Mining’s problems are now the world’s problems, as lithium scale-up issues show

Lithium prices continue to hold near historic highs, even in the face of an anticipated global recession. Spot prices for both lithium carbonate and hydroxide are now hovering around US$70,000 per tonne, and prices are expected to remain high through 2024 or longer.  

In an early October report, Bank of America analysts forecast demand for the energy metal will grow by 20% on a compound annual basis between 2021 and 2030, from 700,000 tonnes of lithium carbonate equivalent (LCE) last year to 2.7 million tonnes in 2030. That level of growth will require 50 new mines producing an average of 40,000 tonnes of LCE, BofA estimates. 

But there’s a problem. Ironically, while it is climate concerns that are driving demand for lithium higher through the EV revolution, environmental issues are also limiting supplies.  

Lithium production simply can’t be scaled up to meet the level of expected future demand without new technology that reduces its environmental impact.  

Permitting delays and long development timelines are already big barriers to new supply — but growing opposition to projects is compounding the problem. 

In an August report, Fitch Solutions analysts noted a “sharp uptick” in community opposition to brine-based lithium projects in Latin America. 

Much of global lithium production comes from brine operations, which concentrate the critical mineral by relying on evaporation of water from brine pumped to surface. In spite of their large footprint (brine production occupies over 3,100 sq. metres of land per tonne of lithium hydroxide produced vs. hard rock operations at 464 sq. metres per tonne) only about 50% of the precious white metal is typically recovered from brines. (On the other hand, hard rock operations emit three times the greenhouse gases of brines.) 

Opposition to brine operations is linked largely to competition for water. 

Chile, the world’s number two lithium producer, has endured 13 years of drought, putting lithium companies SQM and Albemarle on a collision course with other water users. Their operations, located in salt flats in the Atacama Desert, have come under increasing scrutiny for their use of scarce groundwater.  

SQM got into trouble in 2016 for pumping more brine than its permits allowed and has had to redraft its environmental compliance plans. Since then, the company has committed to using less fresh water and building a desalination plant so it can use seawater, and to reducing the amount of brine it pumps by 50% (compared with 2019 levels) by 2030. SQM, which wants to be recognized as a “green” company by 2030, is spending US$1.5 billion to reduce its water use. 

But it’s not just brine projects that have proven contentious. 

Thacker Pass, an open pit clay lithium project in Nevada, also faces stiff opposition on environmental grounds, including for its planned use of groundwater. A coalition of Native American tribes, environmental groups, and a local rancher, have challenged the project’s approval by the Bureau of Land Management under former president Donald Trump’s administration. The appeal is scheduled to be heard by a federal court early next year. 

And Rio Tinto’s Jadar project in Serbia — despite being an underground mine rather than a brine or open pit operation — also attracted protests. As a result, the government revoked Jadar’s permits in January this year. If developed, the US$2.4-billion project would produce close to 60,000 tonnes LCE annually over a 40-year mine life. 

As the green credentials of lithium projects are crucial to end users and the viability of the growing EV market, the mining sector is finding allies to help make lithium production more sustainable. Automakers, battery makers and governments are just as motivated to find solutions — undoubtedly a requirement for the world’s decarbonization efforts — to lithium’s environmental footprint. 

For example, in 2021, SQM and partners in the battery and auto sectors established the Responsible Lithium Partnership to invest in studies to quantify the impact of lithium mining on groundwater in the Atacama. 

Analysts are looking to direct lithium extraction (DLE) — which has also attracted support from governments and end users in the battery chain — as a potential gamechanger. The technology, which has the potential for 90% recoveries, is already being used commercially in combination with evaporation at Livent’s Fenix operation in Argentina, as well as several projects in China, according to a recent report by Red Cloud Securities. It also is being tested for use in geothermal brine projects in California and Europe, by E3 Lithium at its petrobrine project in Alberta; and at Rio Tinto’s recently acquired Rincon brine project in Argentina.  

DLE from geothermal brines has raised hopes for their potential for extremely low-impact lithium production, although Berkshire Hathaway has reportedly encountered technical obstacles in its efforts to produce lithium from one such project as part of its geothermal energy infrastructure in California’s Salton Sea. 

While BofA analysts note that DLE is not a new technology, they acknowledge it is still in its “relative infancy.”  

“No two brines are the same, and brine composition can even vary across a specific resource. This creates complications in DLE technology selection and deployment, often overcome by significant process flow tinkering and demonstration production hours,” they wrote in an October report.  

Despite the challenges, the near-term should be very exciting as the innovative solutions that will square the circle of sustainable lithium emerge.