The future of the battery supply chain

Insights from AusIMM Lithium & Battery Metals 2020 virtual conference

by Dr Chris Vernon

The 2020 AusIMM Li & Battery Conference was held online at the end of August, in a setting different than other years but what has become normal for 2020.

Despite its digital delivery, delegates from 12 different countries attended to hear from several keynote speakers, including myself, on the latest research, developments and innovative technologies relating to lithium and other battery metals.

The focus was on the current and future markets for lithium and battery metals, with all speakers highlighting the need for sustainable development in the sector.

One theme that stood out in particular for me was the future of battery supply chains, and both the opportunities and challenges that exist for processing operations in terms of capturing downstream value-adding activities.

It was widely agreed that the world is looking for better production practices, but still maintaining a competitive price point.

There is an understanding that current processing methods aren’t optimal, and there is a need for improvement.

For those coming into the market, this could be a point of differentiation; a chance to do it better.

There was plenty of relevant discussion around the Australian market, but the industry and value chain is global.

For me, there were three key points of discussion that stood out as important to consider, when it comes to the future of battery metal mining, processing, and manufacturing.

Three key insights into the future of battery metals

1. There’s a clear opportunity to expand into downstream processes

There’s a growing global interest in raw battery materials, but also an increased interest in where and how they are processed and manufactured.

Diversification of the battery metal supply chain is needed where reliance is not on any single country, due to the instability of global markets as well as ethical concerns over safety, environmental and sustainability issues.

Some companies who invest substantially in battery metals (predominately automotive companies) are coming forward, willing to pay a premium for a secure supply chain of battery raw materials, and even becoming involved themselves.

Countries that are mining and processing these materials have an opportunity to invest in downstream processing and capture more of the value chain – including Australia.

Almost 50% of global lithium supplies come from hard rock minerals; lithium aluminium silicates, in particular spodumene.

Western Australia has emerged as the dominant supplier of spodumene because of its favourable geology and its capability as a world-class mining jurisdiction.

Once mined, Australian spodumene ore is concentrated and then shipped to China where it is converted into saleable lithium chemicals.

Australia currently captures only 0.5% of the lithium value chain (from mine to battery).

Therefore, there is a major economic opportunity to advance further along the value chain evolving from a mining to processing role, to become a global hub for the manufacture of battery-grade chemicals using locally sourced materials and expertise.

Spodumene is the major mineral processed to lithium hydroxide, currently in demand by battery manufacturers, but processing of other lithium minerals is also developing rapidly.

While the focus of the conference was on lithium, Australia is in an excellent position to make contributions to industrial development that targets other battery materials.

Current-generation lithium-ion batteries (LIBs) contain just 4% elemental lithium by weight. And while it’s true that lithium does all the work in a LIB, many other elements are essential in making LIBs – including nickel, cobalt, manganese and graphite.

2. Advancing along the value chain comes with an increased risk appetite

It could not be argued that Australia has a strong competitive position for making mass-market cells/batteries, but could meet demand for supply of battery-grade chemicals and/or precursors to those who do.

While the opportunities are there, they are not without risk. Investors need a risk appetite as the technology is still new and developing.

• Process: In terms of lithium chemicals production, the traditional sulphuric acid-based process has not been replicated commercially outside of China. The refineries currently under construction in WA utilise this technology, and it can reasonably be expected that issues will arise during commissioning and start-up.

• Cost: Economic risks also exist, for both producers of concentrate and converters. Battery mega factories haven’t come online as quickly as expected, with lithium prices tumbling over the last year due to issues with over-supply and a slow-down in the electric vehicle (EV) market. Price volatility has led to a delay in lithium refineries coming online, but this is considered a timing issue rather than a fundamental market issue.

• Competition: There are many other geologically favourable regions around the world where lithium mineralisation is being found, and are prospective for finding much more (e.g. Canada, the USA and within the EU). There are also some countries (e.g. Finland, Sweden, Germany, UK) where Governments are demonstrating a willingness to underwrite substantially, the development of downstream lithium-battery industries. Their levels of support can be measured in the billions of dollars.

