Lithium and Copper: The New Oil

April 21, 2021


For decades, crude oil has been at the center of global commodities markets. Demand has served as a crucial metric of economic health, and price spikes have had major ramifications for gas-guzzling consumers.But as countries around the world try to combat the climate crisis, oil could take a backseat, while metals like copper and lithium gain prominence.”The critical role copper will play in achieving the Paris climate goals cannot be overstated,” Goldman Sachs analysts said in a recent research note titled “Copper is the new oil.”

Setting the scene: Copper is an essential component of systems that allow wind, solar and geothermal energy to be tapped and transmitted for applications like heating homes, the analysts noted.

And the market already looks tight. Copper prices have rallied 80% over the past 12 months, and supply is constrained as demand skyrockets. It takes two to three years to extend an existing mine, and as many as eight years to establish a new project, according to Goldman Sachs.

That could set up the price of copper to jump from current prices of more than $9,000 per tonne to $15,000 per tonne by 2025, per the bank’s estimates.There’s also a growing focus on lithium, a key component for batteries in electric cars. In a recent note, analysts at Macquarie Research predicted that demand for electric vehicles could trigger “material shortages” of the metal from 2025.These constraints are putting lithium miners in the spotlight.

On Monday, Australia’s Orocobre and Galaxy announced a $3.1 billion merger that would create one of the biggest lithium companies in the world.Why it matters: Global carbon dioxide emissions are set to surge dangerously this year as the global economy undergoes a huge recovery, according to a report published Tuesday by the International Energy Agency.

The Paris-based group estimates that carbon emissions from energy use are on track to spike by 1.5 billion tonnes in 2021, as heavy coal consumption in Asia, and in China in particular, outweighs rapid growth in renewable sources. That would be the second largest annual increase in energy-related emissions in history. “This is a dire warning that the economic recovery from the Covid crisis is currently anything but sustainable for our climate,” Executive Director Fatih Birol said in a statement.

Watch this space: The IEA is sounding the alarm before 40 world leaders come together later this week for a two-day virtual summit on the climate crisis convened by President Joe Biden. Birol called it a “critical moment to commit to clear and immediate action.”

Below, a comparison of Lithium production to coal production.

Lithium mines produced an estimated global total of 82,000 metric tons of lithium in 2020. This is a significant increase from 2010, when production was just 28,100 metric tons. – Statista

By comparison, IEA data indicates total world coal production topped 7.9 billion metric tonnes in 2019. Google gives slightly different figures varying from year to year and metric v short tons.

So, we are currently mining roughly 100,000 times as much coal as we are lithium.
I have seen projections that we will need 30 or 40 times current Lithium production as we go to a clean energy economy – still far below the mining impacts of coal. Also, Lithium will be recycled, so the production need not continue to grow indefinitely.

I have more concern about copper, but copper is also highly recyclable, and that supply chain already exists, and has for thousands of years.
One pathway getting attention is the recovery of mineral rich nodules from the sea bottom.

Last year, Allseas, in partnership with DeepGreen, acquired a former ultra-deepwater drill ship for conversion to a polymetallic nodule collection vessel.

Houston Chronicle:

Some 1.4 billion vehicles are on the road worldwide, including 1.1 billion passenger cars and 363 million commercial vehicles. DeepGreen estimates that manufacturing the batteries needed to replace 1 billion fossil fuel-burning cars would require a combined 155 metric tons of nickel, manganese, copper and cobalt over 30 years. But as demand accelerates, mining companies are making fewer discoveries of these metals on land, analysts said. And the discoveries that are being made are typically of lower quality ores.

Of the 50 major discoveries of nickel ore made from 1990 to 2019, only three occurred in the past decade, according to S&P Global Market Intelligence. This represents “a sharp decline from the 1990s, when new nickel discoveries were much more common,” S&P said in a report last year.

By 2025, a single nation, Indonesia, will account for about 60 percent of global nickel production, with most of that production under Chinese control, said Rory Usher, a DeepGreen spokesman.

The Chinese, Usher said, “invest heavily in Indonesia. There is no new stream of Western-controlled nickel production of any size coming online in the next decade.”

