Satisfying global demand for lithium, cobalt, nickel, and graphite will take hundreds of new mines by 2035!
Major carmakers seem to agree that EVs are the next step for the industry, but a lack of raw materials will be the next hurdle the industry must overcome.
Demand for raw materials and the metals used to make EV batteries, such as graphite, lithium, cobalt, and nickel, is already outpacing supply. According to Benchmark analysts, unless 384 new mines are up and running in the next ten years, the EV transition will be indefinite as carmakers struggle to source battery metals.
Suppose carmakers and state governments want to reach a zero-emissions future no later than 2035. In that case, the world will have to open at least 74 lithium mines, 62 cobalt mines, 72 nickel mines, 97 natural graphite mines, and 54 synthetic graphite plants, as Benchmark (mineral intelligence) illustrates.
That adds up to 359 mines and plants, which is about an average number of the low (336) and high count (384) of mines required, accounting for the supply of recycled materials. These are terrible news for those hoping that recycled metals would yield anywhere close to all materials needed, carmakers included.
There’s just no getting around that millions of tons of raw materials will have to be extracted to meet demand. In 2022, global lithium supply was at 747,000 tons, but analysts say demand will have increased to a whopping 4.4 million tons by the end of 2035. According to estimates from Volkswagen, global lithium reserves max out at 14 million tons.
While demand will reportedly accrue to 4.4 million tons in over ten years, lithium mines can take around five years to build up to total capacity, so a head start on construction would help preempt the imminent lithium rush.
Lithium mining projects are notorious for sidestepping environmental reviews, which only adds to the urgency: it’s better to start early and do it as safely as possible instead of waiting for the last minute and rushing critical impact studies. But that still leaves the issue of demand spiking in the next decade, which current mines are not ready for.
Right now, Australia (not Chile) is the biggest supplier of lithium mined from ore harvested from spodumene rocks at more than 13 mines. Benchmarks say Australia will dominate the lithium trade for the next ten years. But China easily dominates lithium processing, refining more than 75 percent of the supply.
The U.S. says it no longer wants to rely on China for lithium; it plans to start its own mining and processing projects, spurred on by possible new investments and domestic sourcing requirements in the Inflation Reduction Act.
Given the sheer number of mines required, the U.S. might get a chance to open one or two or more. How many new lithium mines will be in the U.S. is yet to be seen, but regardless of where these are built, the point is the world is going to need more mines. Lots of them.