Lithium is one of the most in-demand commodities in the world today.
With the ongoing shift to electric vehicles (EVs) and clean energy technologies, governments and EV manufacturers are rushing to secure their supply chains as demand for lithium soars.
But while China has a strong foothold in the lithium race, the U.S. is lagging behind.
Global lithium production more than doubled in the last four years to 82,000 metric tons in 2020, up from 38,000 metric tons in 2016. Here are some of the factors driving the lithium rush:
Although the demand for lithium is rising globally, its supply chain from mines to batteries relies on a only few critical nations.
In 2020, Australia, Chile, and China collectively made up 88% of global lithium production. After mining, the lithium supply chain involves refining, processing, and packaging the lithium into batteries—and the majority of this occurs in China.
In 2019, China produced 80% of the world’s refined battery chemicals, in addition to 73% of lithium-ion battery cells. What’s more, of the 200 battery megafactories in the pipeline to 2030, 148 are in China. As a result, China is far ahead of other countries in the race for lithium and batteries.
On the other hand, the U.S. is heavily reliant on imports for its supply of lithium, with only one lithium-producing mine in the country. As demand increases, this lack of production could threaten U.S. energy independence in the future. To address this and gaps in the supply of other critical minerals, U.S. President Biden also signed an executive order aiming to build secure supply chains for strategic minerals.
But where is lithium in the United States?
Nevada is known as the Silver State for its rich history of silver mining. Today, it’s the only source of lithium production in the U.S.
Clayton Valley and Kings Valley, two of the country’s largest lithium deposits, are in Nevada. The country’s only producing mine, Albemarle’s Silver Peak Mine, produces around 5,000 tonnes of lithium every year in Clayton Valley. Furthermore, the region is among the world’s richest closed-basin brine deposits based on grade and tonnage.
In addition to a rich lithium deposit, mining companies in Clayton Valley can also reap the advantages of Nevada as a jurisdiction. These include access to infrastructure, a skilled mining workforce, and proximity to a battery manufacturing base with Tesla Gigafactory 1. But that’s not all—in 2020, the Fraser Institute gave Nevada the top spot for mining investment attractiveness globally.
As countries work to expand EV adoption, critical battery metals like lithium are becoming geopolitically significant, and their supply could redefine energy independence going forward. For this reason, the U.S., EU, and Canada all have lithium on their list of minerals that are critical to national security.
The U.S. needs to build a domestic lithium supply chain from the ground up, and Nevada has the potential to support it with lithium in Clayton Valley.
(This article first appeared in the Visual Capitalist)