Lithium : Journey from an unknown to a star element

Lithium an element known for 200 years to researchers in the Chemistry Departments of Universities is suddenly at the forefront of news headlines around the world. It is the primary ingredient of the lithium-ion batteries which power the next generation of electric vehicles and thus could become as precious as Oil is currently to the world.

Lithium as an element:

Lithium with its atomic number of 3, occupies the top left corner of the periodic table. It was Johann August Arfvedson a Swedish chemist and one of the students of Jöns Jakob Berzelius -the father of Chemistry, who first detected it in 1817 while analysing the mineral petalite (LiAlSi4O10), which was discovered in 1800. Berzelius called this new element lithos (Greek word for stone).  Lithium, whose silvery-white colour gets tarnished on oxidation when exposed to air, is the most electropositive (−3.04 V versus a standard hydrogen electrode), the lightest (M = 6.94 g mol−1) and the least dense (ρ = 0.53 g cm−3) solid element at room temperature, and is also highly flammable. Owing to this high reactivity, lithium is present only in compounds in nature — either in brines or hard rock minerals.

Lithium as an essential component:

Their particular physical, chemical and electrochemical properties make lithium and its compounds attractive to many fields. Apart from the recent advent of lithium-based batteries, lithium niobate (LiNbO3) is an important material in nonlinear optics. Engineers use lithium in high-temperature lubricants, to strengthen alloys, and for heat-transfer applications. It is also widespread in the fine chemical industry, as organo-lithium reagents are extremely powerful bases and nucleophiles used to synthesize many chemicals. Its effect on the nervous system has also made lithium attractive as a mood-stabilizing drug, and in nuclear research tritium (3H) is obtained by irradiating 6Li.

Energy storage, which should help mitigate the issues of pollution, global warming and fossil-fuel shortage, is becoming more important than ever, and Li-ion batteries are now the technology of choice to develop renewable energy technology and electric vehicles.

Lithium demand in Electric Vehicles:

According to figures from US Department of Energy Science and Engineering research centre Argonne National Laboratory, A Lithium-ion battery pack contains about 8kg of Lithium. 90.7 million kg of Lithium was produced globally in 2021 whereas the total reserves are about 20 billion kg according to US Geological survey.

Dividing the lithium produced by the amount needed per battery shows that enough lithium was mined last year to make just under 11.4 million EV batteries. Using the same calculation shows that global reserves are sufficient to produce just under 2.5 billion batteries.

The IEA’s Net Zero by 2050 roadmap says the world will need 2 billion battery electric, plug‐in hybrid and fuel-cell electric light‐duty vehicles on the road by that date to hit net zero. However, not all the world’s lithium can go into EV batteries. The metal is also used in batteries for a host of other items, such as laptops and mobile phones, as well as to make planes, trains and bikes.

The below chart shows the 108% jump in EV sales in 2021 which is expected to rise further in coming years putting pressure to ramp up production.

Lithium availability & extraction:

It is extremely difficult to estimate the world's lithium reserves. More than half of the world's lithium is mined in the Lithium Triangle, an arid region of the Andes that includes parts of Bolivia, Chile and Argentina. The other two places where there are substantial Lithium reserves are China and Australia.

In the Lithium Triangle the Lithium resides in underground salty water where as in other areas it is extracted from hard rocks. Extracting lithium from hard rocks is laborious and expensive, however, and most of that produced (roughly 83%) at present comes from brine lakes and salt pans: salty water is first pumped out of the lake into a series of shallow ponds, then concentrated using solar energy into a lithium chloride brine, which is subsequently treated with soda to precipitate Lithium Carbonate. Considerable amounts of lithium are present in sea water, but its recovery is trickier, and highly expensive.

A lithium brine operation at the Salinas Grandes salt flats in Argentina.

Lithium crisis & supply chain issues:

The world’s lithium reserves are theoretically sufficient to meet the expected rise in demand. However, this assumes all of the reserves can be brought into production, and that all of them are good enough for use in batteries, which is unlikely. “Only a handful of companies can produce high-quality, high-purity lithium chemical products,” the IEA says. “While several planned expansion projects are in the pipeline, there is a question mark over how rapidly their capacity can come online.”Lithium mines that started operations between 2010 and 2019 took an average of 16.5 years to develop, according to the IEA report The Role of Critical Minerals in Clean Energy Transitions. McKinsey estimates that over 80% of mining projects are completed late.

The IEA says the world could face lithium shortages by 2025. And Credit Suisse says lithium demand could treble between 2020 and 2025, meaning “supply would be stretched”. These numbers bring fears of a potential shortages, painting a dim picture. In fact Mr.Kent Masters CEO of Albemarle, the largest Publicly traded Lithium company recently warned about the tight demand-supply scenario for the rest of the decade.

The race is on around the world to secure future sources of lithium and diversify supply chains. Big auto manufacturers, battery producers, Mining firms both private and Government own etc rush to strike deals to secure reserves of Lithium for their use in the foreseeable future.

According to Reuters, General Motors is preparing Livent Corp $198 Million for a guaranteed six years supply of Lithium. Similarly Chinese firm Ganfeng Lithium Co. is gearing up to secure assets in Argentina which has the world's biggest pipeline of projects. It plans to purchase Lithea Inc. which has salt lake assets and expected to produce 30,000 tons of Lithium Carbonate, for $962 Million.

Lithium prices gone through the rough:

This without a doubt has led to massive spike of over 400% in Lithium price over the last year with huge Demand-Supply mismatch. Fitch Solutions has forecasted Chinese lithium carbonate 99.5 per cent to average $68,000 a tonne this year and $55,000 in 2023. Chinese lithium hydroxide monohydrate 56.5 per cent prices are likely to average $67,000/tonne in 2022 and $56,000/ tonne in 2023.

Fitch Solutions, quoting its database of global lithium projects, said only four mines with an expected capacity of approximately 75,000 tonnes were due to come online this year. “Next year, we expect at least 11 projects to begin production while demand continues to rise,” it said.

Lithium way forward - Reinvent and Recycle

There are scope for developments with batteries or manufacturing methods that could alleviate potential lithium shortages.

1. “Emerging technologies, such as direct lithium extraction or enhanced metal recovery from waste streams or low-grade ores, offer the potential for a step change in future supply volumes,” the IEA says in The Role of Critical Minerals in Clean Energy Transitions.
2. It also states that the number of used EV batteries reaching the end of their initial lifespan is expected to surge after 2030. Recycling these could cut lithium supply requirements by about a tenth by 2040, it says. The World Economic Forum makes a similar forecast in its report, A Vision for a Sustainable Battery Value Chain in 2030. “In the base case, an estimated 54% of end-of-life batteries are expected to be recycled in 2030,” it says, adding that this could cover 7% of demand for raw materials used in battery production in that year. 
3. An emerging second-hand electric car market may also alleviate some of the supply problems. China is actively trying to develop a second-hand market, Bloomberg reports, saying that such sales almost doubled between 2017 and 2020, rising to 47,000.The UK’s second-hand EV sales more than doubled in January-March 2022 compared with a year earlier, taking them to 14,586.