US critical mineral imports hit 4-year high in Q3'22 as clean-tech demand grows

U.S. imports of refined lithium compounds, which are key inputs for electric vehicle and energy storage batteries, reached almost 9,000 tonnes in the third quarter, the highest volume recorded in four years.

The country's imports of lithium compounds have been steadily rising since mid-2021 amid growing demand for the batteries used in clean energy technology, with only two companies producing them domestically, according to the United States Geological Survey. Once raw lithium is extracted from brine or rock, it is processed into lithium chemicals and must be further refined to be used in rechargeable batteries.

Lithium processing and refining is the "critical gap" within the battery supply chain, according to a 2021 report by the White House. An overreliance on foreign sources was said to pose a threat to "national and economic security."

The largest share of refined lithium imports to the U.S. in the third quarter came from China, with 3,432 tonnes, or 38.7%. China dominates the battery supply chain despite limited mineral reserves, following heavy state investment in processing and manufacturing.

Germany had the second-largest share of refined lithium imports to the U.S. with 21% in the third quarter.

High demand for clean energy technology can also be attributed to rising demand for other critical minerals such a manganese and graphite used in EV batteries, and rare earth elements used in wind turbines and EV motors.

U.S. imports of other critical minerals spiked to almost 332,000 tonnes in the third quarter, a 49% increase from the second quarter and the highest volume in four years.

In contrast, there was a steady decline in U.S. imports of processed lithium materials since the first quarter of 2022. Imports fell below 4,000 tonnes in the third quarter and mainly came from Chile and Argentina, representing 47.8% and 47.4% of shipments, respectively. Chile and Argentina lead in lithium extraction from brines but lack refining capacity, according to a report by the U.S. International Trade Commission.

The Inflation Reduction Act enacted in August will provide tax breaks, grants and loans to mining companies focused on the critical minerals outlined by the IEA. Subsequently, Albemarle Corp. outlined plans to reopen its Kings Mountain hard-rock mine in North Carolina and develop a lithium concentrator and processing "Megaflex" site scheduled to be online in 2027.

"Compared to forecasted U.S. EV demand for lithium by 2030, there's a 400,000-tonne gap between today's supply and the supply needed in 2030," Albermarle Chairman and CEO Kent Masters said during a third-quarter earnings call. "Albemarle's planned expansions in the U.S., Australia and Chile can play a key role in increasing U.S. lithium supply."

* Dig into S&P Global Commodity Insights research on lithium and cobalt markets. * Read about California's push to unlock 'Lithium Valley.'

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Panjiva is the supply chain research unit of S&P Global Market Intelligence, a division of S&P Global Inc.