Sourcetoday 1703 Zink Mine Rosh Pinah
Sourcetoday 1703 Zink Mine Rosh Pinah
Sourcetoday 1703 Zink Mine Rosh Pinah
Sourcetoday 1703 Zink Mine Rosh Pinah
Sourcetoday 1703 Zink Mine Rosh Pinah

Could Raw Metals Come up in Shortage Amidst Battery Boom?

Dec. 1, 2017
Researchers investigate how raw metals like cobalt and lithium are sourced for ultimate use in lithium-ion batteries. They determine which materials could lead to bottlenecking if there is a shortage during a seven-year period of growth for lithium-ion batteries.

With more grid-connected storage being used to store energy from renewable resources, a growing demand for consumer electronics, and increased adoption of electric vehicles, the lithium-ion battery market is slated to reach $93.1 billion by 2025 with a CAGR of 17.0%, according to Grand View Research. During this period, battery manufacturers will need to ramp up production. But to avoid bottlenecking, they will need to align production strategies with potential limitations and uncertainties posed by the supply chain.

A team of researchers from MIT, University of California at Berkeley, and RIT highlight materials sourcing as an important factor that can influence production speeds in the lithium-ion battery industry. They investigate five metals that are processed and refined for use in Li-ion battery cathodes. These are lithium, cobalt, aluminum, manganese, and nickel. They also investigate the supply chain for natural graphite used commonly in anodes.

The researchers first calculated how much of each raw metal is used to generate five species of layered oxide cathodes. They then outlined supply chains for each element to convey where and how they are sourced and refined, and how they are traded globally. Metal supply chains were then compared to projected demand for five battery-species up to 2025. The team also estimated the cost of sourcing and refining raw materials, since that can make up 50% to 80% of battery-cell costs.

For nickel and manganese, the researchers determined minimal supply concerns, consistent with other research. The two metals are used heavily in other markets, especially steel manufacturing, so even a very larger increase in battery production would have minimal effect on their supply levels. In addition, both metals are abundant and sourced from multiple countries, so trade complications would be rare.

Conversely, when investigating cobalt and natural graphite, the researchers found that both elements are primarily sourced from single locations. In effect, government policy and socio-political instability could have significant implications on the price uncertainty and volatility for these commodities.

The research cites nearly 50% of the world’s cobalt mined in the DNC, and nearly 70% of the world’s graphite sourced from China. In addition, cobalt refining is concentrated in China, with imports to China from the DNC making up almost 40% of the total global trade value, or 1.2 billion USD annually. As the world’s leading producer of refined cobalt, China is the leading supplier of cobalt imports to the United States, says the report.

But advancements in extraction technology could affect the landscape for cobalt sourcing within the projected period, according to the researchers. While a large portion of the world’s cobalt is mined from nickel and copper mines in the DNC as a secondary product, future excavation technologies could enable cost-effective mining in primary cobalt mines. This would open opportunities for cobalt sourcing in regions outside the DNC.

Trade events and transparency in cobalt trade could also influence this market. For example, the addition of cobalt to the world’s largest metals exchange market, London Metal Exchange (LME), in 2010 led to a drop in its annual price volatility from 0.426 between the years 1970 and 2010, to just 0.126. The LME is a proclaimed transparent and effective exchange market, which is an important factor since cobalt mining in the DNC has been exposed by several organizations for unethical labor laws and sourcing.

Still, the researchers call for increased scientific development to create battery cathodes with materials other than cobalt to reduce the market’s dependency on the DNC. Currently, all commercial, high-energy density cathodes contain cobalt; it is widely used in portable electronics for its high energy density in lithium cobalt oxide batteries, LiCoO2 (LCO). It is also found in three types of lithium nickel cobalt oxide batteries (NCA) for electric vehicles. In fact NCA batteries are employed in cars manufactured by Tesla. To be effective, cobalt-free batteries would have to have competitive energy density to those used today.

Finally, the report investigates how lithium sources could potentially influence bottlenecking during the projected period of heightened demand. While previous research produces contradictory results regarding its supply for high battery production, the researchers highlight that it can be sourced in various ways apart from mining. The report says there are 13 to 40 million tons of lithium that can be isolated from brines in the ocean. Lithium can be source from brine within 6-8 months in the case of severe shortage.

To learn more about potentially bottlenecks in production over the next decade as demand for lithium-ion batteries increases, read the report (PDF) published in the journal, Joule.

Voice your opinion!

To join the conversation, and become an exclusive member of Supply Chain Connect, create an account today!