The Race to Secure Clean Energy Materials

December 06, 2021

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by Ben Gelman (Axios) Minerals used in power generation technologies ... One persistent theme in analyses of the transition to cleaner energy is the scramble to obtain supplies needed for renewables projects, electric vehicle batteries and other low-carbon tech.

The big picture: "A typical electric car requires six times the mineral inputs of a conventional car and an onshore wind plant requires nine times more mineral resources than a gas-fired plant," the International Energy Agency noted in a report this year on critical minerals.

Zoom in: In recent days the New York Times published a deeply reported series on the race to secure supplies of cobalt — a key battery input — from the Democratic Republic of Congo, where Chinese companies have been major dealmakers.

"The American government failed to safeguard decades of diplomatic and financial investments it had made in Congo, even as China was positioning itself to dominate the new electric vehicle era," it reports. READ MORE

The supply crunch that could slow the climate fight (Axios)

How the rise of electric cars endangers the ‘last frontier’ of the Philippines: A mine that supplies nickel for the batteries that power electric vehicles is on the verge of a major expansion into a pristine rainforest. (NBC News)

HAALAND IN FOR MINING: (Politico's Morning Energy)

Biden's green agenda requires batteries, but building them is dirty business (Politico)

China is owning the global battery race. That could be a problem for the U.S.: Electric cars rely on lithium-ion batteries. China produces 76 percent while the U.S. makes only 8 percent. (Grid; includes AUDIO)

The US Inches Toward Building EV Batteries at Home: In an effort to reduce dependency on hard-to-source cobalt and Chinese manufacturing, US makers are finally getting into the cathode business. (Wired)

Federal Government Backs Increasing Domestic Minerals Supply Chain Needed for EVs (NGT News)

Carmakers dream of clean, green, mean electric machines (Reuters)

Graphite emissions fuel search for solutions along EV supply chain (S&P Global)

Excerpt from Axios: Soaring amounts of key minerals used in clean energy tech are needed to fight climate change, but costs and supply risks could create big headwinds, a new International Energy Agency analysis finds.

Why it matters: "Today’s mineral supply and investment plans fall short of what is needed to transform the energy sector, raising the risk of delayed or more expensive energy transitions," IEA warns.

The big picture: Growth in solar and wind, electric vehicles, stationary battery storage and other grid technologies will require much more lithium, cobalt, nickel, copper, graphite, rare earth elements and more.

That's especially true for clean tech deployment on a scale consistent with the goals of the Paris climate deal.
Though it varies by mineral, aggregate demand quadruples over two decades in IEA's "Sustainable Development Scenario." That's an energy system model that keeps temperature rise well below 2°C.
But new supply projects have a considerable time lag and are often accompanied by price volatility.

The intrigue: "An even faster transition, to hit net-zero [emissions] globally by 2050, would require six times more mineral inputs in 2040 than today," IEA finds.

Threat level: Rapid scale-up of clean energy could face "huge questions" about commodity reliability, availability and prices that could slow cost declines and create bottlenecks. READ MORE

Excerpt from Politico's Morning Energy: HAALAND IN FOR MINING: Interior Secretary Deb Haaland seemed to get behind domestic mining of critical minerals to bring home the supply chain of electric vehicle parts. Speaking at the Western Governors Association meeting in California late Thursday, Haaland said “of course, it's absolutely imperative that if we're looking for a way forward that we can do it here in this country.” Critical minerals needed for EV and energy storage parts are largely sourced in countries with dubious human rights records, such as China and the Democratic Republic of the Congo. The Interior Department stressed that any domestic extractions should be done with thorough community engagement and “the highest environmental, labor, and sustainability standards.” Ben has more for Pros. READ MORE

Excerpt from Grid: Ubiquitous in the modern economy from cellphones to laptops, lithium-ion batteries are now hot commodities on a larger scale. As countries strive to meet the 2015 Paris Agreement climate targets, the International Energy Agency projects skyrocketing global demand for electric-vehicle-sized lithium-ion batteries — a twentyfold jump in the next decade.

Chinese companies are poised to meet that surge in demand. In 2021, more than 3 million electric cars were sold in China — making it the largest market for the vehicles — and the country’s battery industry is growing exponentially to keep pace. Once a laggard, China’s share of global lithium-ion battery production capacity was 76 percent in 2020; the U.S. share? A mere 8 percent.

