Battery power revolution fuels exploration
Does anyone doubt the eventual disappearance of the internal combustion engine from our roads? To date, battery-powered cars have been little more than a novelty, accounting for a mere one per cent of light duty vehicle sales globally, but that’s going to change. Today, there are approximately 1.3 million electric vehicles on the road – 462,000 of which were sold in 2015, representing a 60 per cent increase over 2014.
By 2022, electric and gasoline powered vehicles are expected to cost the same, and by 2040, the number of battery-powered vehicles on the road will, by some estimates, exceed 40 million, representing 35 per cent of light duty vehicle sales per year and 25 per cent of vehicles on the road.
One of the consequences of this revolution in transportation technology will be the displacement, by 2040, of an estimated13 million barrels of crude oil per day. Instead of pumping crude out of the ground, we’ll be mining and processing lithium, graphite and cobalt.
The exploration industry is fully cognizant of this trend and busy scouring Ontario for these important minerals. In this issue of Sudbury Mining Solutions Journal, we shine a spotlight on Avalon Advanced Materials’ Separation Rapids lithium project near Kenora, Zenyatta Ventures’ Albany Graphite Project northwest of Hearst and the mad dash to acquire property in Cobalt.
In mid-2015, battery grade lithium was selling for $7,000 per tonne on the Chinese spot market. A year later, the price was $20,000 per tonne. By 2021, it’s estimated that Tesla alone will require more than 26,000 tonnes of spherical lithium and 17,000 tonnes of lithium hydroxide per year to produce 300,000 vehicles. This doesn’t include Tesla’s raw material consumption for its Powerwall and Powerpack utility batteries. And Tesla’s much hyped Gigafactory in Nevada is said to be only one of 12 lithium-ion battery megafactories expected to come online in the next few years, seven of which are expected to be in China.
By 2040, 100 Tesla-size battery factories will consume 800,000 tonnes of lithium annually, and that’s not counting all of the other applications for lithium. Currently, according to the United States Geological Survey, global lithium production is approximately 35,000 tonnes with 13,519,000 tonnes in reserves. Based on 100 megafactories and 800,000 tonnes of consumption per year, current reserves account for only 17 years of supply.
It’s much the same story for graphite and cobalt, both of which are also used in battery chemistries. The numbers are dizzying.
All of this is bad news for the Saudis and Alberta, but it’s great news for Northern Ontario – not only for resource extraction, but also for the further processing of the material that will power the world.