How a handful of metals could determine the future of electric cars: NPR


A worker assembles Volkswagen electric cars at the company’s factory in Zwickau, Germany, on January 27. Automakers like Volkswagen are racing to get enough metals to power the batteries needed to make electric vehicles.

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A worker assembles Volkswagen electric cars at the company’s factory in Zwickau, Germany, on January 27. Automakers like Volkswagen are racing to get enough metals to power the batteries needed to make electric vehicles.

Jens Schlueter/Getty Images

As automakers rush to go electric, a big problem lurks underground.

Companies are betting hundreds of billions of dollars on electric cars and trucks. To craft them, they will need a lot of batteries. And that means they need a lot of minerals, like lithium, cobalt, and nickel, to be mined from the earth.

These minerals are not particularly rare, but production must increase massively – at an unprecedented rate – to meet the ambitions of the automotive industry.

And there is another big challenge: the existing supply chain is dominated by one country: China.

“China controls just about all the metals needed,” says Kwasi Ampofo, head of metals and mining at research firm BloombergNEF.

It’s not just profits at stake. Climate experts say the world needs to phase out gas-powered vehicles quickly to limit the worst effects of climate change.

The urgent need to access these minerals is causing industries and governments to rethink their entire approach to supply chains.

How a handful of metals could determine the future of the electric car industry

China’s dominance raises major geopolitical concerns

Beijing controls about three-quarters of the market for battery-critical minerals.

It is not that China won the geological lottery and happened to have very rich deposits of these minerals. In fact, the richest deposits are found in places like the Democratic Republic of Congo, Australia, and Chile.

But China intentionally set itself to dominate the Processing of these minerals, as part of a project to become a major player in electric vehicles.

Beijing had the authoritarian power, the money, the massive market, and the will to make it happen. And it worked – much to the chagrin of the West.

“We like to say we’re competing with China, but that borders on conflict,” says Mary Lovely, senior fellow at the Peterson Institute for International Economics.

Meanwhile, the war in Ukraine has created a new kind of anxiety. Russia, although a much smaller player than China in these supply chains, supplies a significant amount of nickel to world markets, which has driven up ore prices since the invasion began.

A rock of Zinnwaldite, a silicate mineral that contains lithium, from a mine near Altenberg, Germany, is shown December 13, 2017.

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A rock of Zinnwaldite, a silicate mineral that contains lithium, from a mine near Altenberg, Germany, is shown December 13, 2017.

Sean Gallup/Getty Images

The United States wants to reduce its dependence on China

Worried about future access to battery minerals, the Biden administration and other governments around the world are trying to strengthen their domestic supply chains to reduce their reliance on China.

Congress has appropriated $3 billion to support battery mineral mining and processing in the United States. Companies are racing to get projects off the ground – or rather, into the ground.

But in the United States, many communities are understandably reluctant to allow a new mine or refinery to open.

Trent Mell is the CEO of Electra, a cobalt processing company in Canada. He points out that Idaho has significant cobalt deposits, mostly on US Forest Service land. It’s not easy to get permission to mine there.

“I’ve been a miner for 20 years,” Mell says. “America is one of the best places in the world to mine, but one of the hardest places in the Western world to license.”

And even a successful effort to launch new mining and refining capabilities will take time.

“China saw the vision 10 years ago, and then it took…nearly a decade for the fruits to start bearing,” Ampofo says. “There is no short-term solution here.”

How a handful of metals could determine the future of the electric car industry

The automotive industry is rethinking its supply chains

Meanwhile, automakers aren’t just concerned about geopolitical risks to their current supply chain. They are also deeply worried about the sheer volume of minerals they will need.

The demand for certain mining products could be multiplied by ten in a few years.

“You can’t just walk in and secure the supply because it doesn’t exist for the future. It has to be built,” says Eric Norris, president of the lithium business at Albermarle Corporation, an American company. which is a major producer of lithium.

So companies like General Motors, Volkswagen and BMW are taking the highly unusual step of buying minerals directly from mines – and in some cases even investing in them, to ensure they have the resources they need. need to develop.

This is a major change for automakers who typically rely on a network of suppliers who deliver the parts and components they need exactly when they need them. It’s like buying ice cream at the store today, because you want it now.

Developing their own direct supply of minerals, on the other hand, is like calling a farmer to reserve a cow so you can have milk for ice cream next year.

Tesla, the revolutionary electric automaker, has been calling the mines straight for years.

“It was about survival,” says Vivas Kumar, who previously worked at Tesla for battery materials sourcing and now runs a battery component startup.

Now other automakers see it the same way.

Brine pools from a lithium mine owned by U.S. Albemarle Corporation are seen in the Atacama Desert, Chile, August 16, 2018. Mines like these are the start of a supply chain world for battery materials which has become critically important as electric vehicles gain popularity.

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Brine pools from a lithium mine owned by U.S. Albemarle Corporation are seen in the Atacama Desert, Chile, August 16, 2018. Mines like these are the start of a supply chain world for battery materials which has become critically important as electric vehicles gain popularity.

Ivan Alvarado/Reuters

The global mining industry could also be affected

The drive to secure minerals for batteries could have ramifications beyond the automotive industry.

On the one hand, it could put pressure on the mining industry to improve its practices. The industry’s checkered history includes the use of child labor in Congo’s cobalt mines and pollution and fatalities in mines and refineries around the world.

When a mine sells its products in a long and convoluted supply chain, an individual mine is essentially immune to boycotts or public pressure.

Automakers, on the other hand, care about a parcel what the public thinks of them – and especially what they think of their eco-responsible electric vehicles. This means that agreements made directly between automakers and mines come with pressure to avoid disasters and abuses.

“When the auto industry came along, it changed everything,” says Aimee Boulanger, executive director of the Initiative for Responsible Mining Assurance.

She says mines that have shrugged off other buyers’ ethical concerns are paying heed to automakers’ demands, due to the staggering amounts of minerals global automakers are about to buy. This is no substitute for proper regulation, she says, but it is already having an impact.

Can automakers get it right?

For automakers, meanwhile, the stakes couldn’t be higher as they race to get the minerals they’ll need to pivot to an electric future.

The shortage of semiconductors that has interrupted production lines around the world shows how essential it is for automakers to manage their supply chains well.

Scott Keogh, CEO of Volkswagen of America, calls scaling up the battery supply chain a “high-flying act.”

But Keogh is confident.

“You have some of the biggest capital in the world, some of the best mines in the world, all the big governments and big industries that are tackling this problem on all fronts,” he says. “I have a lot of confidence that we can solve it.”

They must.

In eight years, he expects half of VW’s production to be battery-powered vehicles.

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