• Product changes: Battery technology is rapidly evolving, and there is uncertainty around what they will look like in a few years’ time and what metals will be in higher or lower demand (witness Tesla’s Battery Day announcements – less lithium and no cobalt). This could be a risk or an opportunity, depending on how it is viewed. But it does demonstrate the need to read the market, as mining and processing are based on market demand. Moving along the value chain presents a more intelligent process, as there is more opportunity to work with buyers to determine demand and need, better guaranteeing an end-product buyer.

3. Extensive R&D is required for processing and waste reduction

There is much to do in the R&D space to develop cost-effective and environmentally friendly processes for the extraction and refining of battery-grade chemicals and to demonstrate our technical capability to global battery manufacturers.

Batteries for EVs and energy storage rely on high purity materials to achieve the best electricity storage quality and product safety.

So, producing battery-grade chemicals often requires new production process technology or improvements, and more energy input.

On top of this, we need to apply circular economy principles to all side-stream wastes from these processes, not just to end-of-life batteries.

The environmental footprint of all steps in battery manufacture needs to be minimised, in order to achieve and maintain ‘green credibility’.

We will take lithium and graphite as examples.

Lithium

Lithium chemicals production results in spodumene leach residue, a Class III waste material, making it more expensive to dispose of.

R&D work is required to develop cost-effective processes for the recovery of value from leach residue, and to target/identify sustainable markets for the leach residue and/or valuable products obtained from these.

Graphite

Purifying and spheronising graphite are necessary steps in preparing battery anodes – both present challenges.

The primary means of purifying natural graphite from flotation concentrate grade (~95% pure) to battery-grade purity (>99.95%) is by prolonged leaching in concentrated hydrofluoric acid.

This introduces significant environmental concerns and limits the number of jurisdictions which permit this process, the latter introducing sovereign risk to the battery anode supply chain.

Businesses are actively seeking alternative processing routes to ‘greener’ and less constrained anode supply, implying a degree of concern for the future.

Spheronising graphite flakes is a mechanical process and may be performed by hammer mills, jet mills, or other apparatus.

The process inevitably leads to the production of large volumes of fines, with typical process losses of >50%, and losses of >70% not being uncommon.

Developing an economical non-hydrofluoric acid process to produce battery-grade graphite mitigates the risks associated with current purification technology.

A better understanding of how spheronisation works (the operational parameters, the hidden variables) is needed to allow the design and operation of lower loss spheronisation mills.

This may further require computational fluid dynamics simulations to design improved mills.

The future is now – discover how you can be part of it

While much of what was discussed during the conference was about the future of the battery market, many of these changes are already happening.

Multiple operations and big-name companies are already making moves to embrace new supply chain opportunities and implement greener processes.

We understand these movements, having already worked closely with a number of operations to develop processes specifically within the battery metals market, including:

• working with BHP to build a pilot plant at our Waterford site in Perth that replicates all aspects of the proposed Kwinana plant in order to test their process to ensure product quality. BHP has committed to converting from an LME nickel metal business to a battery-grade nickel sulphate business.
• working with an international graphite producer to develop a non-hydrofluoric acid processing route to battery-grade graphite.
• development of new flowsheets for unlocking Montezuma (now Element 25) Butcherbird manganese deposits to EMD, EMM and manganese sulphate for battery industry, which is recognised as a unique processing breakthrough, featuring a simpler, cleaner proprietary processing method.
• a partnership with QPM, in which they have successfully produced battery chemicals from a mixed hydroxide product generated by the DNi Process^TM.

While there are clear challenges and risks that face those willing to move forward with entrance into the battery market, we are uniquely positioned to help to de-risk commercial-scale operations and improve one or more elements of the triple bottom line. Internal expertise includes:

• carrying out testwork to develop improved process flowsheets and to provide input for pre-feasibility studies to allow the economics and environmental impacts of commercial-scale processes to be assessed;
• hosting and running pilot plants to test new processes that have resulted in companies being able to produce quality product samples to specifications for their customers in the battery market;
• chemistry know-how across the entire battery value chain, from characterisation to discovery, mine, process, manufacture, and recycle, as well as understanding of the technology needed for market entry point.

Industry partnerships are a key part of driving our knowledge and processes forward, so sharing your challenges with us is vital to moving industry capabilities forward.

If you’re interested in learning more about the future of battery metals, capturing more value from the supply chain or implementing greener processes for metal capturing and processing, we are interested in partnering with you to bring value and help your organisation thrive.

Email me, Chris.Vernon@csiro.au, to explore how we can help you.

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