The United Nations Conference on Trade and Development (UNCTAD) recently unveiled a report titled ‘Commodities at a glance: Special issue on strategic battery and minerals’. This insightful document encourages studies into battery technologies that rely less on critical raw materials yet offer higher energy density. Energy density refers to the amount of energy that can be stored per unit mass of a substance or system, serving as a measure of energy storage capacity.
The Uncertainty of Raw Material Supply
The UNCTAD report underlines an uncertain supply scenario for raw materials used in manufacturing rechargeable batteries. Lithium, natural graphite, and manganese are identified as critical raw materials necessary for the production of these batteries.
Surging Demand for Rechargeable Batteries
The demand for rechargeable batteries is witnessing exponential growth given the rising incorporation of electric vehicles (EVs) into the global transportation sector. The report notes a 65% surge in electric car sales from 2017 to 2018, numbering 5.1 million vehicles, and forecasts an ascension to 23 million by 2030.
The Impact on Raw Material Consumption
Increased EV propagation has led to a consequent spike in demand for rechargeable batteries and their constituting raw materials. In 2018, the global market for cathodes for lithium-ion batteries was valued at $7 billion, and this number is predicted to skyrocket to $58.8 billion by 2024. As traditional energy sources lose relevance, the importance of raw materials for rechargeable battery manufacturing seems set to grow rapidly.
Potential Challenges: Limited Suppliers and Market Volatility
Supply security is a pressing concern for all stakeholders, given the concentrated production of these crucial raw materials in select countries. Over 60% of global Cobalt is mined in the Democratic Republic of the Congo, while 75% of worldwide Lithium is mined in Australia and Chile. Disruptions to supply can lead to market constriction, price escalations, and increased costs of rechargeable batteries.
An Overview of Li-ion Batteries
A lithium-ion battery or Li-ion battery is a rechargeable battery variant that uses an intercalated lithium compound as an electrode material rather a metallic lithium used in a non-rechargeable lithium battery. The battery consists of an electrolyte that allows for ionic movement, with the two electrodes constituting a lithium-ion battery cell. Used extensively in military, EVs, and aerospace applications, these batteries are among the most sought after types of rechargeable batteries.
The Importance of Monitoring and Mitigation Strategies
With investor confidence in the oil industry waning, alternative energy sources like electric batteries are gaining prominence. There is an increasing need for a strategy to dynamically monitor raw material cycles, from mining through processing, refining, manufacturing, up to recycling. This will enable early detection of supply risks and facilitate the development of mitigation strategies at both company and national levels.
