Global Courant 2023-05-14 13:00:52
Like electric vehicles become more commonthe resources that help power the new generation of transportation are increasingly valued.
Lithium – a metal that is a key element in the batteries commonly used in today’s EVs – has become an incredibly popular product in recent years. According to the Geological survey of the United Statesglobal consumption has increased by 41 percent between 2021 and 2022.
Elon Musk, the CEO of Tesla, called lithium-based batteries “the new oil.”
While lithium prices fell 65 percent in 2023 after a two-year rapid increase, analysts still expect hundreds of new mines to be needed to meet the rising demand for electric vehicles.
So where does this new critical resource come from and how can Canada capitalize on its economic potential?
The brine pools and processing areas of the Rockwood lithium plant on the Atacama Salt Flat in northern Chile. (Ivan Alvarado/Reuters)
Where does lithium come from?
Lithium is not found as one isolated metal in naturebut quantities of the resource can usually be obtained underground deposits of hard rock and brine.
Hard rock resources are often accessible through traditional mining techniques, while brine lithium is usually extracted through a months-long evaporation process, said Craig Johnson, a political science professor at the University of Guelph who leads a research team looking at lithium mining in five countries.
Hard rock mining can have long-term impacts on the landscape and brine extraction is immensely water-intensive, while the long-term effects on ecosystems, wildlife and nearby communities are not well understood, Johnson said.
Community members and researchers have expressed concern about the potential negative consequences of these practices.
“There are costs associated with the extraction of lithium,” said the researcher.
New techniques are being developed to streamline extraction operations, but Johnson said they have yet to be scaled.
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Where is mining?
Australia, the world’s largest producer of lithiummines mostly hard rock, while Chile — once holding the title of the world’s largest producer — now ranks second and uses mostly vaporization, Johnson explains.
Canada 2022 produced an estimate 500 tons of lithium – an amount dwarfed by the tens of thousands of tons produced by global lithium powerhouses.
In terms of sheer quantity, the US Geological Survey states that Chile has the world’s largest reserves of lithium – or proven mineable deposits – at 9.3 million tons while Bolivia has the most total lithium reserves of any country with 21 million tons, but the mining potential of these deposits has yet to be proven.
Australia picked up as the largest producer of lithium around 2017, and Johnson attributes the country’s rise to effective financing and simple geography.
“The fact that Australia is so close to the Asia Pacific and has such good access to those big markets in South and Southeast Asia really helps it position itself in a way that countries like Chile or certainly Bolivia really would be difficult,” he said. .
Who processes it?
Lithium doesn’t go straight out of the ground into an EV. After extraction, the mineral is processed and then manufactured into a functioning battery.
Johnson notes that China — the world’s third-largest producer of lithium — connects “the next link in the supply chain,” often acting as the world’s processor and manufacturer.
“For the past decade, China has occupied this really critical niche where it has become the world’s leading producer of lithium-ion batteries and electric vehicle components,” he said.
The International Energy Agency indicates that China produces about three-quarters of lithium-ion batteries, with the last 25 percent coming mainly from the United States, Europe, Japan, and Korea. China is also responsible for more than half of the world’s lithium refining.
The United States and the European Union have adopted policies to reduce China’s role in the supply chain, Johnson said. Despite these efforts, the International Energy Agency still expects China to be responsible for 70 percent of battery production by 2030.
“That’s a formidable challenge, to say the least,” Johnson said.
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The world is on the verge of an EV revolution and car manufacturers are scouring the globe for the resources needed to make all those batteries. Canada has many of the required critical minerals (cobalt, nickel, lithium). But can it move fast enough to turn a profit while balancing the interests of the environment and indigenous groups?
How does Canada fit into the picture?
Evan Pivnick, program manager for the Clean Energy Canada think tank, says Canada should take advantage of its critical mineral resources.
“Lithium is a very important opportunity for Canada,” he said.
According to Natural Resources Canada, Canada has access to the sixth most lithium reserves of any country. But Canada’s 681,000 tons is far less than Chile’s or Australia’s 9.2 million and 5.7 million tons, respectively, and represents three percent of the world’s total reserves.
While production in Canada is limited, the tide could turn, Pivnick said. Lithium mines inside Manitoba and Quebec started production last year, and more projects are in various stages of planning.
“I think we’re a long way from reaching our full potential here, but it’s very clearly on the agenda as it was less than a year ago,” he said.
Canada’s Critical Mineral Strategy was released in late 2022 and identified lithium as one of six priority minerals to pursue for economic growth potential and supply chain needs.
Pivnick sees the strategy as “a huge step forward” and projects like the recently announced $13 billion Volkswagen battery plant in St. Thomas, Ont. can help build Canada’s supply chain.
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But Pivnick says he would like to see a more comprehensive plan that further positions Canada as a value-added country. “I think we need to move on. I think what we’re still really missing in Canada is a battery strategy.”
“It really sees the upstream flow as a critical opportunity for Canada,” he said. “Not just the return to the ‘woodcutters, water-loading’ mentality.”
Pivnick doesn’t expect Canada to disrupt the global order of lithium production any time soon.
But countries are beginning to prioritize geopolitical reliability over cost, and in this context Canada is clearly advantaged by its long-standing relationships with the United States and the European Union, Pivnick says.
“It is no longer just a matter of production at the lowest cost – it is security of supply.”
