The Road to Electrification
The world is moving towards a cleaner future, one where we will likely see electric vehicles (EVs) dominating our highways and city roads.
In turn, increasing EV adoption will inevitably increase the demand for battery metals, the critical ingredients of lithium-ion batteries. With governments tightening emission standards and some planning to ban gas-powered vehicles completely, securing the supply of these minerals is becoming increasingly important.
Europe—the largest market for EVs—is well on the way to electrification, but it faces one big speedbump: lithium supply. The above infographic from Rock Tech Lithium outlines the lithium supply chain and Europe’s lithium challenge on the road to large-scale EV adoption.
The Lithium Supply Chain
Before lithium makes it into EVs, miners extract it from the ground and downstream companies convert it from its raw form into lithium chemicals for batteries.
According to the USGS, there are 86 million tonnes of lithium resources worldwide, but the majority of production comes from a few regions.
|Country||2020E Production (tonnes)||Resources (tonnes)|
Australia, Chile, and China collectively accounted for 88% of lithium supply in 2020. Australia, the largest producer, produces the majority of its lithium from hard-rock spodumene mines. In the Western Hemisphere, Chile is known for lithium evaporation ponds in the Salar de Atacama, its largest salt flat.
Refining lithium into battery-grade chemicals is just as important as resources in the ground. China, the third-largest lithium producer, also dominates the production of downstream chemicals—lithium carbonates and hydroxides—with over 80% of global refining capacity.
Due to concentrated mine production and China’s dominance in the supply chain, the rest of the world is dependent on imports from a few nations. Import reliance and the resulting lack of supply chain security are a cause for concern, especially as lithium demand rises.
Europe’s Rising Need for Lithium
The European Union (EU) aims to have at least 30 million electric cars on its roads by 2030. In addition, European countries have rolled out various incentives for EV adoption—from subsidies for manufacturers to tax benefits for buyers. Consequently, Europe is becoming a hub for EV and battery manufacturers.
In fact, the EU is expected to account for 18% of global battery manufacturing capacity by 2029, up from 6% in 2019. And this doesn’t account for the six new plants that Volkswagen is planning to build by 2030.
With a growing demand for EVs comes a rising need for lithium. According to the European Commission, relative to current supply levels, the EU will need 18 times more lithium by 2030 and 60 times more by 2050.
Without any large-scale domestic production, the EU is heavily reliant on lithium imports. This puts its supply security and sustainability at risk for the long term.
Tackling Europe’s Lithium Supply Challenge
In a bid to develop a domestic lithium-ion battery supply chain, the EU has taken up initiatives to support every stage, from sourcing raw materials to producing finished battery packs.
- The European Raw Materials Alliance (ERMA)
The ERMA aims to develop a resilient supply chain for critical minerals by strengthening domestic raw material production.
- Financial support
The EU is offering EUR6.1 billion (roughly $7.5 billion) in subsidies to develop the battery production supply chain.
- The European Battery Alliance
A network of more than 600 participants from the battery value chain, aiming to build a strong and competitive European battery industry.
EVs are a key part of Europe’s push towards decarbonization, and mainstream EV adoption requires a sustainable supply of critical minerals like lithium.
Alongside these initiatives, developing new sources of both raw materials and refined products will play a key role in solving Europe’s lithium supply challenge.
Charted: America’s Import Reliance of Critical Minerals
The U.S. is heavily reliant on imports for many critical minerals. How import-dependent is the U.S. for each one, and on which country?
Charting America’s Import Reliance of Key Minerals
The push towards a more sustainable future requires various key minerals to build the infrastructure of the green economy. However, the U.S. is heavily reliant on nonfuel mineral imports causing potential vulnerabilities in the nation’s supply chains.
Specifically, the U.S. is 100% reliant on imports for at least 12 key minerals deemed critical by the government, with China being the primary import source for many of these along with many other critical minerals.
This graphic uses data from the U.S. Geological Survey (USGS) to visualize America’s import dependence for 30 different key nonfuel minerals along with the nation that the U.S. primarily imports each mineral from.
U.S. Import Reliance, by Mineral
While the U.S. mines and processes a significant amount of minerals domestically, in 2022 imports still accounted for more than half of the country’s consumption of 51 nonfuel minerals. The USGS calculates a net import reliance as a percentage of apparent consumption, showing how much of U.S. demand for each mineral is met through imports.
