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#TM1- Technology Minerals

Clean Energy Metals – Dealing with the Supply Squeeze

Critical window of opportunity to create a circular ecosystem for battery metals

The failure of national governments to reach a major agreement at the COP27 Summit this year underlined the difficulty and urgency in reaching net zero. The lack of progress from the governmental side means that it falls to the private sector to provide meaningful solutions. Resource efficiency, energy, and mobility transition are crucial strategies to mitigate climate change. The focus is on reducing the consumption of resources, especially energy and raw materials.

While raw materials are the basis of our material world, their excessive consumption over recent decades has also contributed significantly to climate change. However, raw materials, and, in this case, especially metals, play a key enabling role for climate protection technologies, such as electro mobility, the hydrogen economy, and solar and wind power plants, and also for digitalisation. It is now vital to make the use of raw materials much more resource-efficient and to use them as purposefully as possible.

Source: https://link.springer.com/article/10.1007/s13563-022-00319-1

Source: https://www.alliedmarketresearch.com/battery-recycling-market

There is overwhelming evidence to show that advanced circular economy systems and sophisticated recycling technologies can build the backbone for the development of a resource efficient and sustainable society. Closed metal cycles are a key part of this equation, securing relevant parts of the raw material supply for high-tech products and reducing CO₂ emissions in their production at the same time.

Many mineral-producing countries that supply critical minerals are politically unstable, making them risky to invest in and to rely on as a source. This underscores the importance of developing sources of domestic supply, which offers greater political stability, greater safety for workers, and can provide a pipeline of young talent. These provide a foundation for the sector to build innovative solutions in response to the demands of the green transition.

The sources of many critical minerals for energy use are much less diversified than for hydrocarbons and sometimes concentrated in geographies that are highly problematic from an environmental and social perspective, such the Congo. The Congo accounts for almost 80% of the global supply of cobalt, much of which comes from so called ‘artisanal mining’ with its attendant exploitative labour conditions and environmental degradation.

The Delivery Challenge

To deliver on the green revolution and minimise emissions that contribute to climate change, industries will need access to significant quantities of critical minerals.

If you can’t make it or grow it, you have to mine it, so there will be an inevitable growth in the mining of critical raw materials, such as lithium-containing minerals. Source: https://britishlithium.co.uk/lithium-market/

Source: https://www.alliedmarketresearch.com/battery-recycling-market

The production of lithium in 2030 will need to be 60 times the market size of 2015, if production of the internal combustion engine becomes a reality within the 2030 to 2035 timescale. Electric vehicles are the primary driver of lithium demand and given lithium’s unique properties of light weight and high energy storage potential, it is highly likely to remain the material of choice in non-stationary batteries, whether in wet electrolyte or solid-state form.

The sustainable supply of the battery metals cobalt, nickel, lithium, manganese, and copper is a decisive factor for the success of electro mobility. Given the current global availability of resources and the imminent tsunamic surge in demand to sustain surging production levels recycling and reuse of batteries represents an increasingly important component of the future raw material supply. An effective circular economy for batteries can only be achieved if—in contrast to the current situation with many consumer goods — spent batteries can be fed into a comprehensive, technically advanced recycling network to re-enter the supply chain.

Source: https://www.alliedmarketresearch.com/battery-recycling-market

A London listed company Technology Minerals (LON: TM1) is seeking to meet these challenges head on. Billed as the UK’s first stock market listed ‘circular economy’ company, Technology Minerals combines a fast-growing lead acid and lithium-ion battery recycling network through its wholly owned subsidiary Recyclus Group with a series of battery metal mining projects sited strategically around the globe. Technology Minerals Chairman Robin Brundle explains: “The strategy of Technology Minerals is to build out its IP protected battery processing capacity in Europe while evaluating its portfolio of early-stage critical minerals projects. The current European market for Li-ion and lead-acid batteries totals 1.2mte pa of which some 72% are lead-acid and of which the automotive market consumes 70%. Within automotive, Li-ion currently accounts for just 10% but that is set to grow exponentially in line with increased EV penetration.”

The global recycling batteries market size was valued at $11.1 billion in 2020 and is expected to reach to $66.6 billion by 2030.

While EVs don’t emit CO2, lithium-ion batteries are made from raw materials, including lithium, cobalt, and nickel. With the coming supply squeeze, the mining of many of these materials can also raise ethical and environmental concerns.

Currently, there are very few lithium-ion battery recycling centres, due in part to lithium-ion batteries being both costly and difficult to recycle. According to some estimates, the current recycle rate is less than 5%. According to a recent Wired article, “While you can re-use most parts in EVs, the batteries aren’t designed to be recycled or reused.” And if the batteries are disposed into landfill sites, the battery metals can contaminate both water and soil.

