The first question to ask about the lithium shortage is whether there is a shortage at all.
Lithium is an element that is at once everywhere and nowhere. Gather up a thimble of dirt in parts of western US states like Nevada, and chances are you’ll find a little of it there between your thumbs. But this does not make it easy to mine. Historically, the lithium industry has been relatively small, which makes it prone to whiplash between shortage and sudden glut when new sources are tapped. The success of a mine is all about timing, and with lithium, it is always hard to know what will come next.
But you can’t build an electric vehicle battery without it. On Thursday, the Biden administration said it would invoke the Defense Production Act in a bid to ensure that lithium supply comes from the US—along with other important battery minerals like graphite, nickel, cobalt, and manganese. The administration says dependence on foreign sources of those resources is a national security concern.
It’s a little strange, tying a collective, global problem like climate change to nationalistic competition. But green energy is tied up in long-held notions of energy independence—and sure enough, the announcement came in a package of initiatives that would also incentivize domestic oil and gas production in response to Russia’s war in Ukraine. It comes after a letter from a trio of Republican senators and Democrat Joe Manchin asked the president to invoke the Korean War-era law to open new mines more quickly. Disruptions in Russia’s nickel supply have already sent global prices skyrocketing—a blip, the senators warned, compared to the disruptions that would occur in a trade conflict with China, where much of the battery supply chain is located.
But the concerns are broader than the Ukraine war. In recent years, one boon to fighting climate change has been that the raw materials for electrifying vehicles and decarbonizing the power grid were getting cheaper every year. But now that’s changing. As demand for lithium and other battery minerals grows, prices are spiking. “We think it's going to postpone some of the rollout of electrification,” says Andrew Miller, chief operating officer of Benchmark Mineral Intelligence, which estimates that by 2040 the world will require 17 times more lithium than it currently produces to meet global climate goals. “There’s not enough lithium out there being produced.”
The formal White House plan is expected to be fairly modest—more carrot than stick. In theory, the war powers act could allow the president to force companies to start digging for lithium and other metals. (In the early days of the pandemic, former president Donald Trump used the law to direct automakers, including General Motors, to build ventilators, and later to increase the supply of masks.) But instead, the Biden administration is reportedly offering an investment vehicle—$750 million to expand existing mine operations and conduct feasibility studies, according to Bloomberg.
Most PopularThe End of Airbnb in New YorkBusiness
Conservation groups, which have asked the administration to use the DPA to hasten other green energy projects, like building more renewable energy sources, heat pumps, and public transit, had feared a more forceful mining-focused rule would hasten permitting of projects that have been stymied by conflicts over ecological issues and local opposition—an idea that was repeatedly endorsed at a Thursday morning Senate hearing on critical minerals. The more modest step reflects a challenge for the White House over how to transition to domestic sources for electric vehicle materials while also pushing to make mining more sustainable and equitable for local people, says Thea Riofrancos, a political scientist at Providence College who studies the lithium industry. That’s not an easy task. “They want to square a circle,” she says.
The best places to look for lithium are areas where natural forces concentrate the element, such as in hard rocks in western Australia and in brines in South America’s Salar de Atacama. Together, those two highly productive zones were once enough to produce most of the world’s lithium. But no longer. The problem is that the world hasn’t invested in expanding lithium production beyond those places, Miller says. Prior crashes due to oversupply left everyone feeling burned, so the industry failed to invest before the current surge in demand for electric cars. “Even if you look at the next wave of producers, nothing is happening at scale this year or even next year,” he says. In recent years, the result has been fierce competition for control over existing mines. Chinese firms are the dominant players—which makes a lot of sense, he notes, because China is where much of the material is also processed, and where factories make EV battery cells.
The US is trying to cultivate that broader supply chain at home, but it’s particularly slow going for “upstream” parts of the battery industry—those closest to the raw materials, like mining and materials processing, as well as factories that make components like cathodes. There’s just one active mine in the US, a small operation in Nevada, and new projects have been slow to get off the ground. The mining of a major deposit at Thacker Pass in northern Nevada has been delayed by concerns over environmental degradation and opposition from indigenous groups who have protested the destruction of ancestral lands. A proposed mine at Rhyolite Ridge in central Nevada has been tied up in a conflict over a rare wildflower, Tiehm’s buckwheat, which was recently proposed as an endangered species by the US Fish and Wildlife Service. Elsewhere, most mines are still in earlier stages of development and face questions over technical feasibility. Brine operations on the shore of California’s Salton Sea and in Arkansas’s Smackover region involve extraction technologies that haven’t yet been proven affordable.
For those types of riskier projects, government money could make a difference. “When you speak to these companies about what they want from the government side of things, financing is a great thing,” Miller says. Still, $750 million isn’t a lot in “build-a-giant-mine” terms. “You’d want more like $750 million per mine,” says Alex Grant, an analyst who studies lithium mining at Jade Cove Partners. The administration reportedly wants Congress to tackle the task of allocating more money.
Most PopularThe End of Airbnb in New YorkBusiness
The expansion of domestic mining is partially at odds with Biden’s other priorities. The government has recently handed victories to opponents of mining projects, including the cancellation of leases for a copper-nickel operation near the Boundary Waters of northern Minnesota, and a delay of a copper mine in Arizona after protests by indigenous groups. The administration has also said it wants to introduce reforms to the 1872 Mining Law, a relic of the nation’s era of westward expansion that fails to adequately consider the rights of indigenous groups or environmental concerns. That effort has drawn the ire of mining interests that argue changes to the law will tack on more delays.
But there are limits to trying to mine more sustainably. “I don't think this is solvable at the level of mining,” says Riofrancos. “It's not enough.” She notes that other governments, like the European Union, have been more forceful on other aspects of resource gathering, such as proposed battery recycling standards that would recover raw materials without new mining. (In the US, California legislators are discussing similar rules.) Better yet, a long-term solution would be to find ways to reduce dependence on those minerals, she says, like funding for electrified public transit and other programs that reduce demand for personal cars, whether or not they’re gas-burning. After all, sky-high projections for materials like lithium are based on replicating car culture as it exists now. “If we really see this as an issue of national security, then the natural thing to do is look at how we can conserve this resource,” she says. “The most absurd way to use a limited resource is to build a bunch of e-SUVs.”
But it will take time for those types of initiatives to make a significant dent in lithium demand. In the meantime, Miller expects the crunch to get worse before it gets better, as the prices that automakers actually pay in long-term contracts for lithium creep upwards. That’s already happening in China, where contracts are often shorter and therefore better reflect recent price hikes, potentially jeopardizing the country’s speedy adoption of cheap electric cars. Miller expects that those eventual price increases in the US could be large—on the order of thousands of dollars per car, simply on the basis of rising lithium prices. That’s not even not factoring in the rising costs of everything else that goes into a battery. “Even if you can solve the lithium part of this equation, it's not long before you run into other issues with nickel and cobalt,” Miller says. “It's going to be a bumpy road.”
More Great WIRED Stories📩 The latest on tech, science, and more: Get our newsletters!It’s like GPT-3 but for code—fun, fast, and full of flawsYou (and the planet) really need a heat pumpCan an online course help Big Tech find its soul?iPod modders give the music player new lifeNFTs don’t work the way you might think they do👁️ Explore AI like never before with our new database🏃🏽♀️ Want the best tools to get healthy? Check out our Gear team’s picks for the best fitness trackers, running gear (including shoes and socks), and best headphones