Does lithium have a green future? Building sustainable and resilient supply chains with direct lithium extraction and battery recycling
By Max Werny, Yair Reem, Iris ten Have, and Fernanda Bartels
The protagonist of this article series needs no introduction — the lithium frenzy is a tale already known far and wide. But what often remains unexplored are the aspects of environmental impact and supply chain resilience. In this article, we dive into how this light but mighty element may be sourced more sustainably at scale. Join us as we unravel some of the leading lithium extraction and recycling technologies that promise a greener, more resilient future for the lithium industry.
Lithium is the lightest metal on our planet and is used to make ceramics, glass, and lubricants. Its most important application, however, lies in producing lithium-ion batteries. These are widely used in electric vehicles (EVs), portable electronic devices, and energy storage. To meet the demand in 2040, global lithium production will have to increase by an incredible 40x. So how can we accommodate this massive surge in demand?
The good news is that, with approximately 89 million tonnes of resources known to mankind, lithium is not a scarce or critical metal. We simply need to mine and extract more of it and this at unprecedented scales. Sounds like a big task? It is. But it also represents an opportunity to redefine the lithium supply chain. Essentially, this means reducing the overall toll of the lithium industry on the environment while also making it more resilient to market dynamics.
Lithium is currently extracted from hard rock minerals and brines. Both approaches, unfortunately, have significant environmental footprints, amounting to around 162 Mt CO2e per year by 2050 if we continue business as usual. Emerging technologies, such as direct lithium extraction (DLE) and battery recycling, are well positioned to change this by unlocking new resources and enabling lithium production to be scaled in a sustainable, cost- and energy-efficient manner.
Ready to dive into the topic? Similar to our previous works, we have divided this industry insight on lithium into three parts — a main article, giving you the ‘big picture’, and two more in-depth sub-articles on the market opportunity and relevant technologies. The technologies sub-article, which focuses on DLE and battery recycling, outlines current state-of-the-art technologies and includes competitive landscape maps with the most promising companies in the two spaces.
The market opportunity: lithium demand will increase over 40x by 2040 due to EV adoption and energy storage needs
For more detailed insights into the market opportunity, go to the first sub-article of this series.
Due to the increasing use of electric vehicles (EVs) in China, Europe, and the United States (with a projected 40% electrification of light vehicles by 2030) and a growing demand for grid storage applications, the global need for lithium is set to surge. From 0.72 million tonnes (Mt) of lithium carbonate equivalent (LCE, denotes all forms of lithium) in 2022, it is estimated to reach 3.06 Mt LCE in 2030, indicating a substantial 20% annual growth rate.
To meet the anticipated demand in 2030, 1.42 Mt LCE will be required on top of the 0.75 Mt LCE of existing annual supply and 0.89 Mt LCE from planned and probable projects. Considering this substantial growth in lithium demand — more than 3x by 2030 and more than 40x by 2040 — it is important to confront ourselves with the following questions: Where are we going to get all the lithium from to meet the world’s seemingly insatiable appetite? How are we going to source it sustainably? Luckily, there are already a couple of solutions in the making.
Where can lithium be found and where do we get it from?
Lithium can be found in the form of brines (highly concentrated salt solutions containing dissolved metal ions), hard rock (e.g. spodumene) and clays. Brines make up approximately 66% of the world’s lithium resources but only account for around 39% of production. Ores, on the other hand, represent around 25% of global resources and close to 60% of production.
In general, there is significant untapped potential and room for exploration in the area of brine-based lithium extraction. Despite their abundant presence, brines are underutilised in current production practices. Extensive investments in this area will unlock their full potential and help us meet the growing demand for lithium.
How is lithium currently won?
Hard rock
Each type of lithium source comes with its own challenges and requires different mining or extraction processes. Let us first look at ore or hard rock mining. Lithium-rich ores are processed via acid roasting, an energy-intensive process that involves subjecting the ore to high temperatures (1100 °C) and concentrated acids.
Hard rock mining and refining projects possess several advantages in comparison to brine-based extraction methods. Most notably, they boast shorter project development and processing times. These attributes make hard rock mining an efficient and scalable option. However, these benefits also come with major drawbacks. One significant concern is the high emissions associated with hard rock mining, as is particularly evident for spodumene extraction, with emissions reaching 15 tonnes (t) of CO2 per tonne of lithium carbonate equivalent (LCE). Additionally, despite the efficiency gains, hard rock mining tends to yield lower profit margins.
Brines
While extracting lithium from brines through solar evaporation and chemical precipitation offers certain advantages, such as lower emissions (5 t CO2/t LCE), competitive production costs, and higher profit margins, it is also not without significant drawbacks. It relies on slow evaporation and precipitation processes, resulting in long processing times ranging from 12 to 18 months. More than 40% of the lithium is lost during these procedures, significantly impacting the overall yield. The substantial land area required due to evaporation costs poses a further challenge, and the method’s high water usage contributes to environmental concerns. All in all, the extended processing times, land and water requirements, as well as lithium losses underline the need to carefully consider the overall sustainability and efficiency of traditional brine projects.
