With America’s pint-size lithium business about to get a $1 billion loan from the U.S. Department of Energy, the nation may soon compete with China for lithium to supply the growing worldwide electric vehicles industry.
The Biden administration sees homeshoring the lithium supply chain as an essential part of its climate imperative and it looks likely to back the Canadian mining company Lithium Americas in the massive Thacker Pass project in Northwest Nevada.
The loan will follow the DOE’s $700 million conditional loan earlier this year to the American lithium company Ioneer Inc. to help finance the Rhyolite Ridge Lithium-Boron Project in Southwest Nevada.
The London-based Oilprice.com energy information website and Waco economist Ray Perryman say the situation is compelling.
Lithium is a rare earth mineral that’s an essential ingredient in solar panels, batteries for renewable energy storage and electric vehicle batteries. In the past year, determined by supply and demand, lithium carbonate has sold for $25,000 to $90,000 per metric ton. The soft white or sliver alkali element is the lightest solid element. It floats on water.
“The United States is not the only country that is seriously ramping up lithium production and acquisitions,” Oilprice.com said. “Around the world a modern-day gold rush is unfolding as nations try to snap up lithium acquisition agreements as fast as they can.”
Perryman said the pandemic “clearly illustrated the importance of resilient supply chains, particularly for essential materials and products.
“Having a lithium mine in North America can help protect against such problems,” he said. “In addition China is working to capture a major market share of electric vehicles and there’s always a possibility that they will become less willing to export lithium to the U.S. both for local market and geopolitical reasons.
“Clearly lithium mining raises environmental issues that must be addressed even as EV deployment is pushed to alleviate other climate concerns. It’s a difficult problem, but at least having a mine in the U.S. will ensure strict regulations and vigilant oversight unlike in some countries.”
Asked if lithium will eventually be supplanted by a more accessible element, Perryman said that is a possibility.
“There’s always a chance that a newer technology will come along and displace lithium-ion batteries,” he said. “Laboratory development is taking place with solid state batteries and sodium-ion chemistries, both of which are sharp departures from lithium in architecture.
“In addition a number of companies continue to make advances in vehicles fueled by hydrogen including large manufacturers and luxury brands, which could potentially alter the trajectory for EVs going forward. At present it appears that EVs powered by lithium-ion batteries will be the primary departure from traditional modes for the foreseeable future, although the pace of transition will likely be slower than many anticipate because major infrastructure and disposal issues have not been resolved.”
Perryman said the entire spectrum from mining to manufacturing to electricity production should be considered when looking at the emissions related to any vehicle.
“Given current projections approximately 40 percent of the incremental electricity will be generated by natural gas,” he said. “The energy conversion ratio when natural gas is transformed into electricity is only 45 percent. One of our studies indicated that if the goals of the Paris Climate Accord were achieved they would generate the demand for an additional eight trillion cubic feet of natural gas in the United States alone.
“At this point none of the current or emerging technologies is without challenges, which creates an opportunity for something better to come along and gain a substantial slice of the market. Moreover, despite a lot of rhetoric to the contrary, realistic projections of future global energy demand indicate a significant role for oil and gas for decades to come.”
