Electric vehicle (EV) sales are growing rapidly. Morgan Stanley analysts suggest that EVs will represent at least 25 percent of the global fleet by 2030, up from a small percentage of all cars on the road today.
At the heart of every EV is a high-performance rechargeable battery. While there are various types, the lithium-ion battery has emerged as the clear favorite for performance and durability. So, with the skyrocketing demand for EVs comes an equal demand for batteries — and thus the lithium required to produce them.
Currently, lithium supply easily satisfies demand, but over the coming decade, that is likely to flip as demand increases tenfold. The result is that both the United States and the world will need to ramp up lithium production in order to satisfy the growing demand for EVs.
The good news is that there is plenty of lithium to be mined — here and abroad. Currently the U.S. has substantial reserves — reliable estimates say as much as 10 percent of the world’s total reserves, although the exact amount is still unproven — but has only one large-scale mine producing less than 2 percent of the world’s lithium. Australia, South America and China actually produce most of the world’s lithium.
Companies in the U.S. and around the world have mastered lithium extraction techniques and are constantly making improvements in efficiencies and worker safety. Getting the lithium is not the problem.
The challenge is that, to date, lithium production has required moving large amounts of dirt and rocks, and consuming millions of gallons of water to extract this precious resource. The process has often unsettled local ecosystems, threatened endangered species and disrupted nearby communities.
Developing new lithium requires a delicate balancing act. We need lithium to produce EVs and thus address climate change. At the same time, activists, car buyers, auto manufacturers and investors all want mining to occur without causing environmental or community problems.
Traditional and modern approaches
The light metal is generally found either in underground deposits of clay, in mineral ore or underground pockets of water. Commonly, extracting lithium from these deposits involves two methods. One is building a mine, extracting the clay or ore, and separating the metal through a complex process. The second is to pump underground water deposits to the surface. The resulting pools of briny liquid are left to evaporate, and lithium is removed from the dried salts that remain.
The first process has often involved displacing thousands of acres of dirt and rock (known as overburden material), disrupting nearby land and eradicating plant life. The second process may consume huge quantities of fresh water — often sourced from wells, streams or aquifers that are also used for farming or drinking water, itself a precious resource in the arid regions where lithium deposits are found.
In addition to environmental concerns there is the impact on local communities. Large earth-moving equipment has invaded quiet, out-of-the-way towns, and sprawling cattle farms have had new mountains of clay and dirt impede their livestock grazing area and water supply.
Extracting lithium no longer has to have as big a footprint nor consume as much water as in the past.
But there are major advances that could help mitigate land disruption, environmental impact and water use, and there are also risk management technologies that mining companies can use to manage community relations and related risks better. Direct lithium extraction, a new method, uses almost no water. Another method employs naturally occurring underground steam instead of outside supplies of water. And a third immerses reusable ion-exchange beads to extract the dissolved metal from the salty brines below the surface.
Improving information and education
Still, improving extraction techniques is just one step to ramping up lithium production, and attracting investors and customers. Managing, educating and getting buy-in from all the stakeholders is a critical path to success.
Here are some ways the key stakeholders can be kept in the loop about a lithium-production project, thus reducing the project’s social and community-based risks.
Environmental concerns. Extracting lithium no longer has to have as big a footprint nor consume as much water as in the past. There are also strict regulations and compliance issues to consider. Lithium producers need to communicate these facts, and the processes need to be abundantly transparent. Unless convinced otherwise, opponents will assume producers are employing the old, polluting ways. Producers should clearly and publicly spell out their initiatives and goals — including clear plans for reporting and accountability. If you can't demonstrate good environmental practices before you begin, while you are operating and after you have closed down a site, opposition will be fierce.
Community relations. It’s critical to consider the setting of a mine. For example, what communities are in close proximity and how might they be disrupted? Identify the local stakeholders and engage them. Listen to the community and address their concerns. Opinions of stakeholders are more important than ever. Quite often the biggest opponent to a project is a person who felt they weren’t consulted well enough.
Stakeholder management. Most important is to carefully manage all this information and build a process for providing transparency and accountability. Record community meetings, understand the project’s opponents, hear grievances and address them. Create a central management system where data can be stored securely and accessed easily. Understand what your material risks are — doing so can help in addressing requests for environmental, safety and governance (ESG) information. If someone requests an environmental study, provide it. If an opposition group has questions about the plan, invite them in and share the plan — in full detail, with full transparency.
The safety and treatment of employees is also a key component. Don’t add unneeded fuel to opposition’s fire by not treating your workers properly. Additionally, investors and end buyers won’t want to be involved if there is likely to be controversy and if the process isn’t transparent.
Ultimately, your goal of stakeholder engagement is this: Do the right thing and let everyone know that you are doing the right thing. Because doing what is right can also be right for business.
The views expressed in this article are solely the opinion of the author.