August 21, 2020 – Ryan Raitano
Future of Li-ion Batteries:
As the world transitions towards clean energy, through renewable energy sources paired with energy storage, and electrified vehicles, one thing remains clear – keeping up with the demand for materials that make up lithium-ion (Li-ion) batteries is the key to a successful and sustainable transition to a greener earth. Yet, threats to battery material’s global supply chains, material sustainability, and other supply problems are casting doubt on the availability of supply needed for the vast amount of growth happening in the battery industry. It’s critical to the future of Li-ion batteries to meet the growing demand for battery materials in sustainable and socially responsible ways that broaden their supply chains and add new sources of material to supplement growth.
What makes up a Li-ion battery:
With 79 percent of the cost of producing Li-ion batteries being the cost of the raw materials, it’s evident how important the individual materials and their supply chains are. These batteries are made up of many materials with the exact composition depending on the specific type of cathode, anode, and electrolyte used. The cathode, which is the positive electrode, is typically a metal oxide that comes in a variety of different chemistries depending on the desired application and performance requirements of the battery. Common examples of chemistry types under the Li-ion family include lithium cobalt oxide (LCO), lithium manganese oxide (LMO), lithium iron phosphate (LFP), and lithium nickel manganese cobalt oxide (NMC). Due to the contents of the cathode, it is generally the most valuable aspect of a Li-ion battery. On the other hand, the anode (negative electrode) is most commonly made up of graphite, thanks to graphite’s chemical stability, performance and low cost.
Lastly, the electrolyte is the component that enables the movement of Li-ions between the cathode and anode, and is made up of lithium salts, solvents, and additives. This article will primarily focus on an examination of the supply chains of the higher value critical battery metals utilized in cathode and anode production.
Supply chains for Li-ion batteries:
The supply chain from start to finish of a Li-ion battery can be generally divided into a 5-step process. The chain naturally begins with mining, after which all mined materials are sent through a refining process to prepare the materials for use in battery production. In phase 3, cathode and anode production begins, thus forming the key component that make up a battery. Once the cathodes and anodes have been formed, Li-ion battery cells are manufactured as either prismatic, pouch or cylindrical cells, constituting the 4th phase of the manufacturing supply chain. At this point, new Li-ion batteries are created in battery packs for their final applications, such as EV’s, energy storage, or even your mobile phone. To complete this process, the batteries are placed into their packs or devices.
It’s important to note that currently, this supply chain is quite a linear process, with no afterthought in regards to batteries that have reached the end of their life. The overall battery supply chain may seem simple with its 5 steps, but there is a complex pathway that each of the individuals materials that make up a battery must take prior to entering the manufacturing process. This article will explore in greater depth what that looks like for several of the most critical materials commonly found in Li-ion batteries.
Lithium is certainly one of the most important battery metals in the supply chain. Often referred to as ‘white petroleum’, lithium remains to be the key ingredient in the battery that makes Li-ion batteries perform so well. In 2018, it was reported that and by 2028, the demand for lithium in Li-ion battery applications is expected to. So where is all this lithium coming from, where does it go, and how is it used?
More than 80% of global lithium production is currently coming from Australia, Chile, and Argentina. These geographical areas are rich in lithium brine or rock deposits and contribute a large amount of economic activity to their regions. Since the majority of the globe’s lithium deposits exist in these areas, the rest of the world is reliant on importing lithium from them. Smaller sources of lithium do exist in other areas, such as Zimbabwe, Portugal, China, Brazil, Canada, and the United States. Like most other mining processes, mining lithium from brine or rock is not an environmentally friendly process. In fact, lithium mines have been known to wreak havoc on local ecosystems, and the process of mining lithium from brine is extremely water intensive.
However, new lithium mining processes are being developed to allow for a much more sustainable process. A pilot plant in Southern California has demonstrated the ability to extract lithium from run-off geothermal brine. Resource developer Controlled Thermal Resources (CTR) expects to be able to extract up to 34,700 tonnes of lithium carbonate equivalent per year by 2025 out of their California operation. This powerful solution has the potential to supply large amounts of lithium in areas that are not known for their lithium exports simply by using a by-product of renewable geothermal energy. From an environmental and economic perspective, it’s a win-win. With the demand for lithium continually increasing, emerging clean technology will bolster the supply in a sustainable fashion.
