Lithium: Australia needs to recycle and lease to be part of the boom

Lithium: Australia needs to recycle and lease to be part of the boom

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Australia has an opportunity to capitalise on the increasing global demand for lithium batteries by developing recycling systems and creating models for leasing the resource.

Lithium is used in Tesla Energy batteries for businesses and utility companies. Patrick Fallon/ Reuters
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The Conversation

Lithium is used in Tesla Energy batteries for businesses and utility companies. Patrick Fallon/ Reuters
Lithium is used in Tesla Energy batteries for businesses and utility companies. Patrick Fallon/ Reuters

Australia is pivoting its economy away from resources like coal and iron ore, but are there other commodities we can bank on to take up some of the slack? In this “future commodities” series we explore the economic future for commodities we’ve always relied on, and some we haven’t.

Australia has an opportunity to capitalise on the increasing global demand for lithium batteries by developing recycling systems and creating models for leasing the resource.

Lithium is the third element in the periodic table and the lightest classified as a metal. This makes it a good choice in battery applications needing lightweight energy storage. Lithium-ion batteries are now increasingly common in smartphones, electric vehicles and indeed Tesla powerwalls, the first of which was recently installed in Australia.

Because of this rising demand, Lithium is considered to be a “critical” mineral by many countries. Currently, global demand is over 32 thousand tonnes per year. This is predicted to rise to between 80 to 280 thousand tonnes by 2030, with a mid-range forecast shown in the figure below.

Projected lithium supply and demand by continent, Author provided

The variation in demand forecasts over the next 15 years depends on the rate of uptake of electric batteries for vehicles and storage. They are also foreseen to continue rising through to 2050 and beyond. However, new battery technologies which use metals other than lithium (for example zinc-air or zinc-bromine) can be expected to increase their market share.

New opportunities for innovation

In order to meet future demand, recycling of lithium will also need to rise significantly. A report by the International Resource Panel shows historical lithium recycling rates are at less than 1 percent. Current challenges to commercial recycling include limited volumes of waste batteries (as many are still in the useful phase of their life) and a lack of investment for piloting suitable recycling technologies.

However businesses and government must start planning now for collection and processing of this future waste stream, to ensure pathways are in place for reuse and recycling of what is a hazardous, yet valuable, waste. In particular, as lithium batteries rise past 50,000 tonnes per year in the waste stream by 2030, the need rises for developing efficient sorting systems to isolate these batteries and moderate the risk of fire.

Without the requisite infrastructure for local recycling, the valuable metals in batteries will not be recovered, yet environmental impacts rise both at home and abroad, as for other electronic waste.

Looking to the future, firms in Australia might also consider new business models such as leasing instead of selling lithium. This provides a mechanism for capturing value at multiple points along the supply chain (mining, battery manufacture, use, recycling) rather than relying on yesterday’s ‘dig-more sell-more’ model for national prosperity.

For example, by teaming up with battery manufacturers, Australian companies could be the first link in a green supply chain. This would involve mining lithium, processing it for use in batteries, leasing the lithium-in-batteries to users of power storage, then offering a collection chain for recycling.

In effect, this sells the access to lithium as a service, whilst promoting resource stewardship. Prime Minister Malcolm Turnbull suggested something similar for the uranium supply chain.

Who will supply lithium in future?

When asking ‘where will all the lithium come from?’, it’s important to bear in mind that not all sources of lithium are equivalent. Lithium generally comes from either hardrock mining, such as in Australia, or the evaporation of salt lakes (or brines), such as in Bolivia and Chile.

Due to the differences in chemistry, it is easier for lithium from brines to go into lithium-ion batteries and for that from hardrock to be used for glasses and other applications. Putting hardrock lithium into batteries requires a further conversion process which adds to costs.

Several Australia operations are active in this space, Talison Lithium mines hardrock lithium at Greenbushes and has outlined a concept for a local plant to process to ltihium carbonate for use in batteries and further research and development of conversion processes to bring down costs, this would improve Australia’s position in supplying global markets. Recent price rises in lithium have also prompted Western Australia’s Mt Cattlin mine to reopen.

While Australia was the largest producer in 2014, South America is the hub of future growth. Chile is banking on a future boom to strengthen the health of its mining sector which has until now been focused on copper and indeed has established a National Lithium Commission. Also in South America, Bolivia is sitting on huge salt flats containing lithium, but has not yet exploited them to any significant extent. In these emerging mineral economies in particular, as with many large resource development projects, social and environmental impacts must be carefully managed.

Source: The Conversation. Reproduced with permission.

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  1. juxx0r 5 years ago

    Well, that lacked a critical understanding of lithium mining and minerals. If i was a betting man i’d bet on Australian Spodumene producers ahead of S.American brines. The other week Pilbara minerals put out a PFS for 5kt of Li starting next year, that will be an extra 15% of world production, over the fence they have their mates at Altura snapping at their heels and then there’s Mt Cattlin about to commission and Mt Marion not far behind them.

    In the exploration space there’s plenty of old resources just waiting for reclassification as they were originally prospective for minerals like Cassiterite, Wolfram and ColTan, and they just need a bit more drilling to convert them to lithium resources. Lithium supply wont be an issue this century except for a few moments where there will be slight imbalances. Technological advancement of extractive metallurgy is bringing new production processes to the fore like Neometals Hydroxide route, Platypus’ and Lithium Australia’s Mica leaching, Lithium Australia’s Spodumene leaching technology and it’s Lithium Hydroxide process. All in all it’s an exciting space and bringing some life to the Pilbara and Goldfields in an otherwise depressed market.

    • A1 5 years ago

      good post.

      What do you think of the articles view that supply will be heavily constrained and that primary demand will largely be serviced by recycled Li? This is a mining/minerals processing question, and you seem to know that space.

      Sort of contrast this against the practically every battery manufacturer saying costs will plummet PV style in the coming years as scale emerges.

      The article *implies* that supply costs will increase due to supply capacity constraints (and added recylcing costs). Battery manufacturers thus have to battle this upward supply cost pressure and make even more gains in production efficiency.

      Can it be done? I am tiring of grand statements on cost predictions from the Lion battery sector without seeing any real rational basis for it other than theoretical first principles economics. Equally, if you know of anything in that area please definitely mention it.

      • juxx0r 5 years ago

        Just the ramp up of Orocobre, Mt Cattlin and Mt Marion will be enough to supply 1.5 gigafactories. All of this is happening this year. Next year, Pilgangoora, Pilgangoora 2 maybe the year after. Total of 5 gigafactories. They can build mines faster than they can build gigafactories given the capital. Right now the capital is there and a lot of the exploration is done.

        I think the price of Li2CO3 will go up, maybe long term prices might approach $10/kg, or $10/kWh in battery terms, but that wont last forever and new supply will bring it to about $7-8/kg in a stable market. That compares to a historical price of about $5-6/kg.

        Recycling of large scale batteries will occur, the rate will be most directly determined by the take up rate of initial electric vehicles and the lifetime of the batteries.

        • A1 5 years ago

          Awesome. I have some follow ups but will do my own research.

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