In 2021, Joe Biden’s leadership released a report on gaps in the EV supply chain. It is estimated that global demand for lithium and graphite would increase by more than 4,000% by 2040 if the world met the set climate targets. in the 2015 Paris Agreement.
These materials, along with copper, nickel, and others, are for green technologies. And there is a global struggle for its supply, a struggle that Reuters correspondent Ernest Scheyder documents in his new book, “The War Below: Lithium, Copper, and the Global. “Battle to boost our lives. “
He spoke with Marketplace’s Lily Jamali about why lithium, in particular, is so in demand and the demanding situations to bring it to market.
The following is an edited transcript of their conversation.
Ernest Scheyder: Lithium is an incredibly soft metal. And it’s also great for generating a charge, so you can understand why it would be so vital for a battery, especially in an electric vehicle and appliances. Because it is so smooth, the battery is smoothed out and the car can run much harder thanks to the strength of the battery. Therefore, it is the center of lithium-ion batteries, as the name suggests, and it has become incredibly popular. And not just in electric vehicles, but in millions of portable electronic devices around the world.
Lily Jamali: Ouais. One of the target locations for lithium mining here in the U. S. UU. es Rhyolite Ridge in Nevada. But it’s also a very debatable site, as far as lithium mining goes. Why? Explain this controversy to us.
Scheyder: This site also features a rare flower that is not discovered anywhere else on the planet. And this flower loves this lithium-rich soil. And that brings the reader to this concept of choice: which one do we value the most as this transition to green energy accelerates?Are we putting more emphasis on tactics to fight climate change?Are we valuing biodiversity more? If we didn’t do anything about climate change, would this flower disappear anyway because of climate change?These are the questions I hope other people will dig deeper into as they read the book.
Jamali: Well, based on all the reports that have been made, Ernest, which way does the pendulum seem to be swinging in terms of a possible recovery of the mining sector here in the United States?Because now there are a huge number of those projects proposed. .
Scheyder: That’s true. I mean, in order for those billions of electronic devices used around the world to arrive, we are going to have to have a verbal exchange about where, how and why we hope to obtain lithium and other essential minerals. And if the coronavirus pandemic has taught us anything, it’s that long supply chains, or dependence on other parts of the world for the basic components of our daily lives, are no longer as feasible as they used to be. The more essential minerals are produced in the United States, the shorter the chains of origin, the lower the carbon emissions from maritime transportation and the greater independence of power, or at least the pursuit of independence of power, can be achieved in the United States. Joined. Thus, for a long time, the United States was not a mining jurisdiction. In the 1970s, 1980s and 1990s, mining fell out of fashion. It’s considered a pretty dirty industry, because it is. Mining literally creates a hole in the ground and there can be a lot of waste and it can use up a lot of water. But will there have to be discussions about safe tactics to extract and produce those essential minerals to have those technologies of the future?
Jamali: Yes, you discussed the use of waste and water, which in many tactics defines mining and has generated so much opposition. And I think that’s a big component of the irony here, is that lithium is the key to electrification, which is key to getting to net zero, yet mining itself can have very significant climate impacts.
Scheyder: Yes, it can. And especially if you’re pulling from a mine that’s on the other side of the world. Right now, one of the main lithium-producing regions in the world is in northern Chile. Just think about the supply chain: You produce the lithium there, and then you lightly process it and then track it to the coast. And then you ship it across the Pacific Ocean to, let’s say, another processor in Asia, maybe China, maybe elsewhere, where it’s further refined into a usable form of lithium that can be put into a cathode, which is part of a battery. Then it’s put into a battery and maybe a battery pack, and then maybe shipped back across the Pacific Ocean, let’s say, maybe to an automaker in the United States, where it’s then put into an EV. And that’s maybe shipped to a customer in Florida. Just think about that huge, long supply chain and what that does for emissions and that also could be interrupted by any number of events, whether that’s a natural disaster or a conflict or something else. And so right now, the United States produces only trace amounts of lithium domestically. It also doesn’t produce any cathodes right now for electric vehicle batteries. And so if we want this energy transition, we have to be having a discussion about where we should be producing them. And are there places that we should be allowing lithium extraction? And what are the things that we value more?
Jamali: So what is the fate of the Rhyolite Ridge deposit, which you speak of so eloquently in your book?
Scheyder: So in the story we’re telling this tension between the two sides, and one of the things I really wanted to delve into, if you’ll pardon the pun, was the way that Washington, D. C. , sort of speaks to two voices. Array So, at one point, this rare flower was declared an endangered species. And we tell that story in the book. At the same time, the Ministry of Energy made the decision to grant a conditional loan of $700 million to the company to produce this lithium. So how can we produce lithium at a site that is home to an endangered species? This is the situation that the regulatory review procedure has recently found itself in. This is moving forward, and it is a mine that has gained, as I said, the financial loan guarantee from the Biden leadership. It was the first proposed lithium mine in the United States to be successful at this level. The authorization procedure is also almost finalized. That’s why he also got enormous help there from the Biden leadership. But there are other parties that do not speak entirely with a single voice. And therein lies the tension around this and other similar projects in the country.
