The global demand for electric vehicles (EVs) has surged in previous years driving a parallel increase in the need for lithium.
The true global reach of lithium mining and its attendant geopolitical conflicts have become a focal point for meeting this growing demand. Ironically it’s a mix of inflation, advancements in battery technology and other factors that have led to price declines in the lithium spot price.
The changing market dynamics present both challenges and opportunities for lithium miners and investors, as they navigate the evolving landscape of the renewable energy sector.
This is how it’s evolved this week.
Austria to become EU’s only producing lithium mine by 2027
Critical Metals Corp (NASDAQ: CRML) has finalized a joint venture with the Obeikan Group to construct and operate a large-scale lithium hydroxide processing plant in Saudi Arabia. This 50/50 joint venture, named Arabian New Energy, will focus on converting lithium spodumene concentrate from the Wolfsberg lithium project in Austria. Arabian New Energy will have exclusive rights to purchase spodumene from Wolfsberg’s current resource. The plant’s development aims to meet the specifications of a long-term supply agreement with BMW.
The Wolfsberg project, Europe’s first fully permitted lithium mine located in Carinthia, Austria, is set to become the EU’s only producing battery-grade lithium mine by 2027. Critical Metals CEO Tony Sage mentioned that the costs for the hydroxide plant’s construction and operational expenses have improved compared to the original 2023 feasibility study.
“The assignment of this JV to Critical Metals Corp represents another huge milestone for the Wolfsberg project,” Sage said in Tuesday’s news release.
“Critical Metals Corp has two dedicated partners to ensure we fulfill our ambition to become the first European producer of both spodumene and hydroxide.”
The next steps involve updating and finalizing the feasibility study and securing funding for construction, overseen by the Board of Arabian New Energy with funding sourced from Saudi Arabia.
Additionally, this announcement follows Critical Metals’ recent acquisition of a controlling stake in the Tanbreez rare earth project in Greenland.
Read more: Lithium South Development expands production goals, updates PEA on Hombre Muerto lithium project
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ENTEK gets $1.2B loan for lithium-ion battery factory in Indiana
Meanwhile, in the United States, battery materials company ENTEK is taking advantage of favourable political headwinds in the pursuit of homegrown lithium manufacturing.
ENTEK has received a conditional $1.2 billion loan from the US Department of Energy’s Loan Programs Office to build a lithium-ion battery separator factory in Terre Haute, Indiana. Battery separators are crucial for the performance and safety of lithium-ion batteries, as they prevent electronic conduction between the anode and cathode while allowing ionic conduction through the electrolyte.
The factory will primarily supply separators for electric vehicles, enhancing the US lithium-ion battery supply chain.
The DOE also estimates that by 2030, the North American EV battery industry will need 7 to 10 billion square meters of separator production annually. ENTEK, headquartered in Lebanon, Oregon, will also sell separators to energy storage battery manufacturers and is a supplier to KORE Power.
Once completed, the factory will have the capacity to produce 1.72 billion square meters of separator material annually for the North American EV market. The project’s impact on EV production will vary based on battery form factors, supporting approximately 1.9 million mid-size EVs or 1.3 million eSUVs.
Further, the company anticipates that the factory will create 763 construction jobs and 635 operational jobs. It will also help US EV manufacturers meet battery component sourcing requirements under the 30D Clean Vehicle Credit in President Biden’s Inflation Reduction Act.
Chile opens competition for preferential pricing
Chile will soon open calls for lithium component producers to compete for preferential pricing on the metal produced by Albemarle Corporation (NYSE: ALB), as announced by Jose Miguel Benavente, the head of Chile’s CORFO economic development agency. Initially set for July, the call will now begin in one month due to high interest from various companies. This initiative aims to expand the production chain and potentially manufacture batteries within Chile.
President Gabriel Boric announced a strategy last year to spur local investment in lithium technologies, including batteries and battery components. As the world’s second-largest producer, Chile aims to leverage this strategy to enhance its position in the global lithium market.
