Battery production has become a global industry with intricate supply chains, predominantly centered in China, where a significant portion of raw materials refining and cell production occurs. Raw materials constitute approximately 65 percent of the final battery cost, and the raw material market is susceptible to volatility due to increasing demand for electric vehicles (EVs) and other rechargeable devices.
The achievement of price parity between EVs and internal combustion engine vehicles, often estimated at $100/kWh (€97.6 / kWh), is anticipated to occur around 2030, nearly a decade later than previous expectations. Lithium, a crucial component in all EV battery cathodes, is blended with other materials such as nickel, manganese, and cobalt, and all these cathode materials are recyclable. Graphite, a material that is challenging to recycle, represents the most significant portion of a Li-ion battery by weight. Li-ion batteries play a central role in the transition to a net-zero carbon future, dominating the EV market, which, in turn, dominates the Li-ion market.
Despite the rapid growth of the EV market, the growth in used EV batteries does not align seamlessly due to varying battery lifespans. In October 2022, Belgium announced its first battery Gigafactory, the ABEE plant in Wallonia, with a production capacity of 3GWh/year. Some Belgian automakers, like Volvo Cars, Volvo Trucks, and Audi, are assembling battery packs at their factories. Although Belgium lacks natural resources for battery production, it can leverage its expertise in second-life applications and recycling.
The Growing Demand for Energy Storage
As the world transitions away from fossil fuels toward electrification, the demand for energy storage is on the rise. BloombergNEF predicts that by 2040, two-thirds of new passenger vehicle sales globally will be electric. Additionally, McKinsey forecasts a continued annual compound growth rate of approximately 30 percent for Li-ion batteries over the next decade. By 2030, EVs, energy storage systems, e-bikes, electric tools, and other battery-intensive applications could account for 4,000-4,500 gigawatt-hours (GWh) of Li-ion demand. According to Wood Mackenzie, global cumulative lithium-ion battery capacity may increase more than fivefold to 5,500 GWh between 2021 and 2030, with electric vehicles accounting for nearly 80 percent of Li-ion battery demand. The rise in demand is attributed to high oil prices and zero-emission transportation policies, projecting lithium-ion battery demand to exceed 3,000 GWh by 2030.
The International Energy Agency (IEA) emphasizes in its report “Net Zero by 2050 – A Roadmap for the Global Energy Sector” that approximately 2 billion EVs need to be on the road by 2050 to achieve net-zero emissions. This represents a significant increase from the 6.6 million EVs sold in 2021.
The Global Picture
Graphite, a vital component of lithium-ion (Li-ion) batteries, constitutes approximately 30 percent of their weight. This graphite is typically in the form of minuscule spheres, about a tenth of the thickness of a human hair. Notably, China dominates the global supply of natural graphite, as well as graphite refining. While synthetic graphite has been developed to reduce reliance on China, it is derived from fossil fuels and is becoming more expensive than its natural counterpart.
Recycling graphite poses substantial challenges due to the chemical damage it incurs during battery operation, including charging and discharging cycles and varying ambient temperatures. While graphite can be recycled, the extent of refinement depends on the quality and purity required, as well as the associated cost.
As of now, recycling battery-grade graphite remains economically not feasible due to the complexities and costs involved in extracting graphite from used batteries. Pyrometallurgical recycling, a common method, involves burning out the graphite, but more sustainable alternatives are sought after. Interestingly, some companies have found innovative uses for graphite from used electric vehicle (EV) batteries. Umicore, for example, utilizes graphite as a reducing agent in its high-temperature recycling process, acknowledging that refining it to battery-grade material is currently impractical.
Graphite’s circularity is hampered by its low primary product value, difficulty in separation, and high refinement costs. Creating a closed-loop system for graphite remains a challenge. However, companies like Solvay are exploring the possibility of extracting and preparing graphite for other entities that can fully recycle it, offering a potential avenue for enhancing graphite’s sustainability in Li-ion batteries.
Graphite: A Vital Clog
The global electric vehicle (EV) battery landscape, while spanning the globe, is largely controlled by a select few countries. Remarkably, a staggering 85 percent of the world’s EV batteries are manufactured by China, Japan, and South Korea, with China standing out as the dominant player among them. Chinese companies wield considerable influence throughout the lithium-ion battery supply chain. Also, exerting control over cobalt refining, graphite mining, and refining. Additionally, China is a substantial contributor to lithium brine and ranks as the fourth-largest source of manganese.
The automotive industry has long anticipated achieving cost parity between electric vehicles and Internal Combustion Engine (ICE) vehicles by approximately 2023. Driven by decreasing battery costs and advances in battery technology. However, recent price hikes and pronounced volatility in raw material prices appear likely to postpone this parity milestone.
Paving the Way for Sustainable Battery Recycling
Raw material prices wield substantial influence over battery costs, which in turn impact EV prices and, by extension, EV sales. Furthermore, these raw material prices shape the business models for battery recycling and second-life applications. The milestone often cited in the EV industry is a battery price of $100 per kilowatt-hour (kWh), as it is projected to enable EVs to achieve price parity with internal combustion engine vehicles. Despite considerable reductions in battery prices, heightened demand for lithium and cobalt has delayed absolute price parity. However, as raw material prices stabilize or rise. And the availability of second-life and fully-recycled batteries from early-generation vehicles increases, a substantial opportunity emerges in the battery recycling sector, which is forecasted to become a multi-trillion dollar industry by 2030.
MiniMines’ mission is to confront these issues head-on by offering effective solutions. We’re committed to crafting cost-effective, sustainable methods that not only extract valuable resources but also curtail carbon emissions, paving the way for a cleaner future. Our expertise lies in advancing renewable energy, electric mobility, eco-friendly materials, and a circular economy. We are a clean technology company, employing cutting-edge, eco-conscious techniques to recover and recycle precious materials from sources like lithium-ion batteries and industrial by-products. Our innovative HYBRID-HYDROMETALLURGY™ process is at the heart of our operations.