Jamali: Ernest, tell me what’s going on in the lithium markets right now.
Scheyder: There is a lot of irrational exuberance heading into 2024 around electrification. And what we saw was a slight cooling. The penetration rate of electric vehicles, if you’ll pardon the pun, was going to be 80 miles per hour, and now it’s going to be maybe 55 or 60 miles per hour. And that, combined with falling lithium costs in China, driven in part by oversupply, is lately leading to widespread fear that it will cool or slow sharply. What we’ve seen when we look at the raw EV penetration numbers is that demand continues to grow, even compared to three or four years ago. Growth is rarely as fast as expected at the beginning of the year. So we’re starting to see large corporations like Albemarle, the world’s largest lithium company, make the decision to cut spending. This means there is fear about the long term for lithium in the short term. But there are so many devices that run on lithium-ion batteries, such as mobile phones, computer batteries, everything that is electrified in our home, so the demand for lithium will not only increase.
Jamali: Yeah, it’s not going anywhere. The U.S., we have to mention, is now the world’s top producer of both oil and natural gas. Hard to believe, but it’s true. Do you see the U.S. becoming a powerhouse producer of critical elements like lithium at some point?
Scheyder: I’m fascinated by the generation that can achieve this goal with other tactics. So the classic tactics of generating lithium right now are what other people think of when they think of mining, like a hole in the ground, known as hard rock mining. Or produce lithium from evaporation ponds by necessarily pumping brine from the floor: the brine is like a salty liquid and then you evaporate the lithium in a series of steps. So those are the two main tactics for generating lithium right now in the world. But there has been a rise in new emerging technologies known as direct lithium mining, in which corporations like ExxonMobil and others are investing a lot of cash in order to necessarily remove lithium from underground reserves using what could simply be described as a procedure that imitates a familiar water softener. Today, this has never worked on an advertising scale. But if achieved, it would unlock many deposits across the United States for lithium production. More interestingly, it would allow oil producers to clean lines of lithium combined with crude oil when they extract it from the surface. So this is a manipulation that has placed a huge burden on the oil industry for years. And if they can become a profit zone through lithium generation, they may believe in the lithium production prospects that could exist in the United States. But many technical issues remain to be resolved. And so hope is surely there. And what that would also do is diminish or perhaps reverse a lot of those fights about whether certain positions are too special to exploit because you’re not digging a giant hole in the ground.
Jamali: I’d like to ask you if critical elements like lithium will be the next wave in the war for energy security, since you had a front-row seat to the U. S. shale revolution. Then I noticed how temporarily those forces can change. Critical Elements: The Next Battleground?
Scheyder: You know, I definitely see that there are a lot of similarities between the shale oil revolution and this critical tissue revolution. And whoever controls the production of nickel, copper, lithium and cobalt in the 21st century will control the economy of this century in the same way that control of oil helped shape the economy of the 20th century. All those gadgets that impose our daily lives are built with essential fabrics. Most weapons used by the Pentagon and other militaries around the world are made from critical minerals. Think of so many other places, the things you touch every day, whether electronic or not, most of them are built with essential minerals and fabrics. So we are definitely starting to see that the demand for copper will continue to increase, for example: copper is an essential mineral. And some analysts say that if there wasn’t enough copper, we could see armed conflicts in the 21st century over copper, just as there were in the 20th century over oil. Admittedly, this is a bit of a bleak forecast, but it just lays bare the dire need for many of those essential minerals and fabrics around the world and why I really hope that we as Americans, as global citizens, think about where, how and why we get those basic elements, because we can’t just bury our heads in the sand and pretend that this is no longer a challenge to solve.
In our conversation, Ernest Scheyder touched on how mining lithium to help the environment can pose hazards to the environment. USA Today is out with a story on that this week, featuring an analysis by the Howard Center for Investigative Journalism at Arizona State. Reporters looked at the likely impact of 72 proposed lithium mines across nine U.S. states and found there are no federal rules governing how much water mines can consume. It also found that most proposed lithium projects here at home are actually owned by foreign companies or subsidiaries.
Every day, the Marketplace Tech team demystifies the virtual economy with stories that explore more than big tech. We are committed to covering the topics that are important to you and the world around us, delving into how the generation interacts with climate change, inequality, and misinformation.
As a not-for-profit newsroom, we depend on listeners like you to keep this public service available and available to all.
Support Marketplace Tech and your spouse in our mission.