Lithium

In recent months, and in particular in the wake of the recently-passed congressional Inflation Reduction Act (IRA), we have seen a long overdue uptick in efforts to build out a secure North American critical minerals supply chain.

Not surprisingly, many of these efforts are focused on what ARPN has dubbed the “super-criticals” – the five battery materials, plus a sub-set of five rare earths required for permanent magnets (neodymium, praseodymium, dysprosium, terbium and samarium), which altogether comprise a group of 10 Criticals within the 50 Critical Minerals on the official U.S. Government list.

With the new sourcing requirements in the energy provisions of the Inflation Reduction Act mandating that to be eligible for the EV tax credits contained in the package, qualified cars must be assembled in North America, and adhere to “escalating levels of critical minerals to be sourced from the U.S. or a country with a free-trade agreement with the U.S,” car and battery makers are being forced to rethink their supply chains.

LG Energy Solutions’s (LGES) just-signed offtake agreement for the purchase of battery-grade lithium carbonate from U.S.-based Compass Minerals is a case in point for companies adapting to “recent regulatory changes and intensifying competition over key battery raw materials.”

The companies have entered into a six-year term agreement under which LGES would receive 40% of Compass Minerals’s anticipated annual production from its lithium brine development project located on the Great Salt Lake in Ogden, Utah.

With Compass Minerals having adopted a low-carbon profile for its operations — the company recently announced it will rely on Energy Source Minerals’s direct lithium extraction (DLE) technology to remove lithium with superior absorption and minimal environmental impact, using a solar evaporation process projected to produce significantly lower rates of greenhouse gas emissions — the partnership will tie into the overall push towards net zero carbon emissions.

As ARPN has frequently pointed out, the mineral intensity of the green energy transition dictates that the pathway to net zero carbon leads through the mining sector — which, thankfully, is ready to meet the challenge of striking a balance between modern mining practices and environmental protections.

In this context, the LGES and Compass Minerals partnership is another example of the mining sector harnessing advances in materials science and technology to do its part to sustainably green the future while securing critical mineral supply chains underpinning 21^st Century technology.

For more examples of initiatives by mining companies to significantly reduce carbon emissions or even “close the loop,” take a look here, here and here.

In case anyone needed a visual reminder of how the EV revolution is adding fuel to the fire of the overall critical minerals challenge we’re facing, Visual Capitalist has put together a handy graphic depicting the material inputs for EV batteries.

Here’s a snippet – for the full graphic and context, click here.

The infographic uses data from the European Federation for Transport and Environment, which bases the mineral content on the ‘average 2020 battery’ — the weighted average of battery chemistries on the market in 2020.  Friends of ARPN will recognize familiar elements:  graphite, copper, manganese, nickel, aluminum, cobalt and, of course, lithium.  (All of which – with the exception of copper – are U.S.-Government designated “Criticals.”  To revisit our case for copper as a “Critical,” see HERE and HERE.)

As Visual Capitalist notes,

“The EV battery market is still in its early hours, with plenty of growth on the horizon. Battery chemistries are constantly evolving, and as automakers come up with new models with different characteristics, it’ll be interesting to see which new cathodes come around the block.”

Of course, as ARPN has consistently argued, the issue goes well beyond the “battery criticals,” and we’re thankful to see that as mainstream awareness is rising, so is the realization that our critical minerals challenge extends across vast swatches of the periodic table, and encompasses both sourcing and processing of many metals and minerals.

Some steps have been taken, but much more remains to be done. Against the backdrop of ever-increasing stakes, the time for stakeholders to act decisively to implement an all-of-the-above strategy on critical mineral security is now.

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