Source: https://www.alliedmarketresearch.com/battery-recycling-market

The Size of the Problem

• Global stock of electric vehicles (EVs) could reach 245 million units by 2030, according to the International Energy Agency.
• While EVs emit less CO2, their batteries are tough to recycle.
• Ming cobalt, lithium, and nickel can raise ethical and environmental concerns.
• Creating a circular supply chain by recycling the batteries’ raw materials will be vital in reducing their environmental impact.

Source: https://www.weforum.org/agenda/2021/05/electric-vehicle-battery-recycling-circular-economy/

Lithium-ion batteries are also used for 90% of grid energy storage around the world, especially for wind and solar energy. Initiatives such as the EU’s plan to reduce its dependence on Russian natural gas by two-thirds, which relies in part on accelerated generation of renewable energy, will significantly increase demand for battery storage.

Source: https://www.bcg.com/publications/2022/the-lithium-supply-crunch-doesnt-have-to-stall-electric-cars

The sustainable supply of battery metals such as lithium, cobalt, nickel, manganese, and copper is a decisive factor for the success of electro mobility and clean technologies. The current targets set by governments at home and abroad for the switch to EVs and clean technology leaves recycling and reuse of batteries as the only practical step available to meet demand based on current forecasts for sourcing new battery metal production hubs. This circular economy for batteries can only be realised if—in contrast to the current situation with many consumer goods—there is a global network to collect spent batteries allied to large scale, high-quality recycling facilities.

Does the UK offer practical battery metal / clean-tech project opportunities?

Accelerating the shift to zero-emission vehicles is a key element if the 68% reduction in carbon emissions targeted by the Government by 2030 is to be achieved. The UK’s EV market is growing rapidly, with EV registrations increasing by approximately 173% from 2019 to 2020.

Current projections state that approximately 1.4 million EV battery packs will be coming to the end of their “useful life” every year by 2040. This roughly equates to 203,000 tons of batteries for recycling annually (based on a 60% recycling rate) at that point.

The UK currently lacks industrial capacity for lithium-ion battery recycling, resulting in the current costly reliance on mainland Europe when supplying batteries for material recovery after their useful life. With the average value of materials contained in an end-of-life automotive pack in 2018 being £1,200 for Battery Electric Vehicles (BEVs) and £260 for Plug-in Hybrid Electric Vehicles (PHEVs), there is a huge opportunity in the UK to recycle lithium-ion batteries.

Source: https://hvm.catapult.org.uk/news/automotive-battery-recycling-an-opportunity-the-uk-cant-afford-to-miss/#

Technology Minerals Chairman Robin Brundle comments; “The automotive sector is doing its part to pivot to all-electric, but it needs an effective and competitive ecosystem that will be largely self-sustaining, with job creation, skillset expansion and support for COP27 goals, both domestically and abroad, coming to the fore. This way, our automotive industry will continue to advance our extraordinary UK R&D and engineering skillsets so that they are fit for purpose well into the next sustainable decade.  Recycling is forecast to only be able to provide 22% of the supply that’s needed to power the transition. 78% will need to be extracted or brought in from elsewhere and each continent is facing this challenge – with many places creating barriers to export.”

Right Under Our Feet?

The UK has a rich history of mining, yet exploration and mine development have been neglected since WWII, with no new metalliferous mine being successfully built for 45 years.

Large-scale mining and modern processing can extract minerals that were not previously economic, safely, and with improved protection of the environment and community. New deposits could be found near old, narrow-veined, high-grade mines or in unexplored areas. Modern environmental controls, surveys, management, and remediation techniques can ensure that mineral production limits environment impact.

Technology Minerals Chairman Robin Brundle points out that the markets are very much aware that recycling alone will not generate sufficient raw materials and believes an ethical mining programme is critical: “We were once a prolific mining nation and those mines are still there – dormant, but in 2022, many appear to be economic once again due to the advancement in technology and commodity prices.”

Some steps have already been taken in this direction. After listing on London’s AIM market, Cornish Lithium #CUSN has assembled a large portfolio of mineral rights in Cornwall and has begun exploration for lithium-rich geothermal fluids.

Gigafactory Investment is Coming to the UK

There is progress in at least one area of the electro mobility and clean-tech supply chain: the British government is in talks with several companies to build gigafactories in the UK. Envision AESC has announced a new gigafactory next to its facility in Sunderland, while AMTE Power has also announced plans for a megafactory in Dundee. Further gigafactory and several supply chain announcements are expected in the coming months.
These developments are vital in maintaining a strong and prosperous automotive industry in the UK. On top of the global challenges from the COVID-19 pandemic, the war in Ukraine, and the rising costs of living, the challenges facing the UK automotive industry are very real and specific. 

