm, entered into a joint venture with the Bolivian government and planned an investment of US$1.3 billion for the use of lithium. Unfortunately, this has not been a true partnership and the local population is not benefiting from increased employment as few jobs have been offered to unskilled, indigenous workers, and even fewer well-paid jobs. This led to protests, demands for higher royalties and a greater allocation of the mining revenues, and after just a year the legislation enabling the joint venture was rescinded. It has been a similar story in Argentina, where local opposition is growing.

In addition to tensions over the economics of these projects, there are also issues around their water use. Lithium extraction in Bolivia, Argentina, and Chile requires around 500,000 gallons of water per ton of lithium. In Chile’s Salar de Atacama, lithium extraction has consumed 65% of the region’s water supply, which has created extreme water shortages, and had a major impact on the abilities of local farmers to grow crops and maintain livestock.

The extraction process also contaminates both water sources and the air. In Tibet, Chinese lithium mining has leaked chemicals like hydrochloric acid into the Liqi River, which resulted in the poisoning of fish and livestock. Similar effects are being seen within the Lithium Triangle. In Chile, local communities have criticised mining companies for polluting their waters and covering landscapes in blankets of discarded salt. In Argentina, miners are accused of contaminating streams used to provide drinking water to both humans and livestock as well as for crop irrigation.

This has prompted calls for more sustainable approaches to lithium extraction. There is hope that emerging approaches such as direct lithium extraction which involves removing lithium from a brine solution and then purifying it would reduce the water requirements. This approach has been used on a commercial scale in Argentina and China.

Cobalt is by far the most problematic transition mineral being associated with significant human rights abuses

Cobalt is another key component in batteries. Analysts estimate that cobalt mining will require an annual investment of US$1 billion to keep pace with the output necessary for meeting 2050 de-carbonisation targets.

Global cobalt supply, both primary and secondary, was projected to exceed 200,000 MT in 2023 and could double by 2030. Primary production is expected to remain the key driver, although secondary supply from recycling could account for a third of overall supply growth. The share of secondary supply is projected to rise from 5% in 2022 to 15% by 2030, as recycling capacity expands, and larger volumes of battery scrap become available.

The Democratic Republic of Congo (“DRC”) is the world’s leading producer of mined cobalt, accounting for about 73% of global production in 2022, although this share is projected to fall to 57% by 2030. Indonesia is the second largest producing nation and is expected to grow quickly – from 2022 to 2030, Indonesia has the potential to increase cobalt supply by 10 times, compared to projected growth for the DRC of just 66% over the same period. Supply is expected to exceed demand in the short term, prolonging a surplus that began in 2022 to at least the middle of this decade. Longer-term, the market is projected to move to a structural deficit as supply growth slows and demand continues to rise rapidly. Demand is expected to grow with a CAGR of 10% to 2030, compared to 6% for supply.

With the exception of some production in the United States, Morocco, and artisanally mined cobalt in Congo, most cobalt is mined as a byproduct of copper or nickel. China was the world’s leading producer of refined cobalt, most of which was produced from partially refined cobalt imported from Congo. China is also the world’s leading consumer of cobalt, with about 80% of its consumption used by the rechargeable battery industry.

The world’s largest producer of cobalt is the DRC, where it is estimated that up to a fifth of the production is produced through artisanal miners. These small mines are often dangerous and polluting, and the mining and refining processes are often labour intensive and associated with a variety of health problems as a result of accidents, overexertion, exposure to toxic chemicals and gases, and violence. Most artisanal miners, or “creuseurs” as they are commonly known, dig for cobalt in shaft-like holes that can range from between 3 and 50 meters deep with no support beams or mechanised equipment. It is currently estimated that between 140,000-200,000 people work as artisanal miners in the DRC typically earning less than US$10 per day, although they are heavily reliant on this income.

The DRC is a poor country, ranking 175th of 189 countries in the United Nations Human Development Index. The country suffers from foreign interference, internal division and weak governance, and has yet to recover from the Second Congo War of 1998-2003, in which 5.4 million people died, making it the deadliest conflict since World War II. In most cases, creuseurs fail to produce enough ore to earn a living, meaning many illegal mining families experience hunger and malnutrition.

