Battery raw materials demand soaring

She said the challenge is to grow from 851GWh of battery demand in 2022 to 24TWh "to green the grid and then 140TWh to green the entire global fleet".O'Hara said the development of charging infrastructure is the main barrier to further EV adoption. "EV to charging point ratio of 10:1 is seen as the key necessity to encourage conusmers to adopt EVs. South Korea, China, the Netherlands and France are under this: the US is 49:1, which is critical as range anxiety is the biggest fear consumers have," she said.She also said energy storage systems (ESS) are forecast to experience a 20% compound annual growth rate (CAGR) from 78GWh in 2022 and is emerging as a key segment rather than playing second fiddle to the EV sector. "Government policy in the US has seen a huge expansion in procurement targets in several states, with 80GWh to be installed by 2025 with California and Texas leading the way. In China, 100GWh are forecast by 2025 with a policy that any new renewables installation needs to be accompanied by ESS. For example, every 10MW of new solar capacity requires 10-15% of ESS," she said.Largest lithium conferenceEarlier, Fastmarkets CEO Raju Daswani said the event was the largest and oldest lithium conference, with 1100 delegates from 450 companies in more than 35 countries and more than 100 speakers. Since its first event in 2009, lithium-ion batteries have grown from 29% of the lithium market to 82% in 2022, with the volume increasing to 700,000t from 100,000t, and a CAGR of 35%pa today."We have come through an extended period of price volatility destocking and demand headwinds. Prices saw a sharp correction of 50-70% in early 2023 but are now growing again as companies are transitioning from destocking and purchasing is resuming," said Daswani.Daswani said black mass, the recycled product of lithium-ion batteries, will become a critical factor for materials supply over the next decade, leading Fastmarkets to launch a South Korea black mass payable price in May."Currently, 70% of black mass comes from production scrap as 5-30% of battery production doesn't pass quality checks. At the end of this year, 600,000t of total battery scrap will be produced rising to 2.5Mt by 2033. End-of-life batteries will come to be the largest source at 60%," he said.IRAThe 2022 US Inflation Reduction Act (IRA) received widespread praise as a catalyst for investment in US battery supply chains in the US, and beyond. The act provides funding and grants for supply chain projects in the US and countries with whom the US has free trade agreements (FTA).Helaina Matza, deputy special presidential coordinator for the Partnership for Global Infrastructure Investment at the US State Department, said that the IRA funding programme is not a case of some countries being "in" and some being "out", but for companies to think who they are partnering with. "You need to think through transparency of sourcing, labour and environmental implications of sourcing, how countries are governing their supply chains and bringing down emissions," she said.Matza's comments perhaps referred to Argentina, a country with whom the US does not enjoy a FTA, although it is a growing lithium brine producer and has signed collaboration agreements with China and the European Union."We need to ensure there are other processing hubs, not just because of China's [dominant position] but because we expect exponential demand so we need other hubs. The importance is ensuring there is investment through the value chain, to ensure the global market can develop at the rate it is forecast to," said Matza.TimelinesMatza said a key aspect was the time issue as the development timelines of different parts of the value chain do not match. While permitting times for processing plants may take three to seven years to permit, for mines, it can be seven years or more. "IRA isn't about favouring any one element or commodity in the supply chain, but not creating disruption because different parts of the supply chain have different time intervals," she said.Permitting times is seen as an obstacle for the mineral sector to provide the raw materials required for the energy transition, including for copper projects. Matza said president Joe Biden and the White House have been clear that permitting is on the agenda for renewables, gas, and mining and processing projects. "The administration is testing the Fast 41 approach. It is very clear here in DC that permitting is a challenge to meet our domestic need," she said.Supply chain disruption seems inevitable though Christian Barbier of Alkem said in the subsequent panel. "Every segment in the supply chain needs to grow its capacity concurrently. This will mean disconnects, such as oversupply and deficits at different points. There can only be bad surprises. It is unlikely we will have good surprises," he said. OEMsThe panel, featuring participants from Livent, Albamarle, Alkem, Tianqi Lithium and Pilbara Minerals, said automotive companies increasingly recognise the need to ensure access to key battery raw materials and are positioning themselves in different ways from partnerships to direct investments and offtakes. This is seen as essential to help ensure the development of new greenfield mineral projects."Partnerships serve a key role due to the cost of developing greenfield projects and the lack of the right skill sets. Chemical engineering know-how to produce battery-grade lithium outside of China is a challenge. …OEMs have really stepped up to provide funding and non-financial benefits such as unlocking doors in government," said Sarah Maryssael, chief strategy officer of Livent."You don't want to be the person left holding an empty bag. The opportunity is partnerships. That is how [automotive companies] can gain the supply they need, going to proven operators and working out how to make the supply chain sustainable," said Eric Norris, president of energy storage at Albemarle.In part, this is driven by automotive companies not wanting to get into the mining business. "OEMs are starting to realise that mining is a different animal to manufacturing, and that it is important to be integrated with the mining industry. They are willing to invest upstream but don't want to run mining operations," said Christian Barbier, chief sales and marketing officer at Allkem.Partnerships will also become more critical for minerals producers as battery manufacturers' requirements become more stringent. "Consistency and meeting specifications are getting harder due to liability concerns around battery fires. Making consistent battery-grade lithium to get into the battery cell will be one of the biggest challenges," said Maryssael.For Alkem's Barbier, this will lead to consumers being willing to pay some premium. "We hear a lot more requests for sustainability. I am not sure people are willing to pay for that today, but it will happen," he said.

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