Sobering Thoughts on Battery Metals

I want to introduce a new biweekly column in which I am going to review and criticize particular recent and general contemporary analysis of the supply and demand of those natural resources that are accessible practically and economically for mankind’s use now and in the near term. My view of the necessity for particular natural resources is that of a utilitarian. For example the more than 200 nations of the U.N. produced an aggregate of about 1.7 billion tons of iron in the form of steel and its precursors in 2017. More than half of all of this steel was produced in the Peoples Republic of China. Tampering with the global supply of the continuous high concentration of ENERGY production required to produce steel is a huge mistake made by politicians, and its result will be and IS the concentration of the producing of the world’s most important finished good, steel, in the hands of those who understand energy economics as they relate to the production of natural resources.

The actual amounts of the natural resources that are now and can be produced within, say, 25 years, from existing mines and wells is very well known and purposefully measured as accurately as contemporary science and engineering can accomplish. These amounts are called “reserves.” The amounts of these same resources distributed on the earth’s surface are estimated by the academic community primarily and are known to geologists as the “resources” of the various chemical elements. Other than the obvious fact that reserves are a subset of resources they, the resources, are of little interest to miners. Only those resources that can be accessed and developed into producing mines are of importance to our global economy!

Most importantly, only those resources that can be developed economically into producing mines with strong reserves are important at all.

Yet we are inundated by jejune and not very perceptive “analysts” with endless predictions of the natural resources required for a technological change such as the electrification of the power trains of personal and freight transportation open road using vehicles, and we are encouraged to “invest” in the exploration for new locations of these natural resources without any thought for the actual state of the current production of those same resources and the TIME REQUIRED; the COSTS; and the AVAIILABILITY OF CAPITAL AND ITS ALLOCATION TO BRING ABOUT ADDITIONAL PRODUCTION FROM RESERVES MUCH LESS TO DEVELOP NEW SOURCES OF THE REQUIRED chemical elements.

My first detailed column on April 1, 2018 will cover the maximum production possible in today’s world of the metals necessary for the production of lithium ion batteries of sufficient capacity to propel a two-ton vehicle more than 200 miles on a single charge. This, the 200+ mile range, seems to be the metric required by Americans and wealthy Europeans who live in countries or groupings of them where long distance driving is a leisure activity.

The problematic battery material is cobalt. The reserves of cobalt today and the economics of expanding the existing mines in which cobalt presents as a minor companion metal dictate a strict upper limit to the amount of cobalt that can be produced annually in the near term and the reserve pictures of those mines indicate an exhaustion of the producible cobalt (even at current rates) within less than a generation. There is one remaining cobalt resource discovered in the last 50 years that could be developed with current technology and economics. This resource could produce an additional 40,000 tons of cobalt per year by the mid-2020s. I will detail this resource in my next article.

The lithium supply can be, and is being, expanded to meet the projected demand for battery use. Lithium production which was very small until just five years ago is rapidly expanding due to the addition to the traditional source, the hard rock mineral; spodumene being augmented in the last 25 years by the extraction of lithium from the immense brine deposits in South America. Unlike cobalt extraction and refining technology, which seems to have plateaued, lithium extraction, not only from brines, but from hard rock minerals and lithium rich clays is rapidly advancing technologically in the capability to extract more lithium at less cost from existing sources through innovative technologies.

Nickel and manganese are produced sufficiently and have sufficient reserves for the near future’s demand from vehicle electrification.

We will see that there simply is not and cannot be enough cobalt, if the current state of the art battery chemistry is required, to produce more than perhaps a third of the worlds requirements for the total electrification of personal motor vehicles if all of those vehicles must have a 200+ plus mileage range and on a single charge and weigh 2 tons.

However the majority of the world’s drivers do not need such range or weight. I think that the car makers will use non-cobalt or low cobalt technologies for city driving and for mass transportation in on the road vehicles (i.e., buses) and reserve the long range cobalt battery using vehicles for leisure and business driving markets, such as North America, and to a limited extent, China. I also believe that internal combustion engine using vehicles for personal use will be the majority of such vehicles produced well into the future.

Notwithstanding this the mass conversion of the world’s personal transportation to electric power can only be a temporary change unless total recycling of critical and scarce natural resources is universal. The immense waste of such resources is a mistake brought upon by neoliberal economics.

The key error of neoliberal economics is that although it recognizes the strategic and economic importance of a supply of natural resources that is ever increasing to meet the demands of the growing world economy its proponents do not understand that such resources are finite and that individual resource supplies are dictated by technological and geological factors equally as important as finance. The supply of a natural resource cannot simply be increased, or maintained, by throwing money at it; the neoliberal conceit that a supply problem (in natural resources) can be solved by simply raising the price is wrong.

The “cobalt conceit” will be my next article. Thanks for reading. Your comments are welcome.

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