“We all need not one but several gigafactories in the UK,” said Brundle. “Not having the ability to create batteries at home puts the future of the UK automotive sector in jeopardy—and the 823,000 direct and indirect jobs that go with it.  We need to secure more lithium for the UK and Europe, to create a flexible, sustainable supply chain that could also include developing domestic sources of key battery metals.”

How the Macro Backdrop and Supply Squeeze Will Make Recycling Increasingly Important

The Committee for Climate Change has suggested that 50% of new car and van sales would be battery electric or plug-in hybrid by 2035. Bringing forward deadlines for zero emission vehicles means we are now looking at 100% of new cars and vans being zero emission at the tailpipe by 2035.

The supply crunch will not hit immediately. Even though the price of lithium has surged more than tenfold over the past two years, there’s enough capacity to meet anticipated demand until around 2025—and potentially through 2030 if enough recycling operations come online. After that, chronic shortages are expected. Even assuming that all the new lithium-mining projects that the industry currently regards as probable or possible resources go into operation, as well as a significant expansion of lithium-recycling projects, lithium supply in 2030 is expected to fall around 4% short of projected demand, or by around 100,000 metric tons of lithium carbonate equivalent (the processed form of raw lithium). By 2035, that supply gap is projected to be acute—at least 1.1 million metric tons, or 24% less than demand.

Source: https://www.bcg.com/publications/2022/the-lithium-supply-crunch-doesnt-have-to-stall-electric-cars

It is more vital than ever that metals are recycled responsibly and effectively. This will:

• Contribute to the conservation of raw materials, complementing the primary supply of important and partially critical metals for our society.
• Significantly improve supply security, especially for many technology metals which currently are imported from outside Europe. Many metal imports derive from regions with higher geopolitical risks, hence making the European economy vulnerable to supply disruptions. Exploiting the European “urban mine” built from our end-of-life (EoL) products, infrastructure, and other residue streams reduces import dependence, improves the resilience of crucial value chains, and hence supports economic activities and jobs in Europe. The need for more supply chain resilience has become even more obvious in the context of the Covid-19 pandemic and the Ukraine war.
• Contribute to cushion volatile metal prices as the additional supply of recycled metals can help to overcome demand–supply imbalances and increases the number of metal sources beyond the primary producers.
• Reduce the CO₂ footprint and overall environmental impact of raw materials supply. If taking place in state-of-the-art recycling facilities, in most cases the energy efficiency (per kg of metal) is better and the impact on water, air, soil, and biosphere is considerably lower than in mining operations. The main reason for this is that the metal concentration in most products is much higher than in geological deposits.
• Be one pillar of responsible sourcing by providing transparent and clean supply chains.
• Protect the environment as non-recycling or landfilling of end-of-life products, such as batteries, can emit hazardous substances.

How the Technology Minerals #TM1 Blueprint for Lithium-ion and Lead-acid Battery Recycling Will Be a Vital Part of the Supply Chain

The battery recycling market is growing at an accelerated rate, driven by automotive and industrial sectors transitioning to more environmentally friendly and sustainable electric solutions. The UK needs industrial-scale battery recycling technologies. There is currently no major UK capability to recycle lithium-ion batteries. Technology Minerals’ plants in Tipton and Wolverhampton aim to provide a national capability to recycle lead-acid and lithium-ion batteries. As a first-mover in the battery recycling sector, the company expects to open 10 plants over the next six years, with its innovative IP in the lithium-ion sector a driving factor in the expansion strategy.

Technology Minerals has developed a unique frontend process that can safely break open Li-ion batteries which are not suitable for repurposing, to recover the battery mineral rich ‘black mass’ they contain as well as other battery components. This is the only process currently capable of handling all five li-ion battery compositions simultaneously on an industrial scale. The solution is also modular and can be easily built on-site at OEMs, minimising transportation costs.Technology Minerals has also developed a significantly improved process to recover the lead from end-of-life lead-acid batteries as well as recovering the acid for re-use as electrolyte or for the manufacture of fertiliser or gypsum, subject to the preferred economics.

Conclusion

As the world races to decarbonise, industry needs a secure source of critical minerals to fuel the transition. Brundle said, “The only ways this can be achieved is creating new mines, opening old mines, and building a secondary source of supply through recycling.”

It is necessary to dramatically escalate new production of battery metals to allow industry to make the green switch. This must be coupled with the implementation of a circular ecosystem so that each mineral mined is used to its full potential. The urgency and scale of the transition means that nothing less than a maximal approach will suffice.

On the strategic level, there are two temporal considerations. Brundle explained, “We have a very narrow window of opportunity so there is a necessity to take action to avert the incoming supply crunch in the short-term, but there is also a longer-term need to create a sustainable, circular ecosystem for battery metals.” Urgent action is required to avoid the immediate shortfall of supply, but there is also a wider structural shift to circularity needed to ensure a decarbonised economy can continue to grow sustainably.