Further IOCG, Copper and Epithermal Mineralisation Discovered at Great Bear Lake U-Cu-Ag-Au Project

1. Black mass recycling sector growth

Global demand for lithium-ion batteries is projected by McKinsey & Company to surge from 700 gigawatt hours (GWh) in 2022 to 4.7 terawatt hours (TWh) by 2030, driven primarily by the increasing use of batteries in electric vehicles, which will make up 4.3 TWh of the demand on their own.

This growth is propelled by regulatory shifts toward sustainability, such as the EU’s “Fit for 55” program and the US Inflation Reduction Act, higher consumer demand for greener technologies, and commitments from major automakers to phase out internal combustion engine vehicles and meet new emission-reduction targets.

During a presentation titled “Black Mass and Battery Recycling Technologies,” Lee Allen, the strategic markets editor for scrap at Fastmarkets, discussed battery demand and the battery recycling segment.

Lee explained that, by 2034, Fastmarkets projects 25 million metric tons of new battery demand, mostly rising from the EV sector. Black mass recycling is becoming a viable option for the recovery of battery raw materials to help respond to the incoming demand.

“By 2034 … 18 percent of metal supply will come from recycling in the global market. That is compared with a much smaller amount in 2023, which was just 8 percent.”

Much of that growth will come from North America, Lee added.

“US scrap battery volumes are set to soar over the next 10 years as well,” he said. “It was estimated by the (Fastmarkets) research team that around 7 percent of global scrap batteries were in the US market in 2023, whereas that will increase to 17 percent by 2034.”

2. Unconventional extraction options still face roadblocks

With demand poised to soar over the next 10 years, extracting lithium efficiently, expeditiously and in environmentally friendly ways is becoming increasingly important.

However, as McKinsey’s Ken Hoffman pointed out, while there are many “promising and interesting advancements” in the extraction space, “none of them are commercial.”

As the industry mulls over which extraction method is most viable, Hoffman noted that there are other factors to consider while making the decision, including water availability.

“Freshwater is something we see in a lot of technologies becoming a huge bottleneck or concern for communities,” Hoffman said. “So, this is something that always needs to be thought about.”

Though solar evaporation and hard rock mining are the most conventional methods of lithium extraction currently, direct lithium extraction (DLE) from brines, adsorption and ion exchange are also gaining traction in the industry.

However, as Hoffman outlined, none of these technologies have been scaled to the commercial level, and doing so for a DLE facility would be very capital intensive. Obtaining financing to do so is difficult, despite significant capital being available in the battery industry, in part because of the limited proven successes.

Additionally, doubts about DLE’s commercial viability persist, with many experts favoring traditional lithium production methods. Obtaining permits, especially in Europe, is difficult, and while DLE uses less water overall, it still requires more fresh water than traditional methods.

Lastly, the industry is struggling with limited access to skilled labor and materials, complicating the development and scaling of DLE technologies.

3. Geopolitics and global regulations

2024 is a major year for elections around the world, with more than 64 countries heading to the polls throughout the calendar year, including the US election that will be held in November.

During her presentation “Unravelling Global Regulations and the Inflation Reduction Act,” Grace Asenov, base and energy metals editor at Fastmarkets, discussed the impact of the Inflation Reduction Act, which the Biden Administration passed in late 2022.

Asenov highlighted how the IRA has supported the US battery supply chain and battery metals sectors, including through tax credits such as the US$7,500 consumer tax credit for US-based electric vehicles and the battery credit.

Additionally, she said that restrictions on materials sourced from countries such as China, Russia and Iran have also added some tailwinds for the North American market. However, because most lithium processing still occurs in China, US battery makers are poised to see continued challenges in sourcing material.

Asenov also discussed the recent regulatory history between the US and China, explaining that some of the restrictions the Biden administration has levied against Foreign Entities of Concern began under the previous Trump presidency, such as Trump’s Section 301 tariffs on goods from China, specifically.

“(In May), Biden doubled down on some parts of section 301 targeting these markets, including EV batteries, permanent magnets, natural graphite and more,” Asenov said. “I think the real takeaway here is that this is a bipartisan story. So, kind of surprising, maybe that Biden followed through on some of Trump’s initial anti-China policies.”

4. Supply chain restructuring

Concern about supply chain robustness and resilience continues to be a chief concern in the battery raw materials space and was a featured topic during the four-day conference.

During the presentation “Battery Supply Chains and Trade Flows,” Andy Leyland, founder of Supply Chain Insights, spoke about the challenges the lithium and battery raw materials sectors are dealing with.

He explained that the EV battery supply chain is grappling with oversupply, investment demands and range anxiety. These issues are further compounded by geopolitical tensions and environmental concerns as well as the need for investment outside China.

While lithium, cobalt, nickel and rare earth deposits were formed thousands of years ago, leaving countries no say in what lies beneath their nation’s bedrock, the processing and manufacturing of these materials is largely dominated by China.

“Seventy percent, 80 percent, 90 percent of the (processing and manufacturing) market is being dominated by China,” said Leyland. “That is politically unacceptable in Europe, it’s unacceptable in the US and other countries.”

Leyland added that political mandates around employment, environment, sourcing and energy security have driven the West to build and fortify new and existing supply chains.

5. EV adoption inertia

As the largest end-use segment for many battery raw materials, the EV industry and its performance is closely tied to the trajectory of many of the battery metals supply and demand models.

At “The Future of Demand: Are We in EV Winter?” discussion, panelists from across the battery metals supply chain offered insight into the current EV market and where it may go in the years ahead.

Citing factors like range anxiety, sparse charging infrastructure and