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ECONOMY | 13-01-2022 16:06

Europe eyes lithium 'white gold' rush as cars go green

Europe is seeking to expand its lithium mining and refining capacity and wean itself off imports as the "white gold" becomes a vital resource in the fight against climate change.

Europe is seeking to expand its lithium mining and refining capacity and wean itself off imports as the "white gold" becomes a vital resource in the fight against climate change.

Alongside nickel and cobalt, lithium allows electricity to be stored and transported, making them essential in electric battery production as car manufacturers move away from polluting fossil fuels.

But Europe mostly depends on external sources for the strategically important and increasingly coveted metals.

Australia is the world's biggest lithium producer, while China is home to 60 percent of global lithium refining, transforming the metal into carbonate or lithium hydroxide.

The increasingly urgent subject was on the agenda of EU ministers and officials at a conference in Paris on Thursday. It will also be the menu when EU industry ministers gather in the northern French city of Lens on January 31 and February 1.

Europe "really is not on the map" when it comes to mining or processing lithium, according to Robert Colbourn, an analyst at Benchmark Mineral Intelligence.

"There are a lot of lithium mines in development today in Europe, or projects trying to come online, but really there is no lithium production" of battery quality, he told AFP.

The International Energy Agency predicts global demand for lithium will be 40 times greater by 2040, with 475,000 tonnes of lithium produced in 2021.

But Europe will not even meet more than 30 percent of its lithium, nickel and cobalt needs in 2030, according to a report submitted to the French government this week.

"Our forecast is that by 2030 Europe is probably going to need over 500,000 tons of lithium a year, which is bigger than the world market today," said Colbourn, adding that battery production was driving the soaring demand.

The European Union recently added lithium to its list of critical metals.

With plans for at least 38 new electric battery plants in Europe, the question of supplying them with the necessary metals is far from being resolved.

"We need very strong measures. The idea for the 27 is not to go from depending on oil to depending on metals," said a source at France's Economy Ministry. "We depend far too much on external powers, especially China."


Embarrassment of riches?

Europe does not lack the coveted raw materials, with deposits in France, Germany, Portugal, the Czech Republic and Serbia.

The French government has set aside a budget worth one billion euros and launched tenders to extract or refine lithium, cobalt, nickel and iridium.

French mining company Eramet has also extracted lithium from geothermal brine in Alsace, eastern France, a technological breakthrough that could open up further exploration in the River Rhine basin.

An Australian mining group says it produces carbon-neutral lithium in Germany under the Vulcan brand, which has attracted car giants Renault and Stellantis.

Germany will also host a refinery in 2024 built by Canadian group Rock Tech Lithium.

In Portugal, a lithium refinery led by Portuguese oil company Galp Energia and Swedish battery manufacturer Northvolt has just been announced.

But NGOs and scientists have warned of the environmental impact of increased mining activity.

Anglo-Australian mining giant Rio Tinto, which has financed mining exploration studies in Serbia since 2004, faced protests in the Balkan nation in December as demonstrators demanded reports on the project's environmental impact be published.

Portugal's environmental regulator is also due to rule on a lithium mining project in the north of the country.

France's ecological transition minister Barbara Pompili has said the country should "rule out nothing" regarding extraction if it is environmentally sound.


Lithium triangle

Europe could also increase its South American lithium sources. Argentina, Bolivia and Chile form a "lithium triangle" that is the world's second-largest producer of the valuable metal.

Eramet said it would open a plant in Argentina in 2024 with Chinese firm Tsingshan, with Eramet chief executive Christel Bories saying it would meet 15 percent of Europe's lithium needs.

Chile, which was the world's top lithium producer until 2016, on Thursday granted an exploration and production concession to a Chinese and a Chilean firm.

Each company will be allocated 80,000 tonnes of lithium as Chile hopes to regain its leading place on the global stage.

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by Isabel Malsang, AFP


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