Lithium, coined ‘the new oil,’ is shifting global markets. Here’s what you need to know about it | 24CA News
As electrical autos develop into extra frequent, the assets serving to to energy the brand new era of transportation have gotten more and more prized.
Lithium — a steel that is a key factor within the batteries generally utilized in at the moment’s EVs — has develop into an extremely sizzling commodity lately. According to the United States Geological Survey, world consumption elevated by 41 per cent from 2021 to 2022.
Elon Musk, the CEO of Tesla, dubbed lithium-based batteries “the brand new oil.”
While lithium costs tumbled 65 per cent in 2023 after a meteoric two-year rise, analysts nonetheless anticipate a whole lot of recent mines are wanted to satisfy surging EV demand.
So the place does this newly vital useful resource come from, and the way can Canada benefit from its financial potential?
Where does lithium come from?
Lithium is not discovered as a standalone steel in nature, however portions of the useful resource can sometimes be sourced from underground hard-rock and brine deposits.
Hard-rock sources are sometimes accessed by means of conventional mining methods, whereas brine lithium is usually extracted by means of a months-long evaporation course of, stated Craig Johnson, a professor of political science on the University of Guelph who leads a analysis group lithium mining in 5 international locations.
Hard-rock mining can have long-term impacts on the panorama and brine extraction is immensely water intensive, whereas the long-term impacts on ecosystems, wildlife, and close by communities will not be well-understood, stated Johnson.
Community members and researchers have raised issues over the potential unfavorable impacts of those practices.
“There are costs associated with extracting lithium,” stated the researcher.
New methods are being developed to streamline extraction operations, however Johnson says they’ve but to be dropped at scale.
WATCH | Lithium mine might pose dangers for Quebec city:
A tiny Quebec city is about to be the house of certainly one of North America’s solely practical lithium mines. The coveted mineral is a key part of electrical automobile batteries. It might be a boon for the neighborhood, however critics warn attending to the mineral may be harmful.
Where is it being mined?
Australia, the world’s main producer of lithium, principally mines hard-rock, whereas Chile — who once-held the title of world’s largest producer — now stands in second and primarily makes use of evaporation, defined Johnson.
In 2022, Canada produced an estimated 500 tonnes of lithium — an quantity dwarfed by the tens of hundreds of tonnes produced by world lithium powerhouses.
In phrases of sheer amount, the U.S. Geological Survey states that Chile has the world’s largest lithium reserves — or, confirmed mineable deposits — at 9.3 million tonnes whereas Bolivia has essentially the most whole lithium assets of any nation with 21 million tonnes, however the mining potential of those deposits have but to be confirmed.
Australia pulled forward as the highest producer of lithium round 2017, and Johnson attributes the nation’s rise to efficient financing and easy geography.
“The fact that Australia is so close to the Asia Pacific and has such good access to those large markets in South and Southeast Asia really helps it to position itself in ways that countries like Chile or certainly Bolivia would really struggle to do,” he stated.
Who processes it?
Lithium does not go straight from the bottom into an EV. After extraction, the mineral is processed after which manufactured right into a functioning battery.
Johnson notes that China — the world’s third-largest producer of lithium — connects “the next link in the supply chain,” usually appearing because the world’s processor and producer.
“For the past decade, China has occupied this really critical niche where it has become the world’s most important producer of lithium-ion batteries and components for electric vehicles,” he stated.
The International Energy Agency signifies that China produces roughly three-quarters of lithium-ion batteries, with the final 25 per cent coming primarily from the United States, Europe, Japan and Korea. China can also be chargeable for over half of the world’s lithium refining.
The United States and the European Union have adopted insurance policies geared toward decreasing China’s position within the provide chain, stated Johnson. Despite these efforts, the International Energy Agency anticipates that China will nonetheless be chargeable for 70 per cent of battery manufacturing by 2030.
“That’s a formidable challenge, to say the least,” stated Johnson.
LISTEN | EV assets are the brand new gold rush:
Cost of Living27:06The new gold rush
The world is on the cusp of an EV revolution and auto makers are scouring the globe for the assets wanted to make all these batteries. Canada has most of the required vital minerals (cobalt, nickel, lithium). But can it transfer quick sufficient to show a revenue whereas balancing the pursuits of the setting and indigenous teams?
How does Canada match into the image?
Evan Pivnick, program supervisor for the think-tank Clean Energy Canada, says Canada must benefit from its vital mineral provides.
“Lithium is a really important opportunity for Canada,” he stated.
According to Natural Resources Canada, Canada has entry to the sixth-most lithium reserves of any nation. But, Canada’s 681,000 tonnes is much fewer than Chile’s or Australia’s 9.2 million and 5.7 million tonnes, respectively, and accounts for 3 per cent of the world’s whole reserves.
While manufacturing in Canada has been restricted, the tide could also be turning, stated Pivnick. Lithium mines in Manitoba and Quebec began producing inside the final yr, and extra initiatives are in numerous levels of planning.
“I think we’re a long way from reaching our full potential here, but it’s very squarely on the agenda in a way it wasn’t even just a year ago,” he stated.
Canada’s Critical Mineral Strategy was launched in late 2022 and recognized lithium as certainly one of six precedence minerals to focus on for financial development potential and provide chain requirements.
Pivnick considers the technique “a huge step forward” and initiatives just like the just lately introduced $13 billion Volkswagen battery manufacturing unit in St. Thomas, Ont. might help construct out Canada’s provide chain.
WATCH | A brand new Volkswagen battery plant is coming to an Ontario city:
Prime Minister Justin Trudeau is defending the federal authorities’s provide of as much as $13 billion in subsidies to construct a large Volkswagen electrical battery plant in St. Thomas, Ont., saying it would repay in lower than 5 years.
But, Pivnick says he wish to see a extra complete plan that additional positions Canada as a value-adding nation. “I think we need to go further. I think what we really still lack in Canada is a battery strategy.”
“It’s really looking at the upstream as a critical opportunity for Canada,” he stated. “Not just doing the throwback to the ‘hewers of wood, drawers of water’ mentality.”
Pivnick does not count on Canada to disrupt the worldwide order of lithium manufacturing anytime quickly.
But, international locations are starting to prioritize geopolitical reliability over price, and on this context, Canada is distinctly advantaged by its longstanding relationships with the United States and the European Union, says Pivnick.
“It’s no longer just a question of lowest cost production — it’s the security of supply.”
