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Felicity Bradstock

Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

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Europe Must Act Now To Secure Lithium Supply

  • The World Bank estimates that mineral production will need to increase dramatically over the next decades to achieve climate goals.
  • Last week, saw a number of interesting developments in Europe’s lithium industry, with France playing a major role in the region’s ‘white gold’ rush.
  • It has become clear global reliance on metals and minerals will soon become as significant as dependence on oil and gas.

Europe is hoping that lithium will be the answer to its fossil fuel addiction, as it gradually weans itself off oil and gas to switch to cleaner energy sources. Lithium is a vital ingredient in battery storage, which Europe has big plans to roll out in support of its growing renewable energy operations. But state powers and the EU must act now if they hope to gather enough lithium for a total transformation of the region’s energy industry. Providing enough lithium for Europe’s energy transition is no easy feat, as not much of the metal can be found on the European continent, forcing the EU to turn to other lithium-rich countries. Lithium can be used in batteries for a variety of electronics, from smartphones to televisions. It is also the driving source for electric vehicles (EVs) and renewable energy battery storage. The EU has targeted net-zero emissions from new cars by 2035. But with several European countries announcing a shift away from internal combustion engine (ICE) vehicles to EVs within the next decade, it is vital governments back up their aims with the materials needed to make this a reality. 

The World Bank estimates that mineral production will need to increase dramatically over the next decades to achieve climate goals, including an increase of 500 percent in graphite, lithium, and cobalt production by 2050. The EU region will require 18 times more lithium than it currently uses by 2030, and 60 times more by 2050, to meet net-zero aims. But this increase in production is not only complex because of the geographical logistics and need to boost mining activities but also due to the poor public perception of lithium mining. Many environmentalists and local communities are fearful of soil pollution and the destruction of natural habitats associated with mining. 

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 Portuguese Environment Minister Joao Matos Fernandes spoke at a 2021 conference about the matter, stating “Green mining must also be challenging such sentiments through the involvement of the local population in understanding the mutual benefits these projects could bring.” Peter Handley, head of the European Commission's raw materials unit supported this sentiment, stating that it was vital to demonstrate to the public that mining would be done “the right way, in full compliance with regulations". He added, "Mining in the past was a very dirty operation…. It is becoming highly technological these days.”

This week, there has been greater momentum in Europe’s lithium industry, with France playing a major role in the region’s ‘white gold’ rush. The French minerals company Imerys has announced that it plans to develop a major lithium extraction project to supply Europe with the lithium it needs to support its green energy transition. The proposed Emili Project is expected to be located in the centre of France, with hopes to deliver around 34,000 metric tonnes of lithium hydroxide annually from 2028. This level of production would provide enough lithium to power 700,000 EV batteries a year.

 The project demonstrates France’s ambition to reduce reliance on other parts of the world by increasing its national mining activities. Last month, European Commission President Ursula von der Leyen stated “lithium and rare earths will soon be more important than oil and gas,” demonstrating the significance of new mining projects. She also highlighted that China currently manages around 90 percent of the rare earths industry, with 60 percent of the world’s lithium production being processed in China. This is concerning for the European region that is attempting to reduce its dependence on Chinese energy and products.

Imerys is currently completing a ‘technical scoping study’ to assess the viability of the selected site for lithium mining. The land has already been used for kaolin clay production for over 100 years. The firm expects the construction of the project to cost around $980 million. Imerys released a statement explaining, “Upon successful completion, the project would contribute to the French and European Union’s energy transition ambitions.” It added, “It would also increase Europe’s industrial sovereignty at a time when car and battery manufacturers are heavily dependent on imported lithium, which is a key element in the energy transition.”

A boost in lithium production would also help alleviate price pressures, with the cost of lithium increasing seven-fold from May 2021 to May 2022, due to unprecedented battery demand. But while shifting lithium production away from famously lithium-rich countries to Europe may decrease reliance on other powers and provide greater energy security, it could also be costly. George Miller of Benchmark Mineral Intelligence explains, “It will be difficult to displace countries, including Australia, China and those within the Lithium Triangle, which have the current competitive advantage in lithium mining and processing due to lower labour, energy and reagent costs.” Meanwhile, to date, domestic production of lithium concentrates in Europe is insignificant in contrast to global output, at about 110 tonnes of lithium content, according to the EU’s study on critical raw materials

It has become clear global reliance on metals and minerals will soon become as significant as dependence on oil and gas, as countries around the world race to develop renewable energy and battery storage projects, as well as shifting away from ICE vehicles to EVs. But as this demand rises, so too will the need for lithium mining. Although regional developments, such as the Imerys Emili Project in France, will help boost the region’s lithium supply, a lack of lithium reserves in Europe will likely force the EU to look elsewhere to develop its mining activities, once again making it reliant on external powers for its energy security. 

By Felicity Bradstock for Oilprice.com

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