Does Europe have enough lithium?
A journalist recently contacted me to ask whether Europe would have enough lithium to power the EV revolution.
The EU has set targets for local production of critical and strategic metals and minerals, and lithium was seen as a key test of the realism of these and likely impact of the new rules (easing planning processes and potentially unlocking subsidies and other governmental supports).
“Accepting…strong uncertainties, Europe should be able to supply 10% of its needs in 2025 and 25-60% of its much higher needs by about 2030”
For lithium, the first target is mining 10% of our requirements locally. My analysis suggests the short answer is ‘yes’, Europe should be able to mine 10% of our lithium needs. But dig a little deeper and there are significant uncertainties.
Accepting those strong uncertainties, Europe should be able to supply 10% of its needs in 2025 and 25-60% of its much higher needs by about 2030.
However, there is very little upside to these estimates, and a great deal of risk inherent in a small number of projects that are required to meet them. Some of this risk can be eased by governments (for instance, the risk of or delay in securing approvals to develop) but some of the risks are commercial or technological - there are some highly innovative technologies required to make these plans work. Then there are the risks around finance and commercial aspects - who will back the process with investment, and will they secure the off take agreements with customers needed to underpin the investments.
Supply
In 2025 we could have 51.5 kt of LCE (lithium carbonate equivalent) production per year, from four projects (Barroso, Keliber, Vulcan and Wolfsburg). None is producing at scale today, and there is obvious risk that projects will be delayed or hit roadblocks. Notably, Vulcan is a completely new type of project requiring technology to extract lithium economically from underground brine that has not yet been proven at production scale. And Barroso is the subject of very significant community opposition on environmental grounds.
By 2030, Europe could be producing 235.5 kt of LCE per year. This is even more risky as it includes the large Jadar deposit (currently completely held up as the developer has had their license to mine taken away by the Serbian government) as well as an additional three new mines, again including some where economically feasible production techniques have not yet been proved at large scale.
Announced major European lithium mining projects, April 2023
“In 2025 we could have 51.5 kt of LCE … and by 2030, Europe could be producing 235.5 kt of LCE per year”
Demand
Demand is almost harder to predict. Announced new Li battery gigafactories in Europe total 1,875 GWh of capacity by 2030. Assessing their chances of successfully getting to production by their planned dates (or indeed at all) is hard - as Britishvolt has proved, it is hard to get to the point of actually building the factory. Market commentators make a wide range of predictions of the scale of the European industry - I’ve chosen 300 GWh by 2025 and 700 by 2030. But I and others can see up to 50% of announced projects failing.
Turning these forecasts into Li demand needs some assumption-making:
The ‘average chemistry' of the battery production (high nickel batteries will use a bit less lithium than LFP for instance)
The wastage or inefficiency of the production process, up to 50% in many gigafactories in their early stages of production (but ultimately wastage gets recycled back into the input feed)
The amount of recycled lithium from end-of-life batteries being fed into the process rather than mined (in the early years of rapid market growth this will be less significant - by 2035-2040 however this should be a noticeable contributor)
As a general assumption, around 5.5kg of lithium are needed for a 60kg battery on average. Converting lithium to LCE is an additional factor of 5.3. Which gives an overall conversion of 0.49 kt of LCE to produce 1 GWh of batteries.
Bloomberg chart showing reliance of EU on overseas imports 31 March 2023
Conclusion
Based on those assumptions, in 2025 Europe should be able to mine about 10% of the lithium it needs for European produced batteries. By 2030 this increases to 63%. However, if European battery production reaches the levels of announced gigafactory capacity (which I don’t believe possible) then the 2030 number falls back to 24% - still well over 10%. This falls even further, to 16%, if you leave out Barroso and Jadar.
One final point - meeting the 10% requirement is possible but very highly dependent on a few major projects, each with lots of risk, either because of unproven technology or significant community opposition. Any significant delays to those projects could change the answer.
“Europe should be able to mine enough lithium to cover 10% of its requirements from now to 2030. But the risks of delays or major projects not going ahead are high, the number of things that could go wrong and derail this is large”
So, Europe should be able to mine enough lithium to cover 10% of its requirements from now to 2030. But the risks of delays or major projects not going ahead are high, the number of things that could go wrong and derail this is large, and it still leaves a probable majority of lithium to be supplied from overseas desposits. Where it will be processed and refined is a matter for a future article.