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The price of lithium carbonate, one of the main raw materials used in batteries, jumped by nearly 500 percent last year, and a recent Bloomberg New Energy Finance report projects 2022 will see the first increase in lithium battery prices in a decade.

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Billy Wu, a battery engineer and senior lecturer at Imperial College London, told Grid that U.S. policymakers are starting to realize when it comes to batteries, “if you have no native producers, then you will ultimately be at the whim of China.”

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Over the past decade, the Chinese government has provided more than $100 billion to the “new energy” vehicle industry (which includes electric and hydrogen fuel cell vehicles), according to the Center for Strategic and International Studies. The support has come mostly in the form of generous subsidies and tax rebates for buyers.

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The Chinese government didn’t stop at funding for the cars themselves; as early as 2012, the government provided $214 million in electric vehicle research funding primarily for battery technologies, along with tax breaks for factory land, according to Tu Le, the founder of Sino Auto Insights, a consultancy firm.

At the same time, China blocked foreign competition.

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In 2012, Chinese companies supplied lithium-ion batteries for just 10 percent of the electric vehicles sold worldwide; by 2019, the figure was roughly 50 percent.

Chinese companies — often backed by the government — have also been strategic about securing mineral supplies for batteries. Lithium is mined predominantly in Australia and Chile, and Chinese companies have invested in these countries to gain access. CATL also received over $100 million in loans from state-owned banks to establish its lithium supply chain in China’s western Qinghai province, the New York Times recently reported. Similarly, cobalt, another important battery ingredient, is produced almost exclusively in the Democratic Republic of the Congo; a New York Times investigation found that 15 of that country’s 19 cobalt mines were owned or financed by Chinese companies, backed by billions from state-run banks.

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The authors went further, suggesting that the United States’ relatively weak position presents a geopolitical and military threat. With lithium refining and battery components so heavily controlled by Chinese companies, the U.S. electric vehicle supply could prove vulnerable to future trade spats; and as the U.S. military goes electric to lower its carbon footprint, ensuring a domestic battery supply chain becomes a national security priority.

“It does not help to make the batteries here,” said Sam Jaffe, a vice president at E Source, a utility research firm, “if someone can shut off our supply of lithium or nickel or cobalt.

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Currently, most U.S. electric vehicle battery imports come from Japan and South Korea, but Jaffe said the U.S. might also import from China going forward. READ MORE

Excerpt from S&P Global: Production of graphite, the largest component of electric vehicle batteries by volume, relies on petroleum coke and other fossil fuels, creating a dilemma for carmakers pushing EVs as a zero-carbon transportation solution.

An EV requires about 10 to 15 times more graphite in a battery than lithium. The graphite that will go into making the estimated 9.5 million EVs sold in 2022 could generate roughly 11.17 billion kilograms of CO2 equivalent during production, which is comparable to driving 2.5 million gasoline-burning passenger vehicles for a year.

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Synthetically made graphite is produced from oil byproducts, such as calcined petroleum coke and coal tar pitch. During the graphitization process, the feedstock is heated to at least 3,000 degrees Celsius in furnaces often powered by coal.

In contrast to synthetic graphite's chemical origins, natural graphite is mined from ore bodies and can be significantly less energy-intensive to produce, depending on the type of raw materials, technology and energy mix used. Making natural graphite for batteries can still come with environmental consequences, according to industry experts. Mined graphite is typically purified using hydrofluoric acid and sodium hydroxide, a process that can be dangerous to surrounding ecosystems if runoff and wastewater are not properly controlled. And calcined petroleum coke is used to upgrade the graphite.

"Graphite is a very energy-intensive production process, whether that's natural or synthetic," said Robert Pell, co-founder and CEO of Minviro, a U.K. consultancy firm that conducts life cycle assessments for graphite and other mineral companies. "That impact was quite significantly underestimated historically."

Graphite production is concentrated in China, which mines 69% of the world's graphite and produces 100% of spherical graphite, or battery-grade anode material, according to Benchmark Mineral Intelligence.

"There's a reason why the energy-intensive graphitization process sits there: The energy is cheap because it's coal-dominant," Pell said. "When you look at that in the context of where that material is going, for the low-carbon transition, there's obviously a contradiction there." READ MORE