Albemarle wants to Restart a Lithium Mine, as the building block of the First complete Electric Vehicles (EVs) Battery Supply Chain in the U.S.
In Kings Mountain, North Carolina, there’s a tree-filled Park that provides Urbanites from nearby Charlotte some respite in Nature. At its center is a tranquil Pond, featuring Turtles, Fish, and other Wildlife. The sparkling waters, which plunge some 150 feet deep, are the result of Decades of accumulated rainfall in a defunct Lithium Mine. Albemarle Corp., the world’s largest Producer of the silvery white Metal, is on a quest to Restart Operations.
The Project is a crucial Component of a plan by Automakers to create the U.S.’s First complete Supply Chain for EVs Batteries, to reduce their dependence on China. In EVs Batteries, there’s no substitute for Lithium. If the Kings Mountain Mine can proceed, Albemarle envisions processing the Lithium it produces at a Facility the company would open in the U.S. Southeast. And Carmakers including General Motors Co. and Ford Motor Co. have committed to Investing in New Domestic Plants to make EVs Battery Cells. “The industry is looking for a localized supply chain,” says Albemarle Chief Executive Officer Kent Masters. “We’re trying to build the first building blocks for that with lithium.”
The leading Producers of Lithium are: Australia, Chile, and China, respectively. While the U.S. has the Fifth-largest Global Reserves of the Metal, Albemarle’s Small operation in Silver Peak, NEVsada, is the Only Active Lithium Mine in the Country. There are a few other proposed Lithium Mines in the U.S., but the Projects are by Early-stage companies, and they face Environmental Hurdles and Local Opposition. The U.S. also has minimal Lithium processing capacity, and the Country’s EVs Battery manufacturing facilities rely on Imports of materials.
By contrast, China dominates the Global Supply Chain for EVs Batteries, boasting 79% of the World’s Lithium-Ion Battery manufacturing capacity, versus just 5.5% for the U.S., according to Benchmark Mineral Intelligence, an Adviser to Governments on critical Minerals. “Having that dependence on one country, no matter what that country is, makes a lot of governments nervous,” says Andy Miller, Benchmark’s Chief Operating Officer.
Boosting Lithium Mining globally will be paramount to keep pace with the EVs production outlook. Output has been relatively stagnant because of a 2018-20 market slump that undercut Investment in New Projects, but Lithium prices in China are up more than 100% this year as EVs demand surges. In an October Earnings call, Tesla Inc. CEO Elon Musk called Lithium “crazy expensive,” and the company has said that Battery Supply Chain constraints will be the “main limiting factor” to EVs Market growth. Supplies of Lithium need to increase Fivefold by the end of the Decade as the EVs Evalution gets into full swing, according to BloombergNEF.
The Quarry at Albemarle’s Kings Mountain site was a source of Lithium used in the Manhattan Project, the U.S. Government program that built the First Atomic Bombs, and has been idle since the 1980s. The company envisions Reopening the Mine with an initial annual capacity of 50,000 metric tons in 2027, in conjunction with a Facility capable of processing 100,000 tons of Mined Lithium and Recycled Chemical products such as Battery-grade Lithium, Nickel, and Cobalt.
The Pond will need to be drained and Trees pulled out, then Bulldozers, Trucks, Shovels and Conveyors. The white rocks in the Open pit will get blasted. Out will come Nuggets of the Mineral called Spodumene. That igneous rock will get Roasted and Leached with Sulfuric Acid, to EVsentually give way to a Silvery-Gray Residue that will be Transformed into lithium.
“You look at something that’s more like a park and sort of think, ‘How long is it going to take to get that into a large-scale production center?’” says Nick Getaz, a Portfolio Manager at Franklin Equity Group, which owns Albemarle shares. “That illustrates problems not just within the US, but just in general of bringing up the production lEVsels to meet robust demand.”
The biggest hurdle will likely be receiving the necessary Federal, State, and County Approvals. President Biden recently invoked the 1950 Defense Production Act to encourage Domestic output of Critical Materials needed for the Energy Transition, but his Administration has proved fickle when it comes to granting Permits. Ioneer Ltd., a prospective Lithium supplier to Ford and Toyota Motor Corp., has been unable to Develop a Mining Project in Nevada because Public Lands near the Site are Home to the Endangered Wildflower Tiehm’s buckwheat.
Demand for EVs is likely to get a boost from the Inflation Reduction Act recently passed by Congress, which stipulates that EVs purchases can qualify for a $7,500 Tax Credit, as long as their Batteries contain Minerals extracted from or processed in a Country with a Free-Trade Agreement with the U.S. and some Components are Made or Assembled in the U.S.
General Motors is building Four U.S. Battery Cell Plants.
Ford has a Joint Venture with South Korea’s SK Innovation to spend $11.4 billion on Three Battery Factories and an EVs assembly plant in Tennessee and Kentucky.
Volkswagen is looking at setting up an In-House Battery Vell manufacturing Operation in the U.S.
Panasonic, a longtime Battery Supplier to Tesla, has chosen Kansas to build a Battery Factory.
But without a Domestic supply of Lithium for Batteries, “the US is at risk of being left behind,” says Ram Chandrasekaran, Principal Analyst of Transport and Mobility at Consultant Wood Mackenzie Ltd. “We’re seeing a significant shift towards EVs on a scale that has never happened in the past. It’s almost basic common sense that the U.S., has to focus on bringing on some of that supply chain locally so it has better control of it.”
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