Sustainability: Sourcing the lowest carbon lithium for Europe’s battery sector

Posted 4th May 2021 in  Industry news.
By Dominic Wells

With Europe striving to develop a supply chain for its EV manufacturing capacity, sustainability garnering increasing focus, and with limited domestic supply options currently in operation, what are the sources of low-carbon lithium that Europe can tap?

The European battery-chain continues to show an increased preference for battery-quality lithium hydroxide, over lithium carbonate; although some entry-level models may utilise chemistries more tailored towards lithium carbonate. But with lithium hydroxide having a higher CO₂ intensity than carbonate on a comparable basis, a low-carbon source of supply is even more critical. This was recently highlighted after Johnson Matthey signed an agreement with SQM to supply lithium hydroxide from its Salar del Carmen plant in Chile.

Currently, lithium hydroxide is sourced from two main routes, (i) refined directly from spodumene concentrate or (ii) converted from lithium carbonate. Worldwide there are several production routes by which refined lithium hydroxide could be supplied to the European market. Each route makes use of different refining centres, feedstock types and methods, energy mixtures in its energy consumption, and production methods. In addition, these routes come with varying transport emissions due to the nature of the transport method, distance products must travel, and volume of material transported.

The analysis contained within this article examines six different routes by which the European market could source lithium hydroxide. It includes typical mineral and brine production routes used in 2021, modifications to already-existing supply chains, and the development of on-shore lithium hydroxide refining capacity in Europe from lithium carbonate and spodumene feedstocks. This is to show Orocobre’s CO₂ intensity compared to existing and potential future supply chains. The scenarios are:

1. Chilean brine extraction and processing, refined domestically within Chile to a lithium hydroxide product and shipped to the European market.
2. Argentine brine extraction and lithium carbonate production, this is then transported to a European refining facility and converted to a lithium hydroxide product for the European market.
3. Australian spodumene mined and refined domestically to a lithium hydroxide product and then shipped to the European market.
4. Chinese brine refined to a lithium carbonate product domestically, then transported internally within the country to lithium hydroxide refining facility, refined to a lithium hydroxide product and shipped to the European market.
5. Australian ore extracted and processed to a spodumene concentrate feedstock. This is then shipped to Europe and refined to a lithium hydroxide product for the European market.
6. Australian ore extracted and processed to a spodumene concentrate feedstock. This is then shipped to China and refined to a lithium hydroxide product, and then shipped to the European market.

The figure below shows the various stages undertaken within each supply route.

The purpose of this is to determine which lithium hydroxide production routes, whether already in production or feasible within the future, would be the most efficient from a CO₂ perspective.

The figure below shows the expected carbon footprint of these major lithium production routes for lithium hydroxide that could service the European market.

Traditional spodumene refining routes, such as those shipping Australian feedstock to Chinese refineries, are expected to remain the highest carbon producers in the sector, due to their reliance on Chinese refining capacity (with its heavy coal use), the requirement to ship large volumes of mineral feedstocks internationally, and then the requirement to further ship refined material some 30,000km to Europe for use. Bypassing the need to refine spodumene in China and replacing it with European refining capacity, would lower the carbon footprint marginally, however, the requirement to ship large volumes of Australian spodumene feedstock to Europe (22,,500 km from Australia to Europe, versus 6,000-9,000km to China) would mean this production route would be amon the higher intensity routes to LiOH production for the European market. When Australian domestic LiOH refining capacity comes online, this could provide a reduced CO₂ intensity route for LiOH for the European market, due to the reduced volumes of transported material and greater reliance on natural gas-based refineries (versus coal) in Western Australia.

As such, South American brine producers are among the lowest intensity producers in the sector, due to their integrated refining structure, the requirement to only ship a high lithium content refined product, and a reliance on more efficient fuels, such as natural gas, throughout the supply chain.

European manufacturers, driven by the newly introduced legislation and regulation around carbon emission, are some of the most aggressive companies in delivering sustainability to their supply chains. We anticipate that demand increase in Europe, coupled with a greater requirement for low-CO₂ products, stands to benefit South American brine producers and projects.

Roskill’s Sustainability and Cost Analysis research examines the key environmental, social and governance (ESG) factors facing commodity supply chains as well as providing a detailed understanding of the costs involved in the extraction of ore through to the production of a refined metal or chemical. Click here to find out more.