Lithium Mining in North America
Lithium is the lightest metal known and its capacity to retain energy makes it appealing for use in batteries. To compete with China’s dominance of the electric vehicle battery chain, North America requires lithium mines.
As bankruptcies and environmental concerns stymie new mine openings, there are some clear candidates but no clear winners. Despite having more than 3% of the world’s reserves, the United States has only one lithium mine producing 5,000 tons per year — less than 2% of the world’s annual supply.
Several new lithium mines in Nevada have been impeded by environmental lawsuits for years. Other states in the United States – including California, Oregon, Tennessee, Arkansas, North Dakota, and North Carolina – have lithium deposits but no clear direction to production.
Even Maine has a deposit which is said to be one of the richest grade ores in the world. A lithium mine owned by the Australian company Sayona Mining is set to open in Quebec, Canada, early next year. The mine has had various owners, and some of them have filed for bankruptcy. Hence, people are skeptical of its production potential especially since mining and processing materials for electric vehicles is a difficult process. Lithium mining is no exception to this rule.
Some businesses lack the expertise required to blast ore, haul it out of the ground, and separate the lithium from the encircling rock thereby resulting in delays and cost overruns. Extraction of lithium can be extremely difficult because lithium deposits are embedded in other metals and minerals.
More refineries in North America are needed to process raw lithium into a concentrated type of metal that goes into batteries. China currently dominates the processing of critical metals required by EVs and renewable technologies. Lithium processing also necessitates expertise, which is scarce in the United States and among the country’s allies.
The Biden climate/tax bill, known as the Inflation Reduction Act, was signed into law in August and included incentives and subsidies for car buyers and automakers. To be eligible for the subsidies, which total more than $10,000 per electric vehicle, battery manufacturers must use raw materials from North America or a country with which the US has a trade agreement.
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This creates a strange dilemma. Despite the fact that there are dozens of potential lithium mines in the United States and Canada, most are in various stages of growth and many are years away from manufacturing. This can largely be attributed to environmental lawsuits that are delaying development due to various points for litigation in US regulatory law. Many of these mines have to raise billions of dollars in investment with no guarantee that they will produce enough lithium to meet North America’s needs.
Since mid-2021, the price of lithium has increased fivefold, bringing the cost of electric vehicles to around $66,000, just a few thousand dollars less than the median household income and $20,000 more than the average for all new car sales. And prices continue to rise.
High EV prices are caused by a scarcity of batteries, raw materials like lithium, and components such as semiconductors. When there is strong demand from wealthy buyers who want to own a Tesla or be the first on their street to flaunt a luxurious electric vehicle, automakers have little incentive to build and sell cheaper EV models. Furthermore, many low- and middle-income individuals do not have garages or driveways and there aren’t enough public charging stations for charging their EVs.
The bottlenecks will take years to remove because automakers and battery and chip suppliers must obtain permits, build new factories, and equip them. Commodity suppliers must open new mines and construct refineries, which require years of permitting procedures. Despite federal government incentives, charging companies are struggling to install stations fast enough to meet the demand.
At Silver Peak (Nevada), Albemarle works as the only active lithium mine in the United States. Lithium is extracted from brine, a liquid found beneath the ground. Some Tesla batteries contain lithium from Nevada but the site’s total annual output is enough for about 80,000 vehicles—roughly one-fifth of the EVs purchased in the United States in the first six months of this year (370,000 EVs).
Albemarle also manufactures lithium in Chile and Australia. The company is working to reopen a lithium mine in Kings Mountain (North Carolina) and intends to build a refinery in the Southeast. However, if other states follow California’s lead and ban internal combustion engines, these projects will be insufficient to meet the demand.
At the Quebec mine, rock is blasted loose and crushed before being processed in stages to remove waste. A short distance from the mine, inside a large building with corrugated blue metal walls, a laser scanner separates light-colored lithium ore using compressed air jets. The ore is then refined in vats of water and detergent where lithium floats to the surface and is skimmed.
The finished product resembles fine white sand, but it contains only about 6% lithium. The remainder consists of aluminum, silicon, and other substances. The material is then sent to refineries, the majority of which are in China, to be further purified. The separation procedure employs only recycled water and electricity from Quebec’s hydropower plants.
Raw materials such as lithium, cobalt, and nickel must be produced and processed in order to manufacture electric vehicles and renewable technologies. Currently, China – where mining and manufacturing regulations are less stringent than in the United States – dominates the battery supply chain especially in the processing of these raw materials.
Environmentalists in the United States do not consider mining and processing of these materials to be “green”. Canada is a little more lenient than the US and, as a result, the lithium mine in Quebec may be able to succeed especially if lithium prices remain high.
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