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U.S. Unveils Ambitious Plans to Boost Domestic Lithium Production

The U.S. has big plans for lithium production in the coming years as it ramps up output to support the rollout of utility-scale battery storage and greater electric vehicle (EV) uptake. To ensure the U.S. has enough lithium to support the rapid growth of the battery market and reduce reliance on China, President Biden is supporting the development of the country's lithium industry with funding from the Inflation Reduction Act (IRA) and other national policies. Meanwhile, the private sector is investing heavily in lithium as the consumer uptake of EVs continues to grow year on year. 

In March, the U.S. Department of Energy (DOE) announced plans to lend Lithium Americas up to $2.26 billion, under the Advanced Technology Vehicles Manufacturing loan programme, for the construction of its Thacker Pass lithium project in Nevada. Development began in March 2023 and the mine is expected to commence operations later in the decade. supplying General Motors with lithium supplies. This marks one of the biggest government investments in the lithium industry to date. The government views the development of the domestic critical minerals industry as key to achieving a green transition, providing the materials needed for large-scale renewable energy projects and the rollout of EVs. 

Initial production is expected to stand at around 40,000 metric tonnes of battery-quality lithium carbonate per year, equivalent to the amount needed to power around 800,000 EVs, to eventually increase capacity to 80,000 tonnes per year. In addition to public funding, the project is also being supported by GM, which has invested $650 million in the development. Jon Evans, the Lithium Americas CEO, stated "We have an incredible opportunity to lead the next chapter of global electrification." 

Lithium Americas is planning to extract lithium from a clay deposit at its Thacker Pass, an extraction method that has not previously been carried out on a commercial scale. Extracting lithium from the clay requires the company to import sulphur to create sulphuric acid. Lithium Americas will, therefore, construct, a rail terminal around 97 km from the mine to bring materials to site. 

In November last year, Exxon Mobil announced it had plans to commence lithium production starting in 2027. It will extract lithium from briny water in subsurface wells in Arkansas. The company plans to use conventional oil and gas drilling methods to access the reservoirs, which sit at around 10,000 feet underground. It will then use direct lithium extraction (DLE) technology to separate lithium from the saltwater. Exxon will partner with Tetra Technologies to develop its lithium business and it will sell supplies under the brand name Mobil Lithium. 

Exxon aims to supply lithium for over a million EVs annually, to become one of the biggest U.S. lithium suppliers by the end of the decade. This could cost the company up to $2 billion in investment to provide 50,000 tonnes of lithium. Dan Ammann, the president of Exxon's Low Carbon business unit, believes "In the long term, lithium really is a global opportunity." He explained, "We are starting here because there is an urgent need to ramp up domestic production of these critical materials."

Despite positive steps towards the development of a U.S. lithium industry, it is not all clear sailing as several projects are expected to take years to develop, while, at the same time, environmentalists and indigenous groups across the country are critical about plans for new mining activities. Albemarle, a major lithium producer, announced aims to reopen the resource-rich lithium Kings Mountain mine in North Carolina by late 2026, to help boost the domestic supply of the critical mineral. However, it is facing delays due to the fall in lithium prices, by around 40 percent over the last year. Eric Norris, the president of energy storage at Albemarle, stated "It's going to be a later date." He explained, "It slowed down a bit given the concerns we have, but we are still progressing it forward. It's not that we've stopped it."

The company hopes to produce enough lithium to support the manufacturing of up to 1.2 million EVs a year. Albemarle plans to go ahead with the permitting process, which could take up to two years, with construction expected to follow. However, the company believes Lithium prices must be at a minimum of $20 per kilo to justify new investments. The average price in 2023 stood at $15 per kilo. Nonetheless, the demand for lithium is expected to increase as the demand for utility-scale battery storage increases and the uptake of EVs continues to grow.

In addition to weak lithium prices over the last year, many mining developments have been delayed due to opposition from environmentalists and indigenous groups who oppose new mining projects. While mining for lithium is key to a green transition, the proper regulations and oversight must be in place to ensure that mining companies do not cause unnecessary damage to the environment as we transition away from fossil fuels to 'less harmful' alternative energy sources. 

By Felicity Bradstock for 

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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. More