In May, Chile allowed Albemarle to increase its lithium production by nearly 50 per cent, contingent on developing environmentally friendly extraction technology. Contracts with Albemarle and Chile’s SQM (NYSE: SQM) require a portion of their production to be sold at preferential prices to firms that develop value-added components.
Previous attempts in 2018 to allocate preferential pricing contracts to three firms failed due to supply and pricing agreement issues. Last year, CORFO granted similar contracts to Chinese companies BYD and Tsingshan Holding Group, but BYD postponed its lithium cathode plant start date in May due to uncertainty.
“What’s going on now is the normal process of necessary permits needed for those kind of plants,” Benavente said, adding that the BYD deal was moving along within the agreed-upon timeline and parameters.
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Texas tech study notes lithium-ion substance as air and water polluter
Jennifer Guelfo from Texas Tech University was part of a research team that identified a new sub-class of per- and polyfluoroalkyl substances (PFAS), used in lithium-ion batteries, as a growing source of pollution in air and water. The study, published in Nature Communications, found that these PFAS, known as bis-perfluoroalkyl sulfonimides (bis-FASIs), exhibit environmental persistence and ecotoxicity similar to harmful compounds like perfluorooctanoic acid (PFOA).
The research highlights a dilemma in clean energy infrastructure, as lithium-ion batteries are necessary for electric cars and electronics. While reducing carbon emissions is essential, it shouldn’t increase PFAS pollution. The team sampled various environments near manufacturing plants and found high levels of bis-FASIs, indicating potential long-range transport and environmental contamination from product disposal.
“These results illustrate that treatment approaches designed for PFOA and PFOS (perfluorooctanesulfonic acid) can also remove bis-FASIs,” said study author Lee Ferguson, associate professor of environmental engineering at Duke University.
“Use of these approaches is likely to increase as treatment facilities are upgraded to comply with newly enacted EPA Maximum Contaminant Levels for PFAS.”
Toxicity testing showed bis-FASIs could impact aquatic organisms, though their effects on humans are not yet studied. The research also found that while bis-FASIs are resistant to oxidation, they can be removed from water using granular activated carbon and ion exchange methods.
Guelfo and study co-author Lee Ferguson from Duke University stressed the need for multidisciplinary collaboration to develop clean energy technologies that minimize environmental impact, ensuring new energy solutions are genuinely clean.
Tsingshan and Eramet JV gets production rolling in Argentina
Tsingshan Holding Group, a Chinese nickel giant, announced on Tuesday that production began on July 3 at its brine lake project in Argentina. This project is a JV between Tsingshan and the French miner Eramet, located in Salta Province in northern Argentina.
Tsingshan Holding Group and Eramet formed the joint venture in 2019 to develop the Centenario-Ratones lithium project in Salta Province. The project aims to produce lithium carbonate, a critical component in the manufacture of lithium-ion batteries. The venture leverages Tsingshan’s expertise in metal production and Eramet’s mining capabilities to tap into Argentina’s rich lithium resources.
The plant is a joint venture between Chinese steel giant Tsingshan and Eramet. It’s set to become one of the first to use direct lithium extraction (DLE) at a commercial scale.
It will source the metal from the Centenario-Ratones deposit in Argentina, where Eramet holds perpetual mining rights over a 560 km² concession. The deposit boasts over 15 million tons of lithium carbonate equivalent (LCE) with an average concentration of 407 mg/L.
Additionally, Eramet is commissioning a highly automated processing plant. Despite the project’s success, it faces challenges such as altitude, extreme weather, and logistical difficulties in transporting large equipment to the site.
Argentina has played host to a number of partnerships and joint ventures in its lithium sector.
One notable partnership is between Korean chemicals giant, POSCO Holdings (NYSE: PKX) and Lithium South Development Corporation (TSXV: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ). These two companies agreed to focus on developing the Hombre Muerto North Lithium Project. This collaboration aims to leverage POSCO’s advanced lithium extraction technology to tap into one of Argentina’s premier salars.
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Lithium South Development Corporation is a sponsor of Mugglehead news coverage
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