Many creuseurs are women, but the US Department of Labor estimates that at least 25,000 children also work in cobalt mines in the DRC. They have no protective gear, and are directly exposed to cobalt dust, which has been linked to many respiratory diseases, including lung disease, as well as cancers and birth defects. Studies have found cobalt mining is associated with increased violence, substance abuse, food and water insecurity, and physical and mental health challenges. Communities have lost communal land, farmland and homes, which have been dug up in order to extract cobalt. Without farmland, Congolese people were sometimes forced to cross the border into Zambia to buy food.

The environmental costs of cobalt mining are also significant. There has been significant de-forestation in the Congo Basin to make way for cobalt mines with millions of trees having been sacrificed to mineral extraction in the region. Mining causes air pollution, turning the air around mines hazy with dust and grit, which is toxic to breathe. Studies have shown elevated risk of birth defects, such as limb abnormalities and spina bifida, when a parent worked in a cobalt mine.

Mining waste pollutes water sources and soil, leading to decreased crop yields, contaminated food and water. High concentrations of cobalt have been linked to the death of crops and worms, which are vital for soil fertility. Fish die as a result of acids and other wastes from mines leached into water sources. A study that collected fish from the Tshangalale lake, close to mining towns, found the fish were contaminated with high levels of cobalt. This contamination is easily spread to humans by eating the fish or drinking of lake water.

In addition to its social and environmental challenges, cobalt is one of the most expensive components of a battery, which is incentivising research into alternatives. One route is to increase secondary supply through more recycling. In February 2019, the US Department of Energy launched a pilot scheme called the ReCell Center to explore cost-effective ways to reclaim the lithium and cobalt from lithium ion batteries, as well as a US$5.5 million prize for solutions to the collection, storage and transportation of discarded lithium ion batteries. The UK has a battery recycling initiative called Reuse & Recycling of Lithium-ion Batteries, or ReLiB. Japanese company, Sumitomo Metal Mining Co has developed a method for melting down spent electric vehicle batteries and recovering the cobalt, however, it will take some time before large amounts of used batteries will become available for recycling.

Other companies such as Tesla are exploring cobalt-free batteries. It reported that half the vehicles it made in the first quarter of 2022 were produced using cobalt-free lithium iron phosphate (also known as lithium ferrophosphate or LFP). However, as most transition minerals are associated with both human rights abuses and environmental harms, it is hard to see this as more than an economic rather than ethical move. It is also argued that avoiding the use of cobalt would deny workers in poor communities a valuable source of income.

Cobalt is the most problematic of all the transition minerals, and is associated with the worst human rights violations. Some activists are calling for cobalt produced under such conditions to be shunned in the same way that so-called “blood” or “conflict” diamonds have been. The difficulty is that while few people “need” diamonds (although it is necessary in some industries), and it is now possible to produce them in laboratories, it is relatively easy to avoid diamonds with a troublesome provenance. It is much harder to avoid using Congolese cobalt. This is leading some to argue that other approaches to de-carbonisation of transport should be adopted, avoiding the need for batteries altogether, for example greater use of public transit systems. Many people believe their electric cars are “good for the planet” but in many cases they are very bad for a great many people living in it.

Nickel is expensive to produce as most ores contain little useful metal

Nickel is another metal essential to the design of rechargeable batteries, and is the fifth most abundant element on earth. It is the most important metal by mass in the cathode of a lithium-ion battery, accounting for up to 80% cathode weight in nickel-cobalt-aluminium cathodes (“NCA”) or in some nickel-manganese-cobalt (“NMC”) cathodes. Nickel is the most expensive material in electric vehicle batteries after cobalt.

Nickel is used widely in stainless steel and other industrial applications, and is alloyed with other materials to create metals resistant to corrosion and maintain exceptional high-temperature strength and other unique properties, such as shape memory and low amounts of expansion.

In nuclear power plants, nickel is mixed into alloy materials used in the heat transfer and cooling systems and inside the reactor vessel. Thermal solar or concentrated solar plants also depend on nickel alloys for heat-transfer purposes, while hydro and wind energy generation depend on turbines containing nickel. Nickel also faces uncertainties in supply and perhaps a substantial deficit in the years to come.