Of the most important minerals deemed by the USGS, the U.S. was 95% or more reliant on imports for 13 different minerals, with China being the primary import source for more than half of these.
|Mineral||Net Import Reliance as Percentage of Consumption||Primary Import Source (2018-2021)|
|Graphite (natural)||100%||🇨🇳 China|
|Indium||100%||🇰🇷 Republic of Korea|
|Rare Earths (compounds and metals)||95%||🇨🇳 China|
|Titanium (metal)||95%||🇯🇵 Japan|
|Chromium||83%||🇿🇦 South Africa|
|Aluminum (bauxite)||75%||🇯🇲 Jamaica|
|Platinum||66%||🇿🇦 South Africa|
|Zirconium||50%||🇿🇦 South Africa|
These include rare earths (a group of 17 nearly indistinguishable heavy metals with similar properties) which are essential in technology, high-powered magnets, electronics, and industry, along with natural graphite which is found in lithium-ion batteries.
These are all on the U.S. government’s critical mineral list which has a total of 50 minerals, and the U.S. is 50% or more import reliant for 43 of these minerals.
Some other minerals on the official list which the U.S. is 100% reliant on imports for are arsenic, fluorspar, indium, manganese, niobium, and tantalum, which are used in a variety of applications like the production of alloys and semiconductors along with the manufacturing of electronic components like LCD screens and capacitors.
China’s Gallium and Germanium Restrictions
America’s dependence on imports for various minerals has resulted in a new challenge resulting from China’s announced export restrictions on gallium and germanium that took effect August 1st, 2023. The U.S. is 100% import dependent for gallium and 50% import dependent for germanium.
These restrictions are seen as a retaliation against U.S. and EU sanctions on China which have restricted the export of chips and chipmaking equipment.
Both gallium and germanium are used in the production of transistors and semiconductors along with solar panels and cells, and these export restrictions present an additional hurdle for critical U.S. supply chains of various technologies that include LED lights and fiber-optic systems used for high-speed data transmission.
The restrictions also affect the European Union, which imports 71% of its gallium and 45% of its germanium from China. It’s another stark reminder to the world of China’s dominance in the production and processing of many key minerals.
The announcement of these restrictions has only highlighted the importance for the U.S. and other nations to reduce import dependence and diversify supply chains of key minerals and technologies.
Why Copper Is a Critical Mineral
From the electrical grid to EVs, copper is a key building block for the modern economy.
Why Copper is a Critical Mineral
Copper is critical for everything from the electrical grid to electric vehicles and renewable energy technologies.
But despite copper’s indispensable role in the modern economy, it is not on the U.S. Critical Minerals list.
This infographic from the Copper Development Association shows what makes copper critical, and why it should be an officially designated Critical Mineral.
Copper’s Role in the Economy
Besides clean energy technologies, several industries including construction, infrastructure, and defense use copper for its unique properties.
For example, copper is used in pipes and water service lines due to its resistance to corrosion and durable nature. As the Biden Administration plans to replace all of America’s lead water pipes, copper pipes are the best long-term solution.
Copper’s high electrical conductivity makes it the material of choice for electric wires and cables. Therefore, it is an important part of energy technologies like wind farms, solar panels, lithium-ion batteries, and the grid. The demand for copper from these technologies is projected to grow over the next decade:
|Energy Technology||Annual Copper Demand Growth (2021-2035P)||Use of Copper|
|Offshore wind||23.3%||Undersea cables, generators, transformers|
|Battery storage||21.8%||Transformers, wiring|
|Automotive*||14.0%||Batteries, motors, charging infrastructure|
|Solar PV||11.9%||Wiring, heat exchangers|
|Onshore wind||9.8%||Cabling, transformers, substations|
|Electrical transmission||7.2%||Transformers, cables, circuit breakers|
|Electrical distribution||2.7%||Transformers, cables, circuit breakers|
*excludes internal combustion engine (ICE) vehicles.
Furthermore, policies like the Inflation Reduction Act and Bipartisan Infrastructure Law will bolster copper demand through energy and infrastructure investments.
Given its vital role in numerous technologies, why is copper not on the U.S. Critical Minerals list?
Copper and the Critical Minerals List
The USGS defines a Critical Mineral as having three components, and copper meets each one:
- It is essential to economic and national security.
- It plays a key role in energy technology, defense, consumer electronics, and other applications.
- Its supply chain is vulnerable to disruption.
In addition, copper ore grades are falling globally, from an average of 2% in 1900 to 1% in 2000 and a projected 0.5% in 2030, according to BloombergNEF. As grades continue falling, copper mining could become less economical in certain regions, posing a risk to future supply.
The current USGS list of Critical Minerals, which does not include copper, is based on supply risk scores that use data from 2015 to 2018. According to an analysis by the Copper Development Association using the USGS’ methodology, new data shows that copper meets the USGS’ supply risk score cutoff for inclusion on the Critical Minerals list.
Despite not being on the official list, copper is beyond critical. Its inclusion on the official Critical Minerals list will allow for streamlined regulations and faster development of new supply sources.
The Copper Development Association (CDA) brings the value of copper and its alloys to society, to address the challenges of today and tomorrow. Click here to learn more about why copper should be an official critical mineral.
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