Currently, lithium provides the best combination of energy density and price, so it seems lithium based batteries will be the gold standard of batteries for a while. Lithium is clearly an important element in the battery supply chain, so any shortfalls in the supply while trying to match the rising demand could be detrimental to the battery industry. The demand for lithium has been growing every year, and with increased production of Li-ion batteries the forecasted demand for lithium is predicted to grow decades into the future. In fact, lithium demand is set to almost triple by 2025 to more than 1.5 million tonnes. This is great news for the industry, until you realize that investment into the production of lithium has slowed since 2019. This means there are rising concerns over the supply of this material, at a crucial point in time where Li-ion batteries are electrifying all aspects of life in the fight against climate change. Furthermore, the current methods of mining lithium carbonate are unsustainable, and not enough resources have been dedicated to guarantee a sustainable supply of lithium by and onward.
Fortunately, there is a local solution, which can be applied anywhere batteries are being discarded. As mentioned before, the battery supply chain is quite linear and most batteries end up as waste at the end of their lives or if being recycled, lithium has historically not been targeted as a material to be recovered from these batteries. If given the right technology, these materials, including the lithium, can be extracted from the waste and injected back into the supply chain.
The Canadian firm Li-Cycle has adopted this strategy to recover materials from all forms of Li-ion battery waste. In fact, Li-Cycle is able to sustainably recover battery grade lithium from end of life batteries. What makes the recovered material even more compelling is the fact that Li-Cycle’s technology is estimated to provide 8.9 tonnes of CO2 reductions per tonne of lithium carbonate compared to raw material extraction and refining. Therefore, the extracted lithium from battery waste actually carries a much lower environmental impact than lithium extracted from primary resources.
While there are a variety of different cathode chemistries that are included in the larger family of Li-ion batteries, there are two types that are used almost exclusively within the EV industry: nickel-manganese-cobalt (NMC) and nickel-cobalt-aluminum (NCA). Something both these batteries have in common is their strong dependence on nickel to function, a dependence that is expected to continue to grow into the future as battery manufacturers progressively transition away from cobalt in favour of nickel in an ongoing effort to drive down raw materials costs in manufacturing. This section will walk through the current supply chain for the production of battery-grade nickel (which is produced as a sulphate) and examine how projected supply deficits may be met in part by widespread recycling of Li-ion batteries.
When Li-ion cathode manufacturers look to use nickel in their process, their demand is for the product to be in the form of nickel sulphate. There are two distinct streams through which nickel sulphate is produced – either via nickel laterite ores or via nickel sulphide ores. Laterite ores comprise around 62.4% of global production while sulphide ores make up the remainder. Laterite is most commonly found in Indonesia, Cuba, and the Philippines while sulphides are predominantly sourced from North America, Australia, China, Russia and Greenland. Both ore feeds must undergo several stages of high-temperature or hydrometallurgical processing and additional refining treatments before reaching the sulphate form in which they enter the cathode manufacturing process, and these intermediate steps (along with the original process of nickel extraction from the earth) carry a heavy environmental burden by way of greenhouse gas emissions.
Furthermore, industry experts predict a sizeable supply deficit of nickel in the coming decade, largely driven by the projected market growth for NMC Li-ion batteries as electric vehicles are continuing to be adopted around the world at a prolific rate that is anticipated to continue well into the future. These market forces will place considerable pressure on the nickel supply chain and a multitude of clean tech applications will depend on a rapid scale up in global nickel sulphate production capacity in order to continue to maintain currently projected growth rates. Several companies, such as Tesla, are already aggressively looking to lock up nickel supply for the next few years to insulate themselves against projected supply deficits.
