The many battles in the lithium and critical minerals revolution

In 2021, the Joe Biden administration put out a report about gaps in the electric vehicle supply chain. It estimated global demand for lithium and graphite would grow by more than 4,000% by 2040 if the world were to achieve the climate goals laid out in the Paris accords of 2015.

These materials, along with copper, nickel and others, are critical to green technologies. And there is a global fight over their supply, one that Reuters correspondent Ernest Scheyder documents in his new book, “The War Below: Lithium, Copper, and the Global Battle to Power Our Lives.”

He told Marketplace’s Lily Jamali about why lithium, in particular, is in such high demand and the challenges of bringing it to market.

The following is an edited transcript of their conversation.

Ernest Scheyder: Lithium is a metal that is extremely light. And it also is great at conducting a charge, which you can imagine why it would be so important for a battery, especially in an electric vehicle and household appliances. Because it’s so light, that makes the battery light, and that makes the car go a lot farther with the power that’s inside the battery. So it forms the core of lithium-ion batteries, as the name implies, and it’s become extremely popular. And not just in electric vehicles, but millions of handheld electronic devices across the globe.

Lily Jamali: Yeah. And one of the places that’s been targeted for mining lithium here in the U.S. is Rhyolite Ridge, Nevada. But it’s also been a very controversial site, as far as mining lithium there. Why is that? Walk us through that controversy.

Scheyder: This site also features a rare flower that’s found nowhere else on the planet. And this flower loves this lithium-rich soil. And it really brings to the reader this idea of choice: What do we value more as we have this green energy transition accelerate? Do we value ways to fight climate change more? Do we value biodiversity more? If we did nothing about climate change, would this flower go extinct due to climate change anyhow? So these are the questions that I’m hoping people dig through when they read the book.

Jamali: Well, based on all of the reporting that you did, Ernest, which way does the pendulum seem to be swinging in terms of a potential mining revival here in the U.S.? Because there are now so many of these proposed projects out there.

Scheyder: Right. I mean, in order to have these billions of electronic devices that are used around the world and are coming, we’re going to have to be having a conversation about where, how and why we hope to get lithium and other critical minerals. And if the coronavirus pandemic taught us anything, it’s that really, really long supply chains, or relying on other parts of the world for the building blocks of our everyday lives, isn’t as feasible as it once was. And so the more lithium and other critical minerals that are produced domestically in the United States, the shorter the supply chains, the less carbon emissions there are from shipping and the more energy independence, or at least striving for energy independence, can be achieved in the United States. And so for a long time, the United States was not a mining jurisdiction. In the 1970s and ’80s and ’90s, mining fell out of fashion. It’s considered a pretty dirty industry, because it is. Mining creates literally a hole in the ground, and there can be a lot of waste, it can use a lot of water. But there has to be discussions about what are the safe ways to mine and produce these critical minerals in order to have these technologies of the future?

Jamali: Yeah. You mentioned that the waste and the water usage that, in a lot of ways, defines mining and has sparked so much opposition. And I feel like that’s really a big part of the irony here, is that lithium is key to electrification, which is key to getting us to net zero, but the mining itself can have these very significant climate impacts.

Scheyder: Yes, it can. And especially if you’re pulling from a mine that’s on the other side of the world. Right now, one of the main lithium-producing regions in the world is in northern Chile. Just think about the supply chain: You produce the lithium there, and then you lightly process it and then track it to the coast. And then you ship it across the Pacific Ocean to, let’s say, another processor in Asia, maybe China, maybe elsewhere, where it’s further refined into a usable form of lithium that can be put into a cathode, which is part of a battery. Then it’s put into a battery and maybe a battery pack, and then maybe shipped back across the Pacific Ocean, let’s say, maybe to an automaker in the United States, where it’s then put into an EV. And that’s maybe shipped to a customer in Florida. Just think about that huge, long supply chain and what that does for emissions and that also could be interrupted by any number of events, whether that’s a natural disaster or a conflict or something else. And so right now, the United States produces only trace amounts of lithium domestically. It also doesn’t produce any cathodes right now for electric vehicle batteries. And so if we want this energy transition, we have to be having a discussion about where we should be producing them. And are there places that we should be allowing lithium extraction? And what are the things that we value more?

Jamali: So what is the fate of the Rhyolite Ridge deposit, which you write so eloquently about in your book?

