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Net zero in jeopardy unless world meets lithium and copper demands – but there’s a gap between supply and demand

The global transition to net zero carbon emissions will be in jeopardy if the world doesn’t find a way to meet the rapidly increasing demand for lithium, copper and other materials critical to the green revolution, according to a representative of the planet’s largest mining companies.

The CEO of the International Council of Metals and Mineral Mining, Rohitesh Dhawan, said that lithium was a particular challenge for many of the council’s members, which include mining giants Rio Tinto, Anglo American, BHP and Glencore.

There is such a shortage of lithium, which is essential for producing batteries, that its price has jumped from $9,600 per tonne in January 2021 to more than $50,000 per tonne in January 2022.

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In an interview with Sky News, Mr Dhawan said: “Lithium is a challenge.

“We can see quite a large mismatch between demand and supply. We currently produce around 400,000 tonnes of lithium annually. By 2030, that’s likely to (need to) jump to around two million tonnes.

“To close that gap, that’s going to mean lithium supply having to come on stream really, really quickly, at rates we’ve never had to grow at before.

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“At the moment about half of global lithium demand comes from the electric vehicle market… by 2030, 80% of global lithium demand will come from the electric vehicle market because we need to electrify our transport fleet that quickly.

“It is a lynchpin for the global energy transition… the demand supply gap is really systemically important.

“There is no net zero transition without the metals and minerals needed to power it.

“If we don’t succeed in meeting the world’s demand for metals and minerals through primary production, through recycling and through re-mining existing waste, then I think it is in jeopardy because new technologies are so metals intensive.

“If we don’t fix the demand supply gaps for metals and minerals, it’s very hard to imagine a net zero transition.”

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Employees work on a production line manufacturing lithium battery products at a factory in Yichang,
Image: Employees work on a production line manufacturing lithium battery products at a factory in Yichang, China

Another area with supply issues is copper, a metal crucial to electrification.

It is difficult and expensive to mine and it can take over a decade to begin extraction once it has been located.

Mr Dhawan said: “A traditional car carries about 10 or 15 kilograms of copper, but when we all switch to driving electric vehicles that jumps by five times.

“In many parts of the world, the grades of copper ore we are able to mine have declined over time… and that does pose a challenge, as does the time it takes to take a project all the way from conception… to production.”

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Apart from the practicalities of extraction, there are geo-political and in-country risks, too, as nations jockey to secure supplies of the right minerals and to gain maximum value from their natural resources.

Across the world in recent years, local opposition to green materials mining has slowed or halted projects, including in countries like Serbia, Portugal and the US.

Newly elected left-leaning leaders in Peru and Chile, the world’s largest copper producer, are considering ways to keep a greater share of the profits and to impose stricter environmental standards on mining operations.

Mr Dhawan said: “I don’t think there’s been a shared understanding of what will be required to power this energy transition.

“I think we are starting to understand the centrality of metals and minerals, so I think it will change in the coming years as people understand the importance of having reliable supplies.

Lithium deposits could be exploited in Cornwall
Image: Lithium deposits

“For governments, it is even more important because these now become key geo-political issues on where supply will come from.”

There are also ongoing concerns about the environmental and social impacts of extraction on such a huge scale, even if the materials are central in the battle against climate change.

Read more: Global lithium shortage could put brakes on UK electric car sales acceleration

Lithium, for example, comes from rock or brine, both carbon and water intensive processes respectively.

For example, extracting one tonne of lithium from hard rock generates about 15 tonnes of carbon, and generating one tonne of lithium from brine uses about two million litres of water, which is the roughly the amount of water one person living in the UK might use over a period of 35 years.

The mining industry is in the process of developing new ways of extracting from different sources like clay deposits to reduce this water intensity, but so far not at scale.

Copper production, which is also water intensive, tends to occur in parts of the world that are water stressed, 80% of production in Chile occurs in regions of high water stress.

And just as there are those who argue the fossil fuel industry cannot be trusted to help drive the transition to renewable energy, campaigners say that mining companies, some of which have inflicted great harm on indigenous communities, water sources and areas of ecological importance, cannot be trusted to provide the materials for a transition to zero carbon.

Mr Dhawan said: “We regret every bit of harm we’ve ever caused as a result of our operations.

“Mining, by its nature, has risks, and those risks are part of the way mining occurs, but we don’t believe that if risk is inherent, then harm is inherent.

“Our focus is on making sure that we manage those risks both to people and the environment as much as we possibly can, and we’re not there yet, because people continue to lose their lives… We’ve had instances of environmental spills, and we’ve had tragic accidents.

“The vision has to be no harm, but I am realistic that on the journey to get there we are still having instances of negative impacts on the environment and on people which we have to do everything to minimise.”