Li-Cycle firmly believes that an essential part of the long-term solution to this challenge involves commercialization of advanced Li-ion battery resource recovery technology that will enable us to recapture the nickel that is already contained within the hundreds of thousands of tonnes of spent Li-ion batteries reaching end of life today and into the future. Commercial scale recycling offers the potential to develop a truly sustainable supply chain of this critical material moving into the future, closing the loop by offering battery grade nickel sulphate that carries a reduced environmental footprint compared to nickel produced via primary sources. In doing so, recycling will play an integral role in meeting the growing demand for nickel over the next decade (and beyond) in a more sustainable. Lastly, the nickel sulphate from Li-Cycle’s recovery process is produced with 8 tonnes less CO2 per tonne of material compared to primary nickel sources.
Despite not receiving as much attention as some of the other materials that comprise Li-ion batteries, graphite is often the largest individual component of Li-ion batteries by weight and plays a critical role as the primary material used in the battery anodes deployed across all types of Li-ion batteries. While there is significant variance in the materials that make up the cathode of a Li-ion battery (ranging from high cobalt lithium-cobalt-oxide batteries to cobalt free lithium-iron-phosphate or lithium-manganese-oxide) the anode is almost exclusively manufactured using graphite in current generation Li-ion batteries, and thus the battery-grade graphite supply chain remains a priority focus for industry stakeholders.
Unfortunately, graphite production is mired in environmental concerns and carries a significant greenhouse gas emission footprint as a result of the processes that output the two types of graphite used in anode production for Li-ion batteries, natural graphite and synthetic graphite. Currently, China is the largest producer of natural graphite in the world, producing over 6 times more than the second leading producer (Brazil). China makes up around 70% of the world’s mined graphite production as of 2018 and thus plays an integral role in supporting the global supply chain of anodes for Li-ion batteries. The mines producing this graphite, however, have been documented to have detrimental effects on the health of neighboring villages, where residents report damaged crops, polluted drinking water, and air so thick with soot it sparkles at night. These findings have put pressure on the Li-ion supply chain to source more ethical and environmentally sustainable streams of graphite, but for the near-term future China continues to dominate the natural graphite market.
As an alternative, synthetic graphite can offer higher purity and lower electrical resistance, making it the preferred choice purely from a performance standpoint. Due to cost considerations most Li-ion anodes are made with a blend of the two types of graphite but there is an increasing trend toward the use of synthetic graphite and industry experts predict continual growth of the synthetic graphite market over the next 4 years. But synthetic graphite, just like its natural counterpart, brings its own set of environmental baggage, this time in the form of the GHG emissions associated with its production as a by-product of coal mining or oil refining. The reality is that regardless of the origin or type of graphite, there is a relatively significant environmental footprint associated with preparing it for use within the Li-ion manufacturing process.
At commercial scale, Li-Cycle is capable of stepping in to provide a more sustainable supply of graphite via the Li-ion batteries processed through its technology. By recovering the graphite already contained within the anodes of batteries processed at Li-Cycle facilities and sending it as a concentrate for industrial uses or refiners capable of turning it into anode material for new batteries, recycling offers a long-term solution to diminish the carbon footprint of the graphite that is needed to create the Li-ion batteries used in a variety of green technologies including electrified transportation and gird scale energy storage projects to support renewable energy generation.
Manganese is an important material that has been used in various industries for centuries. Interestingly, the use of manganese dates all the way back to the Stone Age where manganese dioxide was used as a colouring agent for cave paintings. Nowadays, manganese is most commonly found in steel, glass, fertilizer, supplements, and of course batteries.
Manganese is used in Li-ion batteries that have a cathode chemistry of lithium-manganese-oxide (LMO) or a cathode chemistry of nickel-manganese-cobalt (NMC). LMO batteries provide a durable battery that can remain stable at high temperatures, which has for some time made them a strong choice for power tools, medical devices and electric vehicle applications. The precise cathode buildup of NMC batteries varies significantly depending on the relative quantities of nickel, manganese, or cobalt within the battery. Generally speaking NMC batteries are a great choice for electric vehicles due to their high energy density and with the exception of Tesla, most modern EV’s are powered by NMC batteries.
