The push towards the use of clean energy has prompted nations and private enterprises to make the shift to renewable power sources and vehicles or equipment running on cleanly generated energy instead of fossil fuels. However, an expert notes that this endeavor’s progress will be slowing down thanks to an ongoing shortage in the global supply of lithium.
According to mining expert Joe Lowry, affably nicknamed “Mr. Lithium” in the industry, the mineral itself is one of the most abundant materials in nature. However, what keeps the supply low is the tedious method by which it is extracted and refined. Indeed, while companies can easily set up and run a battery factory within a couple of years, the time it takes to produce the primary raw material can take up to a decade.
How Hard Could Lithium Mining Be?
Lithium extraction is a complicated process. One either mines the ore by digging it up and separating it from the rock, or extracts it by pumping the contents of underground water deposits to the surface and leaching the mineral out through electrolysis. Both processes have changed little over the course of the past several decades.
Today, between 70 and 80% of the world’s raw lithium is controlled by China, which further complicates the supply chain issue. But other nations are seeking ways by which to augment their own lithium supply either for domestic use or export. The United States currently produces less than 2% of the global supply, but it is in the process of improving lithium extraction within its borders. Australian mining companies are also working on amping up their operations, partnering with mines in South America, particularly Argentina which has ample natural reserves of the mineral.
What’s Driving the Shortage?
Over the past three years, EV sales worldwide have leapt up to an all-time high. Indeed, several carmakers reported record shipments of their vehicles in the first quarter of this year, including key industry player Tesla as well as Mercedes-Benz and Volkswagen.
Unfortunately, it is this increased demand for EVs that has significantly depleted the supply of lithium. Indeed, the use of lithium in manufacturing quadrupled over the past ten years. The resulting shortfall in supply has led to a 438% increase in the market price of the mineral over the past year.
The dwindling supply and surging price of lithium aren’t the only issues that EV makers have to contend with, however. Nickel and palladium, two other minerals necessary for the production of rechargeable batteries, remain in short supply thanks to the ongoing conflict between Russia and Ukraine.