Challenges in the battery raw materials supply chain: Achieving decarbonization from a mineral-extraction perspective

Understanding constraints within the raw battery material supply chain is essential for making informed decisions that will ensure the battery industry’s future success. The primary limiting factor for long-term mass production of batteries is mineral extraction constraints. These constraints are highlighted in a first fill analysis which showed significant risks if lithium-ion batteries are used to fully support vehicle electrification and intermittent energy storage. Nickel, lithium, cobalt and graphite reserves risk 100 percent depletion with significant consumption of known resources. Furthermore, more than 700 new critical mineral mines will need to be developed to meet the required production rates for decarbonization by 2050. Demand for critical minerals will outpace mine development timelines even as improvements are made to battery energy density and compositions. Governments and the private sector need to align themselves on decarbonization goals to establish cooperative agreements on the critical mineral supply chain by reducing the barriers to entry and increasing exploration efforts. Additional measures must also be taken to reduce the demand for critical minerals. Policy such as incentivizing public transportation and biking infrastructure can be exploited to drastically reduce the mineral demand placed on the mining industry. Background The growing acceptance of global warming risks and government accords has motivated the energy transition from conventional fossil fuels to green energy solutions. One technology that is expected to play a prominent role in the transition is lithium-ion batteries, which are projected to increase by 33 percent per year to 4,700 GWh in 2030 [1]. Most of this demand will come from light duty vehicle (LDV) fleet electrification and battery energy storage. The increased demand will elevate pressure on the raw battery material supply chain to maintain production. The mineral extraction sector is a potential constraint in the supply chain due to the heavy reliance on critical minerals in lithium-ion batteries. This study aims to identify which minerals are at risk, quantify the extent of the constraints and propose opportunities to debottleneck the supply chain to achieve 2050 net-zero emission (NZE) targets. Methodology Fig. 1 Bottom-up flow diagram to determine mineral demand based on 2050 projected vehicle and energy storage requirements. A bottom-up approach was taken to determine the lithium-ion battery demand and subsequent quantity of minerals required to achieve 2050 NZE targets, as shown in Fig. 1. Starting from consumer-based projections, it was assumed the LDV fleet was fully electrified and conventional energy production was from renewable sources (wind, solar) which would require two days of battery storage [2]. Battery energy density and compositions were used to calculate the equivalent number of batteries and corresponding mineral demand for a first fill analysis. The battery mineral demand was compared to known critical mineral reserves, resources, and production quantities to identify constraints. The example shown below is the optimized hybrid case with nickel-manganese-cobalt (NMC) solid-state batteries (SSB) for vehicles usage and lithium-iron-phosphate (LFP) batteries for stationary storage applications. Results Existing global mineral reserves are compared against projected 2050 critical mineral demand (Tables 1 and 2). Lithium, nickel, cobalt and graphite reserves are at risk of depletion with our current pathway to decarbonization. Considering current noneconomical mineral resources, a significant quantity will still be consumed but there is a sufficient amount of available minerals to supply the energy transition. The major concern arises when accounting for the timeline to ramp up production rates (Table 3). Assuming mining activities take an aggressive 10 years to be constructed and commissioned, only 17 years (2023 to 2050) are available to supply the necessary critical minerals to achieve 2050 NZE targets. More than 700 new mines would be required to open in the next 10 years to meet production demand for the hybrid SSB+LFP case. This is a significant step up from the differential increase of 10 active mines from 2021 to 2022 [3]. Discussion The greatest constraint to the battery raw material supply chain will come from the quantity of minerals required and the timeline to develop and meet production demand. Successful development of new mineral extraction operations will be limited based on: (1) the availability of material, equipment and manpower, (2) political will and social tensions surrounding permitting, mineral extraction and mineral trade and (3) the ability to raise sufficient capital in a constrained timeframe. The immediate solutions to alleviate the mineral extraction constraints are to minimize the metal demand and maximize the time available to achieve ramped-up production. This includes the advancement of current battery technologies (that is, energy density) and pursuing alternative compositions such as sodium-ion batteries with aluminum collectors. In addition, policy can be used to alleviate the barriers for project permitting and incentivize the investment into new sustainable mining operations. Governments and companies need to cooperate to reduce restrictions on raw material trade and develop training programs for the future generations of specialized engineers and operators. Finally, society will have to overcome the existing stigmas against the mineral extraction industry as the additional mines are required for decarbonization of the transportation and energy sectors. Opposition against the industry will further delay global advancement toward the green transition; rather, groups should collaborate to ensure sustainable practices are met while not impeding the extraction of necessary battery raw materials. Conclusions This analysis highlights the constraints in the raw battery material supply chain from a mineral extraction perspective. Future battery demand is expected to significantly impact our existing mineral reserves and resources, which are a limited commodity. Increasing production rates to achieve 2050 NZE targets will be the largest challenge. More than 700 new mines are required to provide enough minerals for the optimized SSB+LFP case with other compositions requiring even more. The production constraints are caused by the lead times on equipment, limited specialized mineral extraction experience, societal pushback toward large-scale mining operations, and the ability to obtain capital for projects. The solutions provided in this study aim to both (1) alleviate the amount of minerals consumed and (2) streamline the production ramp-up. Technological development, policy implementation, public-private collaboration and system optimization are at the forefront of available opportunities to achieve 2050 NZE targets. Selected references McKinsey & Company (2022) Battery 2030: Resilient, sustainable, and circular, McKinsey & Company Michaux S (2023) The Green Transition will not work as planned, what might we do instead? [Online] Accessed 8 Dec 20233. Centre for Disease Control (2022) Number of active mines by sector and year, 2021-2022 [Online] Accessed 11 December 2023

Challenges in the battery raw materials supply chain: Achieving decarbonization from a mineral-extraction perspective

Authored by: Landon Jackson, C. Meinke and R. Chandramohan

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