DeepGreen’s solution lies at the bottom of the sea. The company plans to mine the polymetallic nodules found on the ocean bottom.

The resource has yet to be commercially exploited, but an international consortium of mining and energy companies successfully demonstrated the feasibility of collecting the nodules from the sea floor in the 1970s. The consortium — which included the European oil majors BP and Royal Dutch Shell – didn’t exploit the resource because there were no international rules governing undersea mining.

Those rules were developed through the United Nations Convention on the Law of the Sea in 1982 and the establishment of the International Seabed Authority in 1994 to regulate undersea mining. DeepGreen has secured a license from the International Seabed Authoriy to explore an area of the Pacific Ocean designated as the Clarion Clipperton Zone, about 1,000 miles off the coast of Mexico. The exploration area is known to hold vast resources of the metal-bearing nodules.

DeepGreen has targeted a block of ocean floor designated as NORI-D, which contains a wealth of minerals, including metals used in batteries. The company has mined a small volume of the ore-bearing nodules in a test project.

The mineral collection process is designed to cause minimal environmental damage. A robotic collector vehicle operating on the sea floor blows a jet of water across the tops of the nodules where they sit in the sediment. The water jet loosens the nodules from the sea floor, and they’re vacuumed up into the robot vehicle, which separates the rocks from the sediment.

Environmentalists worry that this kind of mining can alter or destroy deep-sea habitats, fragment ecosystems or wipe out undiscovered species.

DeepGreen, however, said its process was vetted by a team of environmental scientists to ensure the least ecological harm. For example, the collection process only affects the two to four inches of the sediment on the sea floor.

The mineral-bearing nodules then are floated on compressed air bubbles up a pipe to the surface, where they are fed into a vessel.

“We can lift the rocks without touching them directly,” Usher said. “There’s no cutting. It’s not invasive in that sense.”

Some scientists also have expressed concern that the water returned to the ocean is mixed with sediment from the sea floor, which can create plumes of suspended particles that may harm species that rely on filter-feeding, such as krill and whale sharks.

To solve this problem, DeepGreen plans to use pumps that send the return water stream to depth below the trophic zone, the sunlit section of the ocean that supports most marine life.

3 Responses to “Lithium and Copper: The New Oil”

  1. Living in Cornwall there has recently been a flurry of interest around lithium mining in Cornwall with various companies expressing interest and carrying out exploration. These include many new groups, not just the usual suspect, South Crofty Ltd.

    Copper was also available but most of the available productive veins were mined out BUT … what is being kept very quiet is that there were substantial veins of Cobalt were recorded, notable Mr Beauchamps Cobalt mine in the Gwennap area. Also in the same formations but near Porthtowan Geoscience in South-West England reports Cobalt mineralisation.

    I’m not sure I want a new mine opened only a couple of km from me but we are desperately short of jobs down here

  2. Keith McClary Says:

    ” … manufacturing the batteries needed to replace 1 billion fossil fuel-burning cars would require a combined 155 metric tons of nickel, manganese, copper and cobalt over 30 years. But as demand accelerates, mining companies are making fewer discoveries of these metals on land, analysts said.”

    155 metric tons is two railroad cars full.

  3. J4Zonian Says:

    Commercial mining investment strikes me as tending strongly toward either on-demand or trying-to-hoard. Both are slowing our response to the exponential growth of clean safe renewable energy. Moving from 2% EV market share to 10% and beyond has happened astoundingly fast in European countries that have set goals and policy to achieve rapid EV adoption; Norway’s at nearly 90%, Sweden, Iceland, Netherlands are following just 1 to 3 doubling times behind.

    IEA and most of the other tracking organizations have been woefully out of touch with the growth of clean safe renewable energy, consistently underestimating it, and there’s no reason to believe they get it any better now. This is almost certain to exceed their projections, too. Corporations will do what they always do—make the situation worse. So we need the US and other governments to take charge of ensuring the future production of crucial materials while preventing the socialization-of-costs/privatization-of-profits problem. That also means democratization of the US is even more pressing, so we need a corporatectomy from the governments of the US.

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