Lithium Mining: Sustainability Concerns For Green Investors

Lithium-ion batteries have emerged as one of the most important electronic components in recent times. Be it cell phones, laptop computers or electric vehicles, these batteries can be applied everywhere. In fact, its market has grown so rapidly that, it has unseated Lead acid battery as the most produced and used battery with the latter holding the coveted position for more than a century.

The commercial availability of the lithium-ion battery during the 1990 era was responsible for the cellular phone revolution in the world followed by the smartphone and tablet industry taking off towards the late 2000s. Little change has happened with its technology ever since its inception, yet the battery is now providing the foundation for the new technological developments taking place in energy storage devices, consumer electronics, and is also fueling the shift of global emphasis towards electrically powered vehicles (EVs).

The element has been at the helm of some of the major technological advancements that have taken place over the previous thirty-year period in the world. Lithium, which is one of the lightest known metals, and also one of the least-dense solid elements known for great electro-chemical potent, ironically, has a very low melting point. These above factors collectively make lithium highly suitable for many metallurgical as well as energy storage applications. The metal element also offers excellent energy-to-weight performance and strength-to-weight properties.

In the instant case of Lithium-ion batteries, the element’s very high electro-chemical potential (its willingness to transfer electrons) makes it a much-favored material for the manufacture of batteries. With reliance on this unique electro-chemical property of the element, approximately half the world’s production of this element has now been shifted towards the production of lithium-ion batteries.

Lithium Mining

Lithium metal is extracted from lithium mineralization found in igneous rocks composed of large crystals of this mineralized element called spodumene (lithium aluminum inosilicate), or in water bodies having a high concentration of lithium carbonate (lithium brine). Historically, the global supply of this element was principally processed from hard-rock mineralized ore formations. However, during the early 1980s, large-scale lithium brine extraction methods were employed in South America for refining this metal. At present, the world’s production of Lithium metal is split evenly between both the hard rock spodumene refining method and lithium carbonate brine concentration method. Processing spodumene mineral ore deposits follows the conventional route of hard-rock mining and processing practices similar to that of other ores. The Ore is mined via drilling and blasting methods, followed by excavation and transportation to a centralized processing facility. The mineral ore is then put through multiple stages of crushing so as to bring down its particle size to below a certain size. This stage is followed by flotation and magnetic separation where the wet mineral concentrate is screened, filtered and processed as a six per cent Lithium Oxide (Li2 O) concentrate before being transported for further metal extraction stages.

In the second method, Lithium brine (Lithium Carbonate solution) is concentrated in large and shallow solar evaporation ponds where the mineral is collected in its salt form. The initial capital outlay for the production of lithium from brines is very high but subsequent operating costs are relatively low. While the first method to mine the mineral is less expensive, extracting the mineral salt from brine can take anywhere between 12 to 18 months to reach desired concentration. Project scale-up of the brine method usually takes between eight to ten years whereas it takes two to three years for spodumene processing to Lithium Oxide method.

Both the above methods of extraction of Lithium however have a very heavy environment cost. the metal, because of its alkaline characteristics, is a highly corrosive element and it also violently reacts with water. Breathing of the metal’s elemental dust particles or its alkaline mineralized compounds irritates the respiratory tracts of humans. Prolonged exposure to this metal and its compounds can cause fluid to build-up in the lungs, leading to pulmonary edema. Hence the dust emanating from the mining of spodumene will not only put the mining workers at risk but when mixed with air will travel far and put residents of nearby localities at risk as well. In the brine concentration method, large land masses are required to build shallow solar ponds where the brine is evaporated. This method also requires huge freshwater reserves to process this salt, leave alone the health of the labors who work on these ponds. The metal in its elemental form is also a hazard at it exhibits alkaline properties whereby it reacts with water to produce lithium hydroxide in a highly reactive and explosive process.

Given the above environmental costs involved, there is a serious debate about the costs and benefits of using Li-ion batteries and whether they are bringing us more gain with less costs to bear. The said batteries are fueling the next stage of the human technological evolution and helping us replace internal combustion engines and limit our usage of coal and crude oil. The benefits are to an extent counterbalanced by the mining and processing costs that this metal entails.

Reserves and production

The total lithium mineral reserves in the world at the end of 2018 was estimated at 62 million tons. The Identified lithium mineral resources in the United States of America, from continental brines, geothermal brines, hectorite, oilfield brines, and pegmatites are estimated to be at 6.8 million tons. The identified resources in Argentina are estimated at 14.8 million tons, in Bolivia they are estimated at  9 million tons, in Chile they are estimated at 8.5 million tons, in Australia they are estimated at 7.7 million tons, in China they are estimated as 4.5 million tons, in Canada they are estimated at 2 million tons, in Mexico they are estimated at 1.7 million tons, in the Czech republic they are estimated at 1.3 million tons, In Congo (Kinshasa), in Russia, and Serbia they are estimated at 1 million tons each, in Zimbabwe they are estimated at 540,000 tons, in Mali and Spain they are estimated at 400,000 tons each, in  Brazil and Germany they are estimated at 180,000 tons each, in Peru and Portugal the are estimated at 130,000 tons each, in  Austria they are estimated at 75,000 tons, in Finland and Kazakhstan they are estimated at 40,000 tons each and in Namibia they are estimated at  9,000 tons.

The top three miners of Lithium at the end of 2018 were Australia, Chile and China, with China being the largest consumer of this element.

Outlook

The pollution hazards emanated by Lithium Ion batteries are far less compared to other forms of energy storage devices. This metal has an additional advantage of being recyclable, which in future will help address any future supply constraints of this material.

Every development activity in the world comes at a cost; there are other power storage raw materials as well whose production and usage have a far worse environmental impact than Lithium. So whereas it is important to pay attention to the environmental impact, because there will always be one, but a binary analysis of costs and benefits of lithium would be unfair. A relative analysis with other alternative resources would give a better picture about their relative environmental impacts and the suitability of Li-Ion batteries for future technological developments.

Lithium as an Investment

There has been a renewed interest among commodity investors and speculators on this metal ever since the advent of the Li-ion battery, and substantial funds have been pouring into this commodity.

This commodity is not a scare commodity, and major production and refining capacities are coming up which will be online within the next few years. Additionally, industrial recycling facilities will also come up subsequently which would go on to further address the supply side dynamics of this commodity.

Overall this could be a good investment vehicle in the long term, with widespread emerging demand, especially from the electrical vehicle development perspective, which is set to revolutionize the transportation sector around the world.