How can lithium be sourced more sustainably?
Direct lithium extraction (DLE)
Direct lithium extraction (DLE), on the other hand, has the potential to become a game changer for the industry as it avoids several of the above mentioned limitations. With the help of chemical process technologies, brines can be processed within days at competitive costs and a lower environmental footprint than traditional brine operations. From a CAPEX perspective, DLE projects are expected to be in a similar range as traditional pond projects. Any higher upfront capital intensity of a DLE plant can be offset by its improved unit economics. These are associated with the high lithium recovery rates that are expected for DLE.
Battery recycling
Apart from extracting more lithium through optimised mining and refining processes, we also need to utilise the resources that we already have. Recycling represents an alternative pathway to extract lithium and other valuable materials from end-of-life lithium-ion batteries and manufacturing scrap, especially for countries and geographies with a lack of resources or established extraction projects (e.g. Europe). From an environmental point of view, battery recycling saves huge amounts of CO2. Recycled raw materials have a CO2 footprint of 8 kg CO2e/kWh relative to 29 kg CO2e/kWh for virgin raw materials, which represents a 72% reduction. Recycling is expected to be profitable, too. By 2025, recycling could yield approximately €550 per tonne of battery material.
Despite current battery recycling rates only amounting to around 5%, end-of-life lithium-ion batteries are expected to feature more prominently as a secondary source of lithium soon, potentially contributing around 6% of total lithium production by 2030. According to a recent study by McKinsey, the global supply of recyclable battery material will increase significantly over the next two decades at a rate of 25% per annum. Until 2030, manufacturing scrap from battery gigafactories will form a large share of the available material. From there onwards, the first wave of end-of-life batteries will take over, pushing the global supply of recyclable materials to unprecedented levels. In Europe alone, 5950 kt of recyclable battery material (1 TWh) will become available by 2040 — a 10-fold increase compared to 2030. At a global level, recycled materials could contribute between 30% and 60% to battery cell production by 2040.
The technology overview: closing the lithium supply gap with direct lithium extraction (DLE) and battery recycling
For more detailed insights into direct lithium extraction and battery recycling technologies, go to the second sub-article of this series.
The game changer — direct lithium extraction (DLE)
The increasing demand for lithium, together with growing environmental awareness, has stimulated researchers, entrepreneurs, corporates and governments to develop technologies that can directly extract lithium from brines without the need for time- and space-consuming evaporation ponds. These are collectively referred to as direct lithium extraction (DLE) technologies. In DLE, lithium is extracted from the brine in a single-stage chemical process in the space of hours or days. The lithium-free eluate is then ideally reinjected, thereby significantly reducing the water consumption of the process.
DLE technologies not only facilitate a faster, more efficient, and cheaper extraction of lithium from more concentrated brines in salars, salt lakes and geothermal operations, but can also process oil and gas brines and groundwater brines. These have lithium concentrations of only several tens to a few hundreds parts per million (ppm) of lithium and are still largely untapped. Five chemical technologies will be at the forefront of the DLE industry in the years to come: adsorption, ion exchange, solvent extraction, membrane separation and electrochemical separation/refining. Check out the summaries below to get a better understanding for what these technologies are all about:
Adsorption
One of the technologically most established routes for DLE from a brine is the physical adsorption of lithium chloride (LiCl) onto a solid sorbent. A stripping solution, usually warm or hot water, is used to desorb the LiCl from the sorbent.
Ion exchange
A second pathway for DLE that is relatively mature uses ion exchange technology. Here, lithium ions (Li+) from a brine are chemically bound by a solid ion-exchange sorbent. The lithium ions are then exchanged with other positively charged ions from a stripping solution (e.g. H+ from hydrochloric acid, HCl).
Solvent extraction
The third pathway uses a solvent to extract lithium instead of a solid sorbent. Lithium ions (Li+) or lithium chloride (LiCl) is extracted from a brine into an organic solution, typically containing kerosene and an extractant.
(Electro-)membrane separation
The fourth DLE process uses a lithium-selective membrane to extract lithium from brines. Specific sub-categories include nanofiltration, reverse osmosis or electrodialysis. In most cases, membranes are used for upstream pre-concentration or post-DLE purification. Novel electrodialysis technologies are now also targeting the DLE process step.
Electrochemical separation or refining
The fifth and last DLE technology uses electrochemical principles to extract lithium. For example, reversible electrochemical reactions at electrodes (intercalation chemistry, like in a lithium-ion battery) or electrolysis. The latter is usually employed for lithium refining (i.e. purification) and/or downstream processing of lithium compounds.
Who are the main players?
