'No shortage seen' of battery inputs as manganese comes of age: LME Focus speakers

Shortages of key metals for electric vehicles batteries are unlikely to occur, with the possible exception of nickel, due to changes in battery chemistries and materials used, speakers at the London Metal Exchange's LME Week Focus seminar said Oct. 27.

Manganese, a common mineral typically used in steelmaking, will become the key cathode material moving forward, while battery chemistry changes could lead to altered range performance expectations and changes in infrastructure requirements for the sector, said experts from management consultancy McKinsey and Exawatt, a cost forecaster. .

"We will have more than ample materials for the EVs revolution, firstly because the materials will change," said Ken Hoffman, an expert with McKinsey's Basic Materials Institute. "There is no such thing as long-term mineral deficits." Both cathode and anode changes will occur, he maintained.

"There's a huge move now towards manganese and also towards ultra-thin lithium metal and silicon, and some chemistries may be surpassed by solid state," Hoffman said. "We assume manganese demand to rise from approximately 34,000 mt in 2020 to nearly 360,000 mt in 2030"

Cheaper lithium iron phosphate batteries are now increasingly gaining market share from the more traditional lithium nickel manganese cobalt batteries, the panelists said. Of the two, the LFP batteries contains less lithium than NMC.

Lithium prices more than doubled this year as demand for the light metal for use in EV batteries has continued to grow amid tight demand despite the start of a global economic slowdown.

Platts assessed lithium carbonate down $100/mt on Oct. 25 at $73,900/mt, amid bullish market sentiment, still above the $1,100/mt mark on Oct. 18. Lithium hydroxide was unchanged on the day but was up $300/mt on the week at $80,500/mt. Platts is part of S&P Global.

"We have been concerned about nickel for some time," Hoffman said. "Current chemistry and production makes the world look very short nickel, but this will change. We're pleased about the coming of age of manganese."

Batteries require Class 1 nickel, where a market tightness could potentially occur after 2023, he said.

In addition there will be technological advances to boost production of both nickel and lithium, according to the McKinsey specialist. Direct lithium extraction is being developed as a "clean" alternative to conventional lithium brine production and as much as 3.4 million mt/year of lithium could eventually be brought onto the market by 2030 using improved extraction techniques, he said. Various projects using DLE and similar processes are under development.

In 2014, the world consumed 163,000 mt of lithium, rising to possibly 850,000 mt this year, according to Hoffman.

"A structural deficit is impossible – there's supply and there's demand and they meet at price," he maintained. There could indeed be an oversupply of lithium moving forward, he said.

Range expectations

Simon Price, CEO of Exawatt, a cost forecaster, agreed that lithium demand could rise to 2 million-3 million mt/year in 2030 and that there is no shortage of the light metal, despite the price recently soaring on rapidly increasing demand from battery makers, which has impacted EV battery pack prices.

At the same time, "a widespread transition to LFP would reduce pressure on the lithium supply.... as would increased adoption of sodium-ion batteries," Price said.

EV costs to the consumer can be reduced only by changing battery chemistry, so this needs to occur if EVs uptake by society is to continue to grow, he said.

"The cost of vehicles will become an increasingly important factor," Price said. "So battery pack sizes must also become smaller."

This means that batteries will also in future need to be built differently: a smaller battery, potentially halving current battery sizes, may have a shorter life and shorter range than larger batteries, which are also easier to charge.

Vehicle consumers today consider range to be the most important factor in an electric vehicle, Hoffman said, while Price offered that the market doesn't need enormous range as the average car journey globally is around nine miles.

An EV with shorter range however needs an efficient charging infrastructure, with "widespread ultra-rapid charging on major roads, improved fuel economy and powertrain efficiency, alternative vehicle configurations, such as range extenders, and new vehicle ownership models," he said.

"So there's various things we can do to reduce lithium demand," Price said. "The critical challenge of this decade is to reduce lithium intensity."