The lithium war. How green is your new Electric Vehicle? (And how you can fix it)
Unveiling the dirty secrets behind the EV lobby. Why EVs are sparking a global scramble for resources with potential geopolitical consequences.
According to a recent report by the International Energy Agency (IEA), due to the rapid expansion of the EV market, the global demand for lithium is expected to increase by 40 times next 20 years. This surge in demand has led to concerns about the practice of lithium mining as well as potential lithium shortages and resulting geopolitical conflicts…
Lithium is a popular metal predominantly used in batteries, computers, and mobile phones. Lately, the explosion of the electric vehicles market has been resulting in the explosion of lithium demand:
A single electric car's lithium-ion battery pack typically contains around 8 kilograms (kg) of lithium.
A mobile phone battery pack typically contains around 0.6 grams of lithium
A computer battery pack typically contains around 4.8grams of lithium
Let’s do a bit of maths, in 2022, the total global production of lithium was 100,000 tons (equivalent to 90.7 million kg), hence, enough to produce 11.3 million cars if this lithium were used solely for the EV market.
Now in 2022, there were already 8 million EV cars sold and that is not even counting the lithium used for your iPhone o your Macbook pro: You see where I’m going
An ultra-monopolistic market in a shaking geopolitical environment
August 2022, TAIPEI, Taiwan — As Chinese warships rehearsed a blockade of Taiwan this month, they simulated a scenario global leaders and policymakers have been busy worrying about: not war, but a grinding halt to the electronic supply chains that make the modern world run.
Taiwan’s biggest trading partners — which include China, the United States, Europe, and Japan — have different ideas about the self-ruled island’s political future, yet all share common ground in one desire, to expand their piece of its cutting-edge semiconductor industry (source).
Sounds familiar? Well, continue reading…
The worldwide reserves of lithium are estimated to be around 22 million tons (equivalent to 20 billion kg), and only a few countries are sharing this resource production as reported by the US Geological Survey (graph below). This concentration of lithium resources in a few countries could pose a challenge to not only obtaining lithium and supplying our electric vehicles’ demand towards decarbonization, but also a serious monopolistic danger and geopolitical pressure that could arm the global peace.
According to Stuart Crow from Lake Resources, "China owns 70-80% of the entire supply chain for lithium mining and lithium-ion batteries production" as reported in the Financial Times.
How it is done? An example here in Zimbabwe:
Prospect Lithium Zimbabwe (PLZ) allegedly paid US$55 000 for a portion of land fields in Goromonzi, an area where a potential lithium site has been found. Immediately after partially developing the mine, it quickly sold it to Chinese investors for US$378 million.
(And meanwhile, you are still looking at crypto returns? Hahaha.)
The International Energy Agency (IEA) indicates that China's share of global lithium chemical production is around 60%, and it accounts for 80% of lithium hydroxide output.
The IEA also states that five major companies are responsible for three-quarters of global production capacity.
Based on the US Geological Survey, Australia produced the most lithium in 2021. On the other hand, Chile possesses the largest lithium reserves in the world and is part of the "Lithium Triangle," along with Bolivia and Argentina. These three countries contain nearly 60% of the world's lithium resources, and most of the production companies are somehow Chinese owned as stated in the 2021 US Geological Survey's Mineral Commodity Summary.
China has already won the EV game. Been planning this for a decade. In a geopolitical climate where China is eying Taiwan, and Russia is eying Ukraine, there is never been a need for diversification of lithium supply and “no-lithium based batteries” innovation in the EV space.
How “decarbonized” and “Green” is your EV?
The process of extracting lithium demands a substantial amount of water, which is causing concerns regarding water stress. Water stress refers to the situation where the water resources of a particular area are insufficient to meet its needs.
How you can be part of the solution?
Innovating toward more sustainable lithium mining practices with Atlas Capital
In February, our research team worked on identifying the biggest players in the space alongside the fastest-growing innovations in its supply chain forming the new EV ecosystem, here is the map:
As the world transitions to a cleaner and more sustainable energy future, the demand for lithium and other critical materials will continue to grow.
Despite these efforts, it is clear that lithium demand will remain a key issue in decarbonizing our mobility industry in the years to come.
To address these concerns, many climate tech companies are investing in new, more sustainable, lithium extraction technologies, such as brine evaporation and hard rock mining, to increase the supply of lithium with less water and less impact on the environment.
In addition, some companies worth noting are exploring alternative materials for batteries that may reduce the demand for lithium, such as solid-state batteries.
Here are the top lithium mining companies our research team has identified as investment opportunities this month:
#1: Cornish Lithium
Headquarters: United Kingdom
Funded: $ 51.1 M
The operator of a lithium mining and exploration company intended to offer environmentally sustainable extraction of lithium. Cornish Lithium’s exploration services help to extract raw materials for the green industrial revolution, enabling clients to have sustainable products essential for the transition to a green economy.
Funded: $ 17 M
Solarbio is an energy production company intended to foster sustainable development and create a better and cleaner earth for the future. The company builds and operates lithium mining and chemical processing facilities that are reducing water usage and compliant with the local cities’ health requirements, enabling the world to access low-cost lithium products to fuel a global, low-carbon economy.
Headquarters: United Kingdom
Funded: $ 4.69 M
British Lithium is a hard-rock lithium exploration company intended to facilitate the large-scale manufacture of lithium-ion batteries. The company's technology allows for the concentration of lithium mica from cornish granite and the sustainable extraction of battery-grade lithium, enabling battery manufacturers to produce batteries for electric vehicles with less environmental pollution than traditional techniques.
Funded: $ 17.22M
Novalith is a startup working on lithium extraction and refining technology intended to reduce the environmental impact of lithium production. The company's technology directly uses and sequesters carbon dioxide to provide low carbon, sustainable approach to lithium chemicals production, enabling clients to substantially reduce production costs, improve sustainability outcomes, and ultimately revolutionize the global battery supply chain
Funded: $ 1.59M
ElecraLith is the developer of direct lithium extraction technology designed for efficient and sustainable lithium production. The company's technology extracts lithium by using electricity while reducing costs for both brine and hard rock producers, enabling clients to get cleaner, cheaper, and faster lithium production from all manner of feedstocks around the globe.
If you want to get in touch with any of these companies in our deal flow:
At Atlas Capital, we do not only focus on new technologies, but we also aim to revolutionize traditional industries into greener, decarbonized ones. We believe that by bringing entrepreneurs, and investors together, we can ride that trillion-dollar market tsunami while returning huge ROI to our limited partners and saving gigatons of CO2. If you believe that now is the time your investments can build a zero-carbon world for your children… Join Atlas Capital, today.