Daily Update: November 1, 2024

The global automotive landscape’s shift toward electrification is driving increasing battery demand. The number of battery electric vehicles in operation globally will reach 171 million units by 2032, according to S&P Global Mobility. Battery producers face increasing pressure to secure cost-effective raw materials, especially lithium. Beyond EVs and battery storage, these materials also support clean energy from geothermal, wind and solar to electrical networks.

S&P Global Market Intelligence saw budgets for exploring new nickel, lithium and cobalt mining sites increase to $1.6 billion in 2023 from about $319.5 million in 2016.

Mining these deposits can damage biodiversity and ecosystems. S&P Global Sustainable1 found that 71% of operational and under-development mines and exploration sites are in key biodiverse areas that need to be preserved. Mining lithium presents unique environmental challenges as it requires a lot of land and large volumes of water, and it can result in groundwater pollution. Countries with lithium mines include Canada, the US, Australia and China.

“When you look at lithium, at least lithium used for batteries and electric vehicles, China accounts for this year, per our forecast, nearly 60% of demand,” Nick Trickett, senior analyst for metals and mining at S&P Global Commodity Insights, said on the “EnergyCents” podcast. “What China's really, really good at is pushing miners and its manufacturers to basically keep expanding capacity no matter where the market is in terms of price.”

Graphite, used in battery anodes, is mined from open pits or underground mines. It can also be produced synthetically by heating oil byproducts such as calcined petroleum coke to at least 3,000 degrees C in furnaces often powered by coal. Recycled lithium may prove much more sustainable. 

S&P Global Mobility estimates that by 2032, about 900 GWh of end-of-life batteries — or enough for 12 million EVs — will be available for recycling. End-of-life rechargeable batteries, or even used batteries, can be collected, dismantled and shredded to produce so-called black mass, from which metals such as lithium, nickel, cobalt and manganese can be extracted

S&P Global Mobility forecasts that China's end-of-life battery availability will surge to 438 GWh by 2032 from 16 GWh in 2023— a compound annual growth rate of 44%. End-of-life batteries from Japan and South Korea will provide 57 GWh by 2032.

To support price transparency in this emerging supply chain, S&P Global Commodity Insights has introduced price assessments of recycled lithium carbonate delivered duty-paid in China and cost, insurance and freight to North Asia. These follow daily black mass price assessments launched in 2023 for China, Europe and the US.

Adding pressure is last year’s EU Battery Regulation, which will require new battery production to include at least 6% recycled lithium and nickel, 16% cobalt and 85% for lead beginning August 2031.

Investments in recycling infrastructure are underway. The UK's first lithium-ion battery recycling facility, operated by Recyclus Group, has received a permit to process up to 22,000 metric tons of batteries per year. By 2027, the company aims to launch four more recycling plants, with a combined capacity of 41,500 tons per year. Its Wolverhampton plant boasts a 90% recovery rate in processing five key battery chemistries as feedstock for black mass derived from used handheld devices, electric bikes, cars, trains and forklifts. 

However, there are concerns over price. During a panel discussion at the International Congress for Battery Recycling in Basel, Switzerland, AMG Lithium project manager Claas Hoffend said the key question was whether carmakers were willing to pay a premium for recycled material: “If the recycling capacity is not here by 2031, then what do we do?"

Today is Friday, November 1, 2024, and here is today’s essential intelligence.