Europe’s Lithium Supply Woes
Lithium is an essential component of battery storage technologies and electric vehicles (EVs). Lithium-ion (Li-ion) batteries are lightweight, rechargeable, and powerful—used in cell phones, laptops, tablets, electric vehicles, storage banks for renewable energy, and so forth.
In the European Union (EU) though, lithium is in short supply. This leaves the region heavily reliant on imports and puts at risk plans to expand the deployment of renewable energy technologies, as well as EVs. EU data indicates domestic lithium concentrate production of a mere 128 tons per year. Processed lithium compounds production is also negligible.
Indeed, so dire has the situation in Europe become that lithium has now been added to the region’s critical raw materials (CRM) list for the first time, joining other key battery metals such as cobalt and natural graphite. In 2020, European EV sales accounted for more than 50,000 tons of lithium consumption. Benchmark Mineral Intelligence, a specialist lithium information provider, estimates that at current growth rates, compound annual lithium consumption could rise to 45% by 2025. By then, the region’s market share of global raw lithium will still be less than 3% while its market share of lithium chemical supply will be approximately 2%.
European lithium hard-rock mineral deposits are mainly located in Portugal, the Czech Republic, Finland, Germany, Spain, and Austria. Ukraine also has the potential to become a significant player. European Lithium, an Austrian mining company, has secured rights to what it describes as two promising lithium deposits in the country, both first having been discovered in the 1980s and 1990s. A phased acquisition of the two deposits has now been agreed upon, and the transaction is expected to close in November 2022.
However, any development plans are likely to be dependent on Ukraine’s security environment at the time.
Meanwhile, in Portugal, which is thought to have Europe’s largest lithium reserves, the country’s environment regulator could approve later this year to commence work on a new lithium mine. The British mining firm Savannah says the deposit could provide enough lithium for up to 600,000 EVs per year for ten years. In 2020, Portugal produced 900 tons of lithium, with reserves estimated at 220,000 tons.
In other European developments, the Czech Republic’s lithium and tin mining project Cinovec shows promise. The Finnish mining and battery chemical company Keliber Oy is believed to hold several advanced lithium deposits. The spodumene deposit near Wolfsberg in Austria could also see lithium hydroxide production by the end of 2023. In Italy, Vulcan Energy Resources Limited has been granted a research permit for the Cesano area near Rome. If successful, the Cesano Project could provide a source of strategic, sustainable lithium in Italy for Europe’s battery and automotive market. According to Dr. Francis Wedin, Vulcan’s managing director, “[t]he area has a positive flow rate, historical lithium grade, and reservoir temperature indications that could be conducive to Vulcan’s … method of using renewable heat to drive lithium processing, with [a] net-zero carbon footprint, for the European electric vehicle market.”
European Environmentalists’ Concerns
Developments in Portugal, Italy, and Ukraine have been welcomed by industrial lithium consumers. Nevertheless, they are facing environmentalists’ concerns about the effect of lithium mining and processing elsewhere in Europe. In January 2021, national protests throughout Serbia led to the halting of Rio Tinto’s proposed $2.4 billion Jadar lithium mining project. Rio had already spent $450 million in feasibility studies in Jadar. Serbian politicians warned that scuttling the project could have incalculable effects on the Balkan country's and wider European economy. At full capacity, Jadar was expected to produce 58,000 tons of refined battery-grade lithium carbonate a year, making it Europe's biggest lithium mine by output.
The European Battery Alliance, a network of European EV supply chain companies, commented on the project: “[It] constituted an important share of potential European domestic supply. It would have contributed to support the growth of a nascent industrial battery-related ecosystem in Serbia, contributing a substantial amount to Serbia’s annual GDP.” There have been also protests in Spain, in the vicinity of Caceres and the Canaveral district, against the opening of two large lithium mines there.
To protect Europe’s very limited lithium supply chains and at the same time burnish their green credentials with environmentalists, European battery makers and the automotive industry are going to great lengths to strike innovative supply deals that take into account their concerns. In December 2021, Volkswagen signed a deal with Vulcan Energy, which is in the early stages of bringing its geothermal brine project into production. Galp Energia has also announced plans to build a $780 million (€700 million) lithium processing joint venture with Swedish battery maker Northvolt in Portugal. But as energy storage analyst Anna Darmani said, “Europe’s nascent battery industry is highly dependent on the import of critical raw materials. Europe needs to import more than 75% of its needs from other regions.”
Europe’s Entrenched Lithium Competitors
One problem standing in the way to develop a successful European lithium sector are the well-established and entrenched lithium industries of countries such as Australia, Chile, China, and the “Lithium Triangle” in South America. These industries already have a competitive advantage over Europe in lithium mining and processing due to lower labor costs. Imports from Australia cover most of the EU’s demand for lithium concentrates, while Chile is by far the EU’s largest supplier of refined lithium compounds. Chinese predominance in lithium concentrates is an added difficulty.
Hopes for Lithium Recycling
Recycling could provide the means to address at least partially some of these concerns. The recovery of lithium from batteries is already technically possible but it remains cost prohibitive in comparison with primary supplies. Furthermore, the process is hindered by the wide variety of chemistries and battery formats. Globally, only a miniscule 20 tons of lithium is typically recovered from secondary sources in any given year. The only waste flow with lithium recycling potential is discharged lithium batteries. But over the last few years, commercial lithium recycling has grown in feasibility due to the constantly increasing significance of Li-ion batteries, especially in the rapidly growing EV sector. Regulatory instruments including various EU directives are also driving higher recycling levels for waste Li-ion batteries in EVs and electronic equipment.
“Recycling of Li-ion batteries has the potential to create a continuous and secure secondary stream of lithium supply for the EU in the future under conditions that will make it economically attractive.”
Because of the difficulties associated with extracting lithium from EV batteries, the main focus of Li-ion battery recycling plants has tended to be the recovery of cobalt, nickel, and copper, as these have higher economic values than lithium. Nevertheless, the recent introduction of EVs on the European market could provide a boost for lithium recycling when they reach the end of their 10-year average lifespan. “Recycling of Li-ion batteries has the potential to create a continuous and secure secondary stream of lithium supply for the EU in the future under conditions that will make it economically attractive,” says the European Commission.
Recently, progress has been made that could transform the prospects for lithium recycling. In the US, Ascend Elements has created a process to shred used batteries from phones and cars and extract the raw materials including lithium for reuse. The firm plans to open a large battery recycling plant in Georgia. The Anglo-Swiss mining company, Glencore, has also unveiled plans to build a 10,000 tons per year lithium-ion recycling plant in Northfleet, Kent, U.K. The facility, which will be operational by mid-2023, will process all of Britishvolt’s battery manufacturing scrap from their plant. In other developments, Canada-based Ly-Cycle has entered into a joint venture with Norwegian partners to build a new 10,000 tons per year Li-ion recycling facility in Norway. The plant is scheduled to start operations in the fourth quarter 2024.
*Nnamdi Anyadike is an industry journalist specializing in metals, oil, gas, and renewable energy for over thirty-five years.
Editorial note: For more information on lithium resources worldwide see the data section’s brief “The Earth Has 86 Million Tons of Lithium Resources.”