An estimated 70% of global manganese reserves can be found in South Africa (NS Energy, 2020) while the rest of the world’s manganese sources can be found in Australia, China, India, Ukraine, Brazil and Gabon. While South Africa holds the title as the world’s largest singular producer of manganese (producing just over a third of the Manganese in use today), the market for manganese refining revolves almost exclusively around China . Even though China only accounts for 6% of global manganese production, China accounted for 93% of chemical refining of manganese in 2019 (Wirtz, 2020). Because of this, there are hardly any local sources for refined manganese at a battery grade purity. Therefore, any potential problems in the supply chain coming from China can lead to shortages of the battery grade manganese, particularly for manufacturers of batteries in North America (NA produced 0 tonnes of manganese in 2019) or Europe.
In response to this, there needs to be a variety of local sources of battery grade manganese established in order to secure a stronger supply chain with multiple links creating opportunities for the material outside of China. Investment into chemical refining of battery grade manganese will be a key step towards broadening the supply chain network. The demand for premium manganese battery material creates for a higher economic margin than manganese for other materials. So, there is a strong incentive to build up the supply of this grade of manganese, and doing it throughout the globe on a regionalized scale is the strongest option for the supply chain network.
Cobalt is a critical component in Li-ion battery cathodes for high energy and power applications. It is used most heavily in electric vehicles as part of the NMC and NCA batteries that act as the power source for these vehicles, and is also found in the batteries contained in the handheld devices used by billions of people around the world.
The Democratic Republic of the Congo (DRC) accounts for almost two-thirds of global cobalt supply. However, some of the artisanal stream of cobalt production in the DRC has unfortunately been documented to involve child labour. Additionally, the vast majority of cobalt is mined as a by-product of copper and nickel, and hence cobalt supply has historically been relatively inelastic. Major players in the cobalt refining industry are based out of China, Finland, Norway, Belgium, Zambia, Japan, and Canada. This demonstrates the depth of cobalt’s global supply chain network, even if the majority of its primary production happens in the DRC.
Recently, EV automakers and battery manufacturers have been making moves to secure responsibly sourced cobalt, especially in the face of the negative social consequences of artisanal mining. For instance, Volvo is using blockchain technology to track and ensure their materials are sourced ethically and responsibly. Likewise, Tesla has inked a contract with mining giant Glencore to secure a reliable source of cobalt from the DRC for their new manufacturing plant in Berlin. In terms of the social and environmental consequences of mining in the DRC, Tesla claims they, “have made a significant effort to establish processes to remove these risks from our supply chain” and their deal with Glencore is reflective of these processes.
However, due to the increasing demand for battery materials, the negative consequences of irresponsible cobalt mining in the DRC will continue to rise until new reliable sources of the material are found. Could the recycling of Li-ion batteries mitigate the current and near-term cobalt supply challenges? In short, yes – by 2025, Li-ion battery recycling could meet 20% of the forecasted global demand for cobalt. In turn, Li-ion battery recycling will reduce the social and environmental impacts of artisanal mining in the DRC. Moreover, recycling can mitigate drastic price swings in cobalt and other critical materials, as well as the reliance on mining and refining into the future.
Li-Cycle is able to transform the negative externalities of cobalt into a more environmentally friendly material by providing an outstanding 40.735 tonnes of CO2 reductions per tonne of cobalt produced compared to virgin mining and refining of the material. Furthermore, there are zero negative social consequences when extracting cobalt from end of life battery waste.
It’s evident that the supply of battery materials may struggle to keep pace during this unprecedented phase of electrification. Lithium, nickel, graphite, manganese, and cobalt are vital to the Li-ion battery production, and currently they are being supplied via unsustainable and vulnerable supply chains. While the role of secondary sources of these materials may not completely replace the need for primary production, it’s worth noting that solutions such as resource recovery from waste can help strengthen supply chains in a sustainable manner. The world is quickly transitioning to electrification with the result of a growing dependence on Li-ion battery technology, and Li-Cycle strongly believes that by building out a sufficient global network of Li-ion recycling capacity we can help ensure there are enough sustainably-sourced materials to keep the transition flowing.