Panelists made the observation about lithium supply and demand at NY SME’s 8th Current Trends in Mining Finance Conference on Tuesday May 9.
Lithium-ion batteries are currently collected via stewardship programs subsidized by battery companies, as well as for-profit collectors in the e-waste world, David Fauvre, co-founder and chief strategy officer at Blue Whale Materials, said during a roundtable discussion called “Bringing the Next Generation of Critical Minerals and Battery Metals Facilities Online.”
Once collected, the lithium-ion battery waste can be turned into black mass — made of lithium, nickel and cobalt — and reenter the battery raw material supply chain.
“I get a lot of questions from potential consumers, ‘What happens with the batteries? …How much degradation is there?’” Erin Sanders, senior vice president of corporate communications at Piedmont Lithium, said during the roundtable. “They don’t realize they can be recycled. …They don’t understand [there is no degradation of recycled metals].”
“There is a huge opportunity to expand that collection network given the number of batteries coming offline, not just from our phones and our daily use, but certainly from some of the larger applications,” Fauvre said.
Batteries from EVs will come offline primarily in two streams, he said: 1) batteries that original equipment manufacturers (OEMs) own and control through warranties and recalls, and 2) “free for all” batteries that consumers own in their own cars, which will potentially end up in dealerships or scrapyards.
“We are looking to maximize the value of those materials,” Fauvre said. “There are networks being designed now to facilitate that collection infrastructure in the automotive world. There aren’t a lot of those batteries coming offline yet, but everyone sees the real flood of that material coming in the next three to four years, so there’s a lot of work to be done to develop that.”
Despite automakers’ robust targets for sustainability and recyclability, there is a growing trend of the batteries becoming “almost structural elements” in EVs, Fauvre noted. The batteries used to be easy to remove, but for safety reasons are becoming very tightly packed and difficult to dismantle, he said. Yet the recyclability of the battery packs is not even in the top five features that manufacturers are currently considering when designing EVs, he added.
Demand for lithium hydroxide expected to soar
Sanders reported that demand for lithium hydroxide in the US is expected to soar to 715,000 tonnes per year by 2030. With current capacity at 17,000 tonnes per year, plus planned capacity of only 180,000 tonnes per year, that will lead to a shortfall of 518,000 tonnes, her data showed.
In other words, US battery plants are expected to require more than 40 times current US lithium hydroxide capacity, according to the presentation.
“These metals — if they are extracted and refined in the right way — can be put right back into batteries,” Fauvre said. “These OEMs and battery manufacturers especially are looking at these demand curves and trying to figure out ‘How do we control that feedstock material for those critical minerals as early in the supply chain as possible?”
“The looming lithium supply deficit is going to require significant investments in the development of upstream lithium resources for the production of batteries,” Sanders said. “Battery recycling will also be important on many levels, but even when that recycling system is more fully developed in the coming years, we believe there will still be significant need for the mining of lithium materials to support the US EV and battery manufacturing supply chains.”
Piedmont Lithium has signed offtake agreements with Tesla and LG Chem to supply them with high-purity spodumene concentrate (SC6%), the hard-rock mineral that contains lithium and a key input for lithium-ion batteries for EVs.
“For example, LG Chem, when we sell the tonnage to them, they will ship it to China to be tolled,” Sanders said. “We’ve got to get hydroxide production in the US up and running because otherwise companies like that have no real options.”
Piedmont Lithium operates four spodumene mining projects in Quebec, Ghana, Tennessee and North Carolina.
The Quebec project is a brownfield operation jointly owned by Piedmont and Sayona Mining, called North American Lithium.
“It has been recommissioned as of March and we’re producing spodumene concentrate there,” Sanders said. “We expect the first shipment to be ready in July.”
Blue Whale Materials plans to build at least five lithium-ion battery recycling plants in the US and Europe using $80 million in funding from private equity firm Ara Partners. The first plant in the US will be operational in the second quarter of 2024 with processing capacity of more than 14,000 tonnes per year of feedstock battery material, according to Fauvre’s presentation.
Fastmarkets is proposing to launch black mass payables indicators in the South Korean market.
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