Upstream

On a road in Shenzhen, taxis with green number plates hurry to collect customers. In a parking space in Hamburg, a family plugs in their car to charge for the night. In Surat, electric buses pause by the roadside to pick up passengers.

From behind the wheel of today’s modern electric vehicles (EVs), it’s easy to forget that one of the key components is often sourced from an unlikely place: a hole in the ground in Western Australia.

To some, the setting may sound unremarkable. But the element excavated here – lithium – is set to play a key role in powering the vast fleet of EVs needed in the decades to come.

Already used in laptops and phones, lithium’s light weight and high energy density make it perfect for creating the high-performing batteries crucial to this new generation of vehicles.

But the mass adoption of EVs, which some hope will reduce transport emissions, doesn’t just require an increase in lithium supply. It also needs a robust supply chain to turn minerals from one location into a battery supply pack which can power cars around the world.

Mainstream

Spodumene is striking to look at: crystalline and often tinged with streaks of pink, yellow and purple. But as a hard rock, it doesn’t have much practical use. 

A complex, energy-intensive series of chemical processes are needed to draw out the pure lithium it contains.

Most of these processes happen in China, home to over 60 per cent of the world’s refining capacity.

China also has a significant position in the next stage of the process.

After it’s extracted, lithium is transformed into thin wafers and combined with other materials, such as copper, manganese or nickel, to make the cathodes that are fitted into each EV battery cell.

Second life

Even after cars have been shipped to customers, the lithium journey is not complete. Lithium-ion batteries can be depleted and recharged thousands of times without losing significant capacity, making them ideal for delivering reliable vehicle range.

But their lifespan is not infinite. Most are expected to fall below EV performance standards within 10 years.

Yet they can still be put to good use. For example, by combining thousands of ex-EV batteries, it’s possible to create large-scale grid storage solutions, which have lower performance demands.

These store energy to be released into a power grid as it’s needed and can provide a reliable source to complement more intermittent renewable energy installations.

Research estimates this so-called ‘second life’ supply could hit 200 gigawatt-hours per year by 2030.

“We’re now involved in transactions right the way through that value chain, including end-of-life recycling,” says Ben Daly, Global Head of Transition Finance at Standard Chartered.

Old batteries can also be directly recycled by breaking open the packs, extracting the valuable metals within, and placing them back into the supply chain. This can help meet demand while reducing dependence on mining.

However, this type of recycling is an energy-intensive process, and a relatively new venture for many firms. Boosting this ‘circular economy’ therefore requires significant investment to improve efficiency and cost-effectiveness. 

“The challenge of mining’s disruptive nature is well-known – although there are tools we use to help manage this, including those offered by industry bodies such as the International Council on Mining and Metals,” says Claire Orton, Global Head of Environment and Social Risk Management at Standard Chartered.

“As the world continues to respond to demand for critical minerals, there is a need to think carefully about the trade-offs, and seek to limit any negative impact on people, communities and the environment as much as possible.”