Lithium: a coming of age story
Today, the biggest use cases for lithium have little to do with either. In the space of a few decades, it’s become a cornerstone for addressing one of the world’s most universal and serious problems: our dependence on fossil fuels for energy.
Commercialized by Sony in 1985, lithium-ion batteries are the most promising source of clean, carbon-free energy we’ve seen in a long time. Rechargeable Li-ion batteries have become essential to digital technology, which in turn has become essential to the way our world now operates. Li-ions are powering everything from cell phones to computers to transit system buses. Now they’re becoming a game changer once again, this time in the power supply sector, presenting new possibilities for vehicle electrification and grid/off-grid energy storage systems (ESS).
Until recently, Li-ion batteries couldn’t store much energy for any length of time. So they were of limited use in things like cars that need large, sustained sources of power. But the technology has come a long way in the last few years. Li-ion batteries have dramatically improved in capacity and durability. And there’s a lot riding on them continuing to become better still.
As a society, we are coming to accept that the electric-vehicles movement is no longer a question of “if” but “when.” Lithium is making that transition possible. Many forward-thinking governments and economies are already on the electric-vehicle bandwagon, with more joining all the time.
By 2040, the UK and France will make only electric vehicles. Norway has agreed to end sales of gas and diesel cars by 2025; India by 2030. Volkswagen plans to sell up to three million electric vehicles annually by 2025, and recently placed an order for US$64 billion of lithium-ion batteries.
With its massive economy and huge demand for energy, China, the world’s biggest producer of lithium carbonate, urgently needs to address its pollution problems. The government now subsidizes new energy vehicles (EV and hybrid) and will penalize companies that exceed production thresholds for internal combustion energy vehicles. The country is determined to lead the world in this new technology that will dominate the global transportation market, improve air quality, and reduce its reliance on imported oil. Plans are afoot to install an additional 500,000 publicly accessible recharging stations to further encourage the use of electric cars. Already the world’s largest EV market, China is predicting that sales of these vehicles will reach two million per year by 2020. It too plans to impose a complete ban on internal combustion engines by 2040.
The use of lithium-ion batteries is also growing quickly in the ESS space. Many electricity providers are looking to use batteries to balance the production of solar and wind power and fill in gaps in the grid. South Australia recently installed a 100 MWh lithium-ion battery for just this purpose as it closed its final coal-fired power station.
From a big-picture perspective, it’s fascinating to watch the lithium story unfold. Right now, any player already in the space who’s been able to sustain a positive cash flow is looking to expand their existing assets or buy new ones. Economists and business analysts tell us to expect some consolidation in the sector, which is typical of emerging industries. For the time being, both the mining and refining of lithium are rapidly expanding, and this will likely continue for another 10 years or so.
Today, the global supply of lithium is limited to just a few key geographies. In Australia, the United States, and even Europe, the mining sector is again ramping up to augment the supply of hard-rock lithium traditionally supplied from Australia. In South America, the region called the Lithium Triangle is marked by many huge lithium salt flats and extends into Argentina, Bolivia, and Chile—the latter being the lowest cost and highest volume producer. The massive deposits in the Triangle are intrinsically different from anywhere else on Earth, with lithium present in salt brines only 50 metres below the surface of the terrain. Producing lithium there is a matter of having the right climatic conditions to evaporate the water, the right composition from the brine, and the technical capability to produce battery-grade lithium carbonate.
We’ve seen rapid expansion in the hard-rock and concentration industry for lithium, with all the chemical-grade concentrate currently going to China. This is changing, as Western Australia completes and ramps-up plants for lithium chemical production.
It’s a perfect confluence of activity. We’re working with our clients to build new lithium plants that are more efficient and profitable. In some cases, brand new mines, too, to ensure that the world’s supply of lithium and other essential battery metals, like copper, cobalt, and nickel, are available and suitable.
In Asia, the industry is benefiting from what modern Western chemical-plant-design characteristics can do for niche businesses: consistently increase efficiency and decrease the amount of labor needed to do it.
In the ongoing story of this remarkable metal, there is much to do. We're pulling out all the stops to improve processing technologies, maximize recovery, and constantly find better ways to deliver more product to this burgeoning market. It's the 21st century, and lithium is coming of age. It couldn't happen at a better time.