Nickel occurs naturally, mostly as oxides, sulphides and silicates, with economic concentrations being found in sulphide and in laterite-type ore deposits. There are many different nickel ores requiring a variety of extraction techniques. There are several different variations of nickel products, the most common being: wrought nickel, nickel-pig iron, nickel-iron alloys, nickel-copper alloys, nickel-molybdenum alloys, nickel-chromium alloys, nickel-chromium-iron alloys, nickel-chromium-cobalt alloys, nickel-titanium alloys. Over two million tonnes of new or primary nickel are produced and used annually in the world.

Nickel supply has exceeded demand since 2022 with the structural surplus increasing in 2023 as a result of weak demand from the stainless steel sector in Asia and Europe, despite demand growth from the EV market, with increased supply from Indonesia and China contributing to market length. However, the market is expected to tighten in 2024 as demand grows while little new supply is expected, particularly for the high-purity class 1 nickel required for batteries. This subset of nickel demand is expected to move into deficit as soon as 2024, and with long lead times for new mines, deficits could persist for years.‍

Long-term, nickel demand is forecast to double to six million tonnes by 2040, with the use of nickel in electric batteries growing from a nickel market share of 7% in 2021 to 40% by 2040, although some analysts believe this growth could come sooner – Goldman Sachs estimates electric batteries will represent 32% of global nickel demand by 2030.

Nickel-containing ores are currently mined in more than 25 countries worldwide. Australia, Indonesia, South Africa, Russia and Canada account for more than 50% of the global nickel resources. Although almost 80% of all nickel mined to date was extracted over the past three decades, known nickel reserves and resources have grown steadily. Improved technologies in mining, smelting and refining, also allow for lower-grade ore to be processed. There are also thought to be significant nickel deposits in the deep sea, for example within manganese nodules, found on the deep-sea floor, which contain significant amounts of nickel. Recent estimates suggest there may be more than 300 million tons of nickel contained in such deposits.

Most mined nickel derives from two types of ore deposits formed in very different geological environments: magmatic sulphide deposits, where the principal ore mineral is pentlandite, and laterites, where the principal ore minerals are nickeliferous limonite and garnierite (a hydrous nickel silicate). Magmatic nickel sulphide deposits form when magmas derived from the earth’s mantle ascend into the crust, in some cases reaching the earth’s surface, and crystallise into iron-magnesium-nickel-rich mafic and ultramafic rocks containing concentrations of nickel-rich sulphide minerals. In some deposits the nickel is associated with concentrations of platinum-group elements and copper, which increases the value of the ore.

Laterite-hosted nickel deposits form by the weathering of ultramafic rocks and are a near-surface phenomenon related to tropical climates. It is estimated that around 65% of the worldwide nickel deposits are laterite, and the remaining 35% are sulphide. Laterites are mined in open pits while sulphides are extracted from underground mines.

Lateritic ores contain large amounts of moisture which must be removed – drying removes free moisture, while chemically bound water is removed by a reduction furnace, which also reduces the nickel oxide. Dryers 50m long and 5.5m in diameter are common, while reduction kilns 5 – 6m in diameter and more than 100m long are required to handle the large tonnages of ore and to provide the necessary retention time. After this, the nickel oxide is reduced in an electric furnace at 1,360 – 1,610^oC to form nickel metal. Some laterite smelters add sulphur to the furnace to produce a matte – an intermediate product with a nickel content of 30 – 60% – for processing, however, most laterite smelters produce a crude ferronickel, which, after refining to remove impurities such as silicon, carbon, and phosphorus, is marketed as an alloying agent in steel manufacture.

Sulphide ores are crushed and ground, and the nickel extracted through selective foam flotation in which the ore is mixed with reagents and agitated by mechanical and pneumatic devices that produce air bubbles. The sulphide particles adhere to the air bubbles and are collected as a concentrate containing 6% – 12% nickel. The tailings are frequently run through a second cleaning step before being discarded. Because some nickel-bearing sulphides are magnetic, magnetic separators can be used in place of, or in conjunction with, flotation.

Nickel concentrates may be leached with sulfuric acid or ammonia, or they may be dried and smelted in flash and bath processes, similar to those used in copper production. Nickel requires high smelting temperatures (1,350 °C) in order to produce nickel matte. The iron in the matte is converted to an oxide, which combines with a silica flux to form a slag inside a rotating converter. The slag is drawn off, leaving a matte of 70 – 75% nickel.