Various technology providers and mining companies are working hard behind the scenes to bring DLE technologies to market. A majority of these companies are specialised in adsorption and ion exchange sorbent technologies, which, at this point in time, are starting to approach full technological maturity. While companies such as Livent and Sunresin have already established their respective sorbent technologies at commercial or pre-commercial scales, several promising technologies, such as electrochemical cells and more energy-efficient electrodialysis technologies, are still under development.
Closing the loop — Battery recycling
In contrast to direct lithium extraction (DLE), which will unlock a variety of untapped brine resources, battery recycling will open up another type of lithium resource — end-of-life batteries. As discussed above, lithium that is recovered this way has a significantly lower environmental footprint. Currently, there are four main technologies for battery recycling:
Pyrometallurgy
The most established battery recycling technology, pyrometallurgy, involves the thermal treatment of whole or shredded lithium-ion batteries to form an alloy containing cobalt (Co), nickel (Ni), and copper (Cu). Lithium (Li), aluminium (Al), manganese (Mn) and silicon (Si) are separated as a slag. Both the alloy and the slag need to be refined by means of hydrometallurgy to recover the individual metals.
Hydrometallurgy
In hydrometallurgy, black mass or lithium-ion batteries are treated with acid to leach the metals into solution. The dissolved metals are then precipitated sequentially and isolated as battery-grade salts.
Direct recycling
The term direct recycling is often used to describe the thermal regeneration of cathode active materials (CAMs) with lithium-containing compounds after their separation from the black mass.
Electrochemical
Electrochemical processes are complementary to hydrometallurgy. An electrical current is either applied to regulate the flow of dissolved metal ions from a leaching solution through a conductive membrane (electro-filtration) or to deposit the ions as solid metal on a substrate (electroplating or electro-extraction).
Who are the main players?
Hydrometallurgy is gaining a huge amount of traction in the world of battery recycling due to its superior performance versus pyrometallurgy. Several large corporates in the US and Europe already use hydrometallurgy at (pre-)commercial scales. That being said, most hydrometallurgy processes are not perfect and in need of further optimisation. The less mature route of direct recycling is currently only being pursued by a handful of companies but will presumably become more widely adopted in the near future, given its potentially higher recycling efficiencies, cost-effectiveness, lower environmental footprint, energy efficiency and compatibility with disassembly and demanufacturing approaches.
The future of the lithium industry: challenges and opportunities
To avoid a supply gap by 2030, significant additional investments into lithium extraction, recycling and mining technologies are required. Rather than focusing on extensive exploration, which can be time-intensive in the case of traditional mining operations, investments need to be directed towards the utilisation of known brine reserves, as well as end-of-life batteries and manufacturing scrap. These can deliver lithium quickly, economically and with lower environmental footprints.
A very large number of corporates and startups are already actively working on the commercialisation of DLE and battery recycling technologies. In fact, some DLE players are even considering extending their technologies to the battery recycling space. New players will therefore have to bring disruptive technologies to the table, clearly differentiating themselves with strong KPIs and clear USPs.
Technologically speaking, the current DLE landscape is dominated by players using solid sorbent or ion-exchange materials. Novel technologies, such as electrolytic cells, energy-efficient electrodialysis and bioextraction approaches, have the potential to increase lithium recovery and lower energy inputs as well as costs. In general, the challenges around water consumption and brine reinjection still have to be addressed. The battery recycling industry, on the other hand, has started to move away from pyrometallurgy to hydrometallurgical processes with high recovery rates. Direct recycling approaches, despite their nascency and limited scale, hold great promise for improving recycling efficiencies and reducing costs and process complexity even further. CO2-based and biological extraction methods may also become more established in the years to come.
Keeping in mind that no two brines are the same, versatility will be key for DLE technology providers. Best-in-class DLE technologies will be able to process brines with different lithium concentrations, contaminant levels, temperatures and pH values. When it comes to battery recycling, standout recycling processes need to be able to handle different battery compositions. High recovery rates will need to be achieved for all constituent materials, including lithium and graphite, independent of the battery type.
Even the greatest technologies can fail without the right amount of commercial traction. Technology providers that are active in lithium extraction and refining need to secure commercial agreements with mining companies that have access to lithium reserves. In the battery recycling space, agreements with EV OEMs, battery collection companies and mechanical recyclers that produce black mass are necessary for commercial success, especially in the short term. With battery production scrap representing a considerable input stream in the years to come, recycling plants should be located in close proximity to existing and future battery gigafactories.
While lithium will continue to play a dominant role in the battery industry for years to come, the emergence of cost-efficient sodium-ion batteries could potentially reduce the long-term demand for lithium. Considering the nascency of sodium-ion battery technologies, however, their initial adoption is likely to occur in low-performance applications and segments. In order to facilitate improved recyclability, maximum material recovery rates and extended battery life, battery designs may also be adapted to align with disassembly and direct recycling approaches.
Are you a startup, entrepreneur, corporate or investor looking at this space and have something to add? Then feel free to reach out to us — we are always eager to learn!
