In the News

July 11, 2022

Can closed loop battery recycling and geothermal lithium help solve the supply crunch?

Li-Cycle employee wearing safety gear sorting assorted batteries.

June 28, 2022

Original article published in GreenBiz

Analysts warn that a lithium supply chain crunch could come as soon as 2023 — and put a potential damper on U.S. vehicle electrification goals. 

Five- to tenfold growth is expected in the global lithium battery market over the next decade as people shift to electric vehicles (EVs), but already lithium supplies are tight.

“Big companies probably feel like there’s a lot of lithium in the world right now, and I’m going to get access to it,” Venkat Srinivasan, director of the Argonne Collaborative Center for Energy Storage Science and deputy director of the Joint Center for Energy Storage Research, told GreenBiz. “But for everybody else, if you don’t have that long-term contract, what do you do?” 

Companies that use lithium outside of the EV market are especially feeling the pain, he told GreenBiz. Some can’t get anyone to answer their calls.

President Joe Biden invoked the Defense Production Act in March to encourage domestic production of minerals for lithium batteries. But with China, Australia and Chile producing most of the world’s lithium, and China manufacturing roughly 70 percent of the world’s EV batteries, the U.S. has a lot of catching up to do.

Nevertheless, Srinivasan is optimistic that the U.S. will solve its supply chain crunch. A lot of people are “throwing ideas at the wall,” he said, and that means something has to stick. Plus, he’s excited that many companies finally have market funding in the $100 million range. “People like me who are feeding the R&D pipeline have companies that are now looking at these solutions very carefully because they have the funding to scale,” he said.

Here’s what looks promising in the near-to-medium term:

A closed loop lithium-ion battery economy 

A handful of companies have cracked the challenges of lithium battery recycling and are commercializing a promising new technology for recovering lithium, cobalt and nickel from spent batteries. Investors are pouring in hundreds of millions to the industry, while the Biden administration earmarked $3.16 billion toward it.

A lithium battery recycling industry could provide a new source of lithium within the next few years, and without the environmental and community impacts from mining new materials.

Ascend Elements of Westborough, Massachusetts, is a pioneer of this technology. It shreds batteries, extracts the impurities and leaves behind valuable lithium, cobalt and nickel in a “black mass.” It then converts the black mass into battery cathodes in a closed loop system that produces minimal waste. The technology is a vast improvement over smelting or burning batteries, a simple but inefficient process that produces waste and toxic air emissions. 

fascinating interview with Ascend Elements CEO Mike O’Kronley and Disruptive Investing explains the process and its potential.

Ascend Elements prefers to call the process “upcycling,” because it converts recovered materials into a new, fully recycled battery cathode that performs as well as or better than cathodes built from newly mined minerals. The company has attracted $90 million from investors and is building a manufacturing facility in Covington, Georgia, that will open later this year, with a capacity for processing 30,000 metric tons of discarded lithium-ion batteries and scrap per year.  

Toronto-based Li-Cycle is similarly deploying a closed loop approach and is constructing facilities in Arizona, Alabama and New York. It expects to have a total of 65,000 metric tons of lithium-ion battery processing capacity annually across its “Spokes” in North America and Europe, and recently raised $200 million from metals producer and commodity trader Glencore.

While there are not yet enough spent EV batteries to scale up the nascent recycling (or upcycling) industry, experts anticipate that beginning in 2025, 398,000 tons of batteries will begin to age out of EV applications in the U.S. in the near term, Srinivasan said that scrap from battery manufacturing is a potential source of lithium.  

Minerals recovery can help but won’t solve the lithium supply crunch, experts said. And one longer-range challenge, warned Srinivasan, is the move to create EV batteries without cobalt and nickel because of those minerals’ supply chain issues. Recovery of cobalt and nickel are what make lithium battery upcycling cost-competitive, and without those minerals, upcycling may be less attractive, he said.

Mining new geothermal sources of lithium

Mining new sources of lithium must be part of the solution, and geothermal sources offer a potentially more sustainable supply than traditional methods of extraction from open pits or salt flats. Efforts to extract lithium from geothermal sources underlying the vast Salton Sea in California’s Imperial Valley appear particularly promising and could become operational within a few years.

Geothermal plants operate by pumping from deep underground a complex saline solution that absorbs the earth’s heat and is enriched with lithium and other minerals. Geothermal plants convert that heat into electricity.

Several companies in the Imperial Valley operating 11 geothermal energy plants are developing technologies to extract and process lithium from the geothermal brine to sell into the EV battery market. 

“All three companies are in different stages of nearing the finish line, but it’s really happening,” said Michael McKibben, research professor at University of California, Riverside, co-leading a $1.2 million Department of Energy research grant to assess the long-term sustainability of lithium sources beneath the Salton Sea.

McKibben said preliminary estimates show the vast lithium reserves could supply 85 percent of current world production, and last for at least 75 years. 

EnergySource Minerals of San Diego is the furthest along. It owns one plant and is scaling up for commercial operation within the next year and a half. Berkshire Hathaway Energy Co., which owns 10 of the 11 geothermal plants, is piloting lithium extraction over the next 18 months at one of its geothermal sites. It expects to reach commercial production of lithium by 2026.

“To me, the big issue is can Berkshire Hathaway do it at the remaining 10 plants,” McKibben said.

The state’s Lithium Valley Commission, chaired by environmental justice advocate Silvia Paz, envisions a full battery manufacturing and recycling supply chain in the Imperial Valley that could provide good paying jobs in one of California’s poorest regions.  

Geothermal sources are still a few years off, however, and one stumbling block is the toxic dust released by the drying Salton Sea that’s linked to asthma and other ailments in neighboring communities. “The health problem needs to be solved in parallel with developing this lithium industry because you need a healthy environment to work,” McKibben said.

Additionally, the Lithium Valley Commission is exploring a special tax for local communities or some mechanism to ensure revenues flow back to residents, he said.

“There’s a lot of hope [the Salton Sea] is going to change things,” said Srinivasan, “but it has to come on board, and it has to be cost-effective.”