Demand for battery metals is already growing fast, but it’s just getting started. Like it or not, clean technologies like EVs and energy storage, and renewable energies like solar and wind, rely on finite natural resources. As demand for mineral-intensive items like lithium-ion batteries for energy storage and electric vehicles heats up along with the global clean energy transition, the production of these resources is going to need to grow along with it. But can it?
Many leading experts have worried about whether the world has enough of these non-renewable resources to make the ‘great reset’ possible without depleting these minerals and driving prices prohibitively high. In short, the worry is no longer peak oil; it’s now peak lithium. One major problem is that no one knows for sure exactly how much lithium we have. As of 2021, it was estimated that the world had 88 million tonnes of lithium resources. One-quarter of that – 22 million tonnes – is feasibly extractable. This issue is that this figure is changing all the time as we explore for more lithium and find more advanced ways to extract it.
While there has been much hand wringing about running out, some experts think that it’s far too soon to panic. In fact, the U.S. geological survey says that these kinds of resources are “relatively abundant.” And as Hannah Ritchie, a data scientist at Oxford University, explained early this year: “We keep discovering more lithium, and we get better at mining it.” Basically, she argues, worrying over lithium supply is a malthusian fallacy. Those who claim that we are running out aren’t taking technological advancement into account. If we count the lithium present in seawater, for example, we’ll have more than we could ever need – we just need the technology to extract it. And necessity, as they say, is the mother of invention.
And now, a new study published in scientific journal Joule on Friday unequivocally concluded that the world has enough raw materials, including battery metals minerals, to make the big switch from fossil fuels to renewables. Lithium won’t even be the biggest worry. The closest calls will be with rare earth minerals dysprosium and tellurium, the first of which is used in wind energy production and the latter in solar farms. But in both cases proven reserves outstrip predicted demand.
“Decarbonization is going to be big and messy, but at the same time we can do it,” study co-author Zeke Hausfather, a climate scientist at the tech company Stripe and Berkeley Earth, was quoted by the Associated Press. “I’m not worried we’re going to run out of these materials.” While the findings from the Joule study are considerable, however, it’s important to note that they only took into account energy needs, and not other big consumers of rare earth materials such as electric vehicles. Making the calculation for EVs is much more complicated, and the team from this paper has said that that’s what they will tackle next.
Even if the quantity of rare earth minerals doesn’t hold back the green energy transition, however, there are other geopolitical risks associated with the supply chains of these essential resources. For one thing, all of this mining will also release more greenhouse gasses into the atmosphere, but these emissions will be so far offset by the reductions achieved in the green energy transition that they are negligible.
But there is another concern that proves far more worrying. As elements like lithium become more demanded and therefore more valuable, companies and countries around the world are trying to shore up supply chains and acquire reserves as quickly as possible. And the West is lagging far behind. China currently dominates battery metal supply chains, and has continued to consolidate its already near-monopolistic market power. This could cause major issues in the future, as Beijing is not above using these supply chain strangleholds for political leverage. The West is working hard to make up the difference by investing in lithium development in allied countries – but they will have to work a lot harder to make a dent in the stranglehold that China has been cultivating for years.
By Haley Zaremba for Oilprice.com