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Electric mobility metals inflection point

Mass adoption of EVs will require mass mining of new metals Metal Tech News – January 20, 2021

January 8, 2021 may go down in history as the inflection point for the transition from the fossil fuel powered vehicles that transported humanity through the 20th century to the electric vehicles that will carry us into the future. This tipping point for global transportation offers a spectrum of challenges and opportunities to sustainably mine, refine, and recycle the minerals and metals needed to build this electric mobility future.

Entering 2021, Tesla Inc. was celebrating the annual delivery of nearly half-a-million EVs to customers around the globe, and every major automaker on the planet was expanding their line-up of electrified models. On Jan. 8, however, General Motors took a leap that no other legacy automaker had yet to make – a complete rebranding around a comprehensive effort to accelerate mass adoption of electric vehicles.

"There are moments in history when everything changes. Inflection points. We believe such a point is upon us for the mass adoption of electric vehicles," said GM Global Chief Marketing Officer Deborah Wahl. "Unlike ever before, we have the solutions, capability, technology and scale to put everyone in an EV. Our new brand identity and campaign are designed to reflect this."

Further details of GM electric mobility initiative and rebranding can be read at GM embraces electric inflection point in the January 13 edition of Metal Tech News.

While GM has thrown down the gauntlet with its campaign aimed at putting everyone in an electric vehicle, they are not the only traditional automaker rapidly transitioning to an all-electric future.

Tesla delivered 499,550 vehicles to customers during 2020, accounting for roughly 17% of the nearly 3 million fully electric and hybrid vehicles sold last year.

Volkswagen, considered the frontrunner to overtake Tesla in EV sales, delivered 231,600 all-electric vehicles during 2020, more than triple the number sold in 2019.

BMW sold 192,646 fully electric and plug-in hybrid vehicles in 2020, nearly a 32% from the previous year.

Mercedes-Benz sold more than 160,000 plug-in hybrids and all-electric vehicles in 2020, an impressive 228% jump over 2019.

With more than 70 million vehicles sold each year, however, EV sales must increase by roughly 2,400% to transform GM's vision of getting everybody into an EV a reality. This considers total vehicle sales at 2020 levels and does not factor in the nearly 20% growth in vehicle sales in the coming decade.

Benchmark Mineral Intelligence forecasts EV sales to climb to 12 million units per year by 2025, before rocketing to 30 million by 2030 and 82 million by 2040. At this projected rate, EVs would overtake internal combustion vehicles by 2035.

Transforming this vision to a reality is also going to require a major inflection point for the battery supply chains needed to build the future of electrified mobility.

Under the EV hood

While on the surface EVs are made up of the same steel, aluminum, polymers, and other materials that are used to build standard petroleum-powered vehicles, the batteries that power them and the motors that drive them require mined materials that were not previously used at the massive scale needed for the electric mobility transition.

Lithium-ion batteries, which are the EV equivalent to an ICE gas tank, are driving massive new demand for lithium, cobalt, graphite, and nickel.

Benchmark, which is the global authority on lithium-ion battery supply chains, is tracking 186 battery manufacturing factories in the pipeline around the world with the capacity to produce 3.1 terawatt-hours of battery storage capacity per year by 2030, which is a 1,250% increase over 2020. By 2040, Benchmark expects the storage capacity of battery cells produced worldwide to increase by a staggering 4,200%.

While the demand for this amount of EV battery storage is being ascertained by the electric transformation of automakers, sourcing the raw materials to feed into the battery supply chains is less clear.

Caspar Rawles, the head of price assessment at Benchmark, told Metal Tech News that low minerals and metals prices has stifled investments into the mines that will supply the raw materials needed for lithium-ion batteries, especially lithium and cobalt.

"We see key battery raw material markets falling into deficit, most imminently cobalt, but (also) lithium, graphite, and nickel over the coming years," he penned in a Jan. 19 email.

In 2020, the World Bank forecast that the annual demand for battery materials such as graphite, lithium and cobalt could increase by nearly 500% over the coming three decades. While this projection is generalized and considered vastly conservative by lithium-ion battery insiders, it provides some insights into the enormous need for new supplies of raw battery materials.

Long runway

With mining projects typically taking two to four years to permit, and often significantly longer in the U.S., and two or more years to develop, the runway for bringing new supplies of minerals and metals into the battery market can be long.

Rawles said "it is a very real possibility" that the constrains on raw materials could limit the ability to expand battery supply chains.

Adding to the new demands EVs are putting on battery materials, the motors and electrical systems in these vehicles need significantly more rare earth elements and at least five times more copper than vehicles powered by combustion engines.

The copper needed for EV electrical systems, as well as the nickel that goes in the batteries, are abundant and already mined at an industrial scale to meet society's everyday demands. This, however, does not mean that the transition to EVs and renewable energy will not put major strains on global markets for these base metals.

World Bank estimates that the green energy transition will require roughly 550 million tons of copper over the next 25 years, which is about the same amount humankind has produced in the past 5,000, and lithium-ion batteries alone could require 2.3 million tons of nickel per year by 2050, which is more than the 2.1 million tons of global production during 2017.

While recycling will eventually fill large portions of this demand, initially it is going to take large-scale mining to feed EV markets with enough minerals and metals to prime this circular economy. As the first generations of electric vehicles and their batteries reach the end of their life then the recycled metals can begin supplementing supply, lessening the need for mining of battery metals and rare earths.

To ensure that the initial supply of the raw materials is available for the EV and renewable energy transition, Benchmark has encouraged policymakers in the U.S. and elsewhere to adopt policies and invest in mines-to-lithium-ion-batteries supply chains.

Read about Benchmark Mineral Intelligence Managing Director Simon Moores' testimony to the U.S. Senate Committee on Energy & Natural Resources at New Battery Deal idea floated to Congress in the July 1 edition of Metal Tech News.

Policies that encourage and streamline battery materials supply, while also ensuring they are sourced sustainably could help prevent a bottleneck and the front end of EV and renewable energy supply chains.

"Given that these markets are expected to fall into deficit and the political importance of battery minerals, nations should at least have a developed raw material strategy to ensure access to these minerals and protect any going economic concerns, for example domestic auto industry – but also to grow as a region for energy storage expertise and manufacturing," Rawles told Metal Tech News.

Author Bio

Shane Lasley, Metal Tech News

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With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.


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