Various processes are used to treat nickel matte. One the ammonia pressure leach, in which nickel is recovered from solution using hydrogen reduction, and the sulphur is recovered as ammonium sulphate for use as fertiliser. In another, the matte is roasted to produce high-grade nickel oxides which are then subjected to a pressure leach, and the solution is electro and carbonyl refined. In electro-refining, nickel is deposited onto pure nickel cathodes from sulphate or chloride solutions in electrolytic cells equipped with diaphragm compartments to prevent the passage of impurities from anode to cathode. In carbonyl refining, carbon monoxide is passed through the matte, yielding nickel and iron carbonyls. Nickel carbonyl is a highly toxic and volatile vapour that, after purification, is decomposed on pure nickel pellets to produce nickel shot. Copper, sulphur, and precious metals remain in the residue and are treated separately.

One of the main problems surrounding nickel mining is that ores typically contain only a very small percentage of useful nickel, resulting in large amounts of waste material. The disposal of this material is challenging. Nickel extraction and refining is also highly energy intensive, and creates both air and water pollution.

Sulphur dioxide is a major air pollutant emitted in the roasting, smelting, and converting of sulphide ores which can release as much as 4 metric tons of sulphur dioxide per metric ton of nickel (before controls). Particulate emissions for the various process steps include 2.0 – 5.0 kg /MT for the multiple hearth roaster, 0.5–2.0 kg /MT for the fluid bed roaster, 0.2–1.0 kg /MT for the electric furnace, 1.0–2.0 kg /MT for converter; and 0.4 kg /MT for the dryer.

Ammonia and hydrogen sulphide are pollutants associated with the ammonia and acid leaching processes. Highly toxic nickel carbonyl is released in the carbonyl refining process. Various process off-gases contain fine dust particles and volatilised impurities. The transport and handling of ores and concentrates produce windborne dust.

Thousands of hectares of forest have been cleared to make way for open quarries, while toxic mud sediments, discharged by the mines, seep into the bare soil and are swept into surrounding waterways during the rainy seasons.

Mine run-off often contaminates water sources, including the sea, harming marine life and the livelihoods of fishing communities. Tailings can leach sulphuric acid into surrounding groundwater reservoirs and rivers whenever the sulphides present in them are exposed to air and water. The resulting acidic run-off can severely harm aquatic life by lowering the pH values of waterbodies. Some countries also allow deep-sea disposal of tailings.

There have been calls for the suspension of nickel mining activities in parts of Indonesia as a result of pollution, and in 2017 the Philippines closed 23 of its 41 mines over environmental concerns, although they were allowed to re-open in 2022.

Lithium-ion batteries have a high environmental cost and should be replaced by other battery chemistries

Lithium-ion batteries are a key component of the energy transition being the basis for electric cars and most battery storage approaches both in the home and on the grid. Regular readers will know that I’m not a fan: they are environmentally dirty, as this post demonstrates, and also do the job badly, particularly for grid scale applicaitons since their duration is so short.

A technology that lasts at most 4 hours before discharging is wholly unsuitable as a backup for intermittent renewable generation. It does play a useful role in fast frequency response, but so could other battery technologies. This is why I think li-ion’s days are numbered – new chemical batteries will supercede it. Some new chemistries can achieve 100 hours of storage – this is still too short, but materially better than li-ion.

I also believe better technologies will be developed for transport. Current EVs require a lot of energy to produce, are heavy, and continue to be plagued with range constraints due to inadequate charging infrastructure. The cars are also very heavy, degrading road surfaces (although lorries are more responsible for this), and higher tyre wear is in itself a source of pollution. Different battery chemistries might reduce or even remove some of these issues.

My views on electric cars have attracted large amounts of abuse – clearly some people are very invested in the notion they are virtuous. But the facts don’t justify such a position, and while conventional cars are obviously not problem-free either, policy-makers should encourage genuinely good solutions to be developed rather than landing on lithium-ion technologies as the best option. The true best option at the moment is likely to be to use existing cars until they are no longer operable, and discourage the purchase of new cars until better solutions emerge. This would certainly avoid the current situation where people are paid to scrap perfectly functional conventional cars in order to purchase electric cars, in a process that involves huge amounts of financial as well as energy and resource waste. Avoidance of waste should be the first not last consideration when addressing questions of sustainability.

In my next post I will look at the issues with some of the other ingredients of li-ion batteries: graphite and manganese.