Reports related to this article:
Project(s): View 5 related projects in PECWeb
Plant(s): View 4 related plants in PECWeb
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Incentives outlined in the U.S. Inflation Reduction Act already are making a dent in breaking foreign dependencies on the essential materials of tomorrow, with electric vehicle leader Tesla Incorporated (NASDAQ:TSLA) (Austin, Texas) getting in on the lithium game.
Tesla planted a flag of sorts in Texas by breaking ground for a facility near Corpus Christi that can make battery-grade lithium hydroxide, which will be one of the few domestic plants making the essential electric vehicle (EV) component.
Production at the $375 million lithium refinery could begin within a year. In some aspects, that's a $375 million down payment on a race against China, the world's second-largest economy after the United States.
Chinese policy is supportive enough to lithium to create global dependencies, a risk that emerged as a major energy concern after the outbreak of war in Ukraine.
"Lithium-based energy storage will be one of the key technologies of the 21st century," an industry report from lithium advocate Li-Bridge read. "Lithium batteries will power the majority of vehicles manufactured over the next 50 years and will be essential to military systems, power grids - which are increasingly reliant on variable, renewable energy - and all manner of consumer, medical, and industrial electronics."
Should a major national power have a monopoly over lithium, the geopolitics of the future would move on their whims. So far, the production of battery-grade lithium hydroxide is concentrated in China, which also dominates much of the supply chain for lithium-ion batteries.
If the Cold War is alive and well and running through pipelines and regasification terminals in Europe, then the new front of geopolitical conflict will be steeped in lithium.
The Inflation Reduction Act (IRA) could help address that challenge for the United States. At least 40% of the critical materials used in EV batteries need to come from countries that have a free trade agreement with the United States or come from U.S. miners and recycling plants. That increases 10% each calendar year until it reaches a maximum of 80% in 2027.
From Canada, a free-trade country, Electra Battery Materials Corporation (NASDAQ:ELBM) (Toronto, Ontario) said it's been able to recover lithium during the recycling process at a refinery near Toronto. Piedmont Lithium Incorporated (NASDAQ:PLL) (Belmont, North Carolina), meanwhile, has plans to have a lithium hydroxide plant in production in Tennessee by 2025, adding to a growing list of developments across North America.
Joe Govreau, vice president for Metals & Minerals research at Industrial Info Resources, said "Tesla's project is one of four lithium hydroxide refineries being planned in the U.S. at a cost of $2.4 billion. Others are being planned by Albemarle (Charlotte, North Carolina), Lithium Americas (NYSE:LAC) (Vancouver, British Columbia) and Piedmont Lithium. If all are built it would bring online around 120,000 tons per year of lithium hydroxide capacity."
Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for related project reports.
That's supportive for the North American supply chain given that none of the critical minerals used in batteries can be mined or processed in China by 2025, according to the provisions of the IRA.
"These policies are intended to shift activity from China by supporting growth of domestic EV and lithium-ion battery supply chains," economists at the Dallas Fed wrote. "This provides benefits to companies such as Tesla as well as to those geographic areas able to attract the new investment and to consumers who can access the EV-purchase subsidies."
The world is changing. China recently helped broker a détente between arch rivals Iran and Saudi Arabia, showing Beijing abhors the vacuum left by waning U.S. strategic interest in the Middle East. That interest has faded with the advent of U.S. crude oil and, more recently, liquefied natural gas.
What's troubling for the U.S. economy and U.S. geopolitics is that, according to Li-Bridge, lithium competitors have a 10-year head start.
"The lack of a substantial lithium battery supply chain in the United States and the lack of secure access to energy materials pose serious threats to U.S. national and economic security," Li-Bridge said.
It may be too early to determine if any lessons from past energy and geopolitical pivots were learned. It's not unreasonable to assume a lithium cartel emerges to rival the Organization of Petroleum Exporting Countries, and bring with it all of the power struggles that arise as a result. But while trends such as Tesla's ambitions in Corpus Christi change the tone, it may be a case of progress before perfection.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Tesla planted a flag of sorts in Texas by breaking ground for a facility near Corpus Christi that can make battery-grade lithium hydroxide, which will be one of the few domestic plants making the essential electric vehicle (EV) component.
Production at the $375 million lithium refinery could begin within a year. In some aspects, that's a $375 million down payment on a race against China, the world's second-largest economy after the United States.
Chinese policy is supportive enough to lithium to create global dependencies, a risk that emerged as a major energy concern after the outbreak of war in Ukraine.
"Lithium-based energy storage will be one of the key technologies of the 21st century," an industry report from lithium advocate Li-Bridge read. "Lithium batteries will power the majority of vehicles manufactured over the next 50 years and will be essential to military systems, power grids - which are increasingly reliant on variable, renewable energy - and all manner of consumer, medical, and industrial electronics."
Should a major national power have a monopoly over lithium, the geopolitics of the future would move on their whims. So far, the production of battery-grade lithium hydroxide is concentrated in China, which also dominates much of the supply chain for lithium-ion batteries.
If the Cold War is alive and well and running through pipelines and regasification terminals in Europe, then the new front of geopolitical conflict will be steeped in lithium.
The Inflation Reduction Act (IRA) could help address that challenge for the United States. At least 40% of the critical materials used in EV batteries need to come from countries that have a free trade agreement with the United States or come from U.S. miners and recycling plants. That increases 10% each calendar year until it reaches a maximum of 80% in 2027.
From Canada, a free-trade country, Electra Battery Materials Corporation (NASDAQ:ELBM) (Toronto, Ontario) said it's been able to recover lithium during the recycling process at a refinery near Toronto. Piedmont Lithium Incorporated (NASDAQ:PLL) (Belmont, North Carolina), meanwhile, has plans to have a lithium hydroxide plant in production in Tennessee by 2025, adding to a growing list of developments across North America.
Joe Govreau, vice president for Metals & Minerals research at Industrial Info Resources, said "Tesla's project is one of four lithium hydroxide refineries being planned in the U.S. at a cost of $2.4 billion. Others are being planned by Albemarle (Charlotte, North Carolina), Lithium Americas (NYSE:LAC) (Vancouver, British Columbia) and Piedmont Lithium. If all are built it would bring online around 120,000 tons per year of lithium hydroxide capacity."
Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for related project reports.
That's supportive for the North American supply chain given that none of the critical minerals used in batteries can be mined or processed in China by 2025, according to the provisions of the IRA.
"These policies are intended to shift activity from China by supporting growth of domestic EV and lithium-ion battery supply chains," economists at the Dallas Fed wrote. "This provides benefits to companies such as Tesla as well as to those geographic areas able to attract the new investment and to consumers who can access the EV-purchase subsidies."
The world is changing. China recently helped broker a détente between arch rivals Iran and Saudi Arabia, showing Beijing abhors the vacuum left by waning U.S. strategic interest in the Middle East. That interest has faded with the advent of U.S. crude oil and, more recently, liquefied natural gas.
What's troubling for the U.S. economy and U.S. geopolitics is that, according to Li-Bridge, lithium competitors have a 10-year head start.
"The lack of a substantial lithium battery supply chain in the United States and the lack of secure access to energy materials pose serious threats to U.S. national and economic security," Li-Bridge said.
It may be too early to determine if any lessons from past energy and geopolitical pivots were learned. It's not unreasonable to assume a lithium cartel emerges to rival the Organization of Petroleum Exporting Countries, and bring with it all of the power struggles that arise as a result. But while trends such as Tesla's ambitions in Corpus Christi change the tone, it may be a case of progress before perfection.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
