Rare Earth Advisory
CRITICAL MATERIALS FOR LITHIUM-ION BATTERIESGENERAL PRINCIPLE OF LITHIUM-ION (LI-ION) BATTERIES
Li-ion batteries have been sold since the beginning of the 1990s and were first made for consumer electronics. They very quickly found new markets and became the standard for all devices requiring a rechargeable and portable battery. It has thereby become the technology of choice for electric vehicles.
The principle of the Li-ion battery consists in making electrons circulate by creating a potential difference between two electrodes, one negative (anode) and the other positive (cathode), immersed in an ionic conductive liquid (electrolyte). Li-ion batteries are generally based on intercalation/deintercalation compounds, where lithium (Li) ions supplied by the cathode are collected in the anode during charging and extracted during the discharge, with minimal structural change in the host material.
WORKING PRINCIPLE OF A LI-ION BATTERY
CRITICAL MATERIALS FOR LITHIUM-ION BATTERIES :
LITHIUM, COBALT, NICKEL, MANGANESE AND GRAPHITE
Cathode Active Materials (CAMs) are the main component of Li-ion batteries. These determine the energy density of a cell by the voltage and/or capacity of the cell. The choice of cathode material with a given chemistry depends on various factors, such as specific energy density, specific power, safety/operating temperature, performance, lifetime and of course the cost. Active cathode materials require extremely high levels of purity and must be almost entirely free of undesirable metallic impurities – including iron, vanadium and sulphur.
There are 5 critical metals and minerals for batteries as Li-ion battery technology currently stands: lithium, cobalt, nickel, manganese (active cathode materials) and graphite (anode), with no real substitutes at this stage. The main active component of the cathode was originally cobalt (LCO). However, cobalt is problematic. The Democratic Republic of Congo accounts for 69% of production and >50% of world reserves. Traceability is poor in the country with children sometimes exploited, and it is expensive. It is now frequently partially substituted by nickel and manganese (NMC) or nickel and aluminium (NCA).
Given the current average power of electric vehicles (54KWh), we estimate that more than 115kg (5% of the weight of an electric vehicle) is required in terms of critical materials per electric vehicle. This need is expected to grow by 2030, as the average power of electric vehicles increases.
GENERIC COMPOSITION OF AN NMC 111 LI-ION BATTERY
once again, china dominates the entire value chain
Although it has little in the way of lithium, cobalt or manganese resources, China has nevertheless managed to extend its dominance to all the materials essential to the battery supply chain. This could potentially jeopardise the electrification plans of Western countries.
Just as in the case of rare earth elements, China’s hegemony in this segment is the result of a long and carefully planned process during which the Chinese authorities have encouraged the development of a downstream processing chain (chemical separation, precursor and cell manufacturing) and promoted mergers and acquisitions. Since 2016, China’s state-owned enterprises have taken control of prominent deposits of cobalt (China Molybdenum) and lithium (Tianqi).
China now accounts for more than 60% of the battery materials supply chain, firmly establishing its leadership in the manufacture of electric vehicles. Our in-depth analysis of existing assets/projects suggests that it will still dominate in 2025, unless nationalistic pressure rises, or financial stress forces some Chinese companies to divest assets.
PREDOMINANCE of china throughout the electric vehicle value chain
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Luc PEZ
Managing Director
Rare Earth Advisory. Consulting. Finance.
Rare Earth Elements and Battery critical raw materials expert.
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