Scheyder: So we chronicle in the narrative this tension between the two sides, and one of the things that I really wanted to dig into, if you’ll excuse the pun, was the ways that Washington, D.C., sort of speaks in two voices. So at one point, this rare flower was declared an endangered species. And we chronicle that story in the book. At the same time, the Department of Energy decides to give a conditional loan to the company for $700 million to produce that lithium. And so how do you produce lithium at a site that contains an endangered species? That’s where the regulatory review process is right now. It is moving forward, and this is a mine that has received, as I mentioned, the financial loan guarantee from the Biden administration. It was the first proposed lithium mine in the United States to achieve that mark. It also has neared the end of the permitting process. And so it also has received huge support from the Biden administration there. But there are other parts that aren’t fully speaking with one voice on it. And therein lies the tension around this project and related projects in the country.

Jamali: Ernest, talk to me about what’s happening in lithium markets right now.

Scheyder: There is a lot of irrational exuberance going into 2024 around electrification. And what we’ve seen is a bit of a cooling. The penetration rate for electric vehicles, if you’ll forgive the pun, was going to be 80 miles an hour, and now it’s maybe going 55 or 60 miles an hour. And that combined with lowering prices for lithium in China, due partly to oversupply, has caused a lot of concern right now that there could be a cooling or huge slowdown. What we have seen when we look at raw penetration numbers for electric vehicles is that demand just continues to spike even compared to three or four years ago. It’s just not growing as fast as it perhaps have been expected to when the year started. And so you’re starting to see large companies like Albemarle, the world’s largest lithium company, decide to sort of pare back spending. It does mean that there is some concern about where lithium could go in the short term. But there’s so many devices out there that are powered by lithium-ion batteries, including cellphones, including laptop batteries, including everything else that’s electrified in our home, so demand for lithium will only go up.

Jamali: Yeah, it’s not going anywhere. The U.S., we have to mention, is now the world’s top producer of both oil and natural gas. Hard to believe, but it’s true. Do you see the U.S. becoming a powerhouse producer of critical elements like lithium at some point?

Scheyder: I’m fascinated by the technology around different ways with which that goal could be achieved. So the traditional ways to produce lithium right now are either what folks think of when they think of mining, like a hole in the ground, known as hard rock mining. Or producing lithium from evaporation ponds with basically pumping brine out of the ground — brine is like a salty liquid — and then you evaporate out the lithium in a series of steps. So those are the two main ways that lithium is produced right now in the world. But there’s been a rise of new, nascent technologies known as direct lithium extraction that companies including ExxonMobil and others are investing a lot of money in to be able to essentially filter lithium from underground reserves using what could best be described as a process that sort of mimics a household water softener. Now, it’s never worked before at commercial scale. But if it can be achieved, it would unlock a lot of deposits across the United States for lithium production. And more interestingly, it would let oil producers filter trace amounts of lithium that is commingled with crude oil when they extract it out of the ground. So this is an area that’s been a huge cost for the oil industry for years. And if they could turn into a profit area by producing lithium, you could just imagine the sheer potential for lithium production that could be in the United States. But there’s a lot of technical questions that has to be figured out there. And so the hope certainly is there. And what that also would do is it would maybe lessen or abrogate a lot of these fights over whether or not some places are too special to mine because you’re not putting a giant hole in the ground.

Jamali: I want to ask you about whether critical elements like lithium are going to be the next wave of the battle for energy security, since you had a front-row seat to the U.S. shale revolution. So you’ve seen how quickly these forces can shift. Are critical elements the next battleground?

Scheyder: You know, I definitely see that there’s a lot of contours of similarity there between the shale oil revolution and this critical materials revolution. And whoever controls the nickel and copper and lithium and cobalt production in the 21st century will control this century’s economy the way that control of petroleum helped define the 20th century’s economy. All of these devices that are powering our everyday lives are built with critical materials. Most of the weapons that the Pentagon and other militaries in the world uses are built with critical minerals. Think of so many other places, things that you touch every single day that are electronic or otherwise, most of them are built with critical minerals and materials. And so we definitely start to see that demand for copper is going to continue to rise, for instance — copper is a cornerstone critical mineral. And there have been some analysts that estimate that if there’s not enough copper out there, we could see armed conflicts in the 21st century over copper the way that there were armed conflicts in the 20th century over petroleum. That’s a bit of a stark forecast to be sure, but it just lays bare the stark need for a lot of these critical minerals and materials across the world and why I really hope that we as Americans, we as global citizens, think through where and how and why we get these building blocks because we can’t just put our heads in the sand and pretend this is not an issue to grapple with any longer.

More on this

In our conversation, Ernest Scheyder touched on how mining lithium to help the environment can pose hazards to the environment. USA Today is out with a story on that this week, featuring an analysis by the Howard Center for Investigative Journalism at Arizona State. Reporters looked at the likely impact of 72 proposed lithium mines across nine U.S. states and found there are no federal rules governing how much water mines can consume. It also found that most proposed lithium projects here at home are actually owned by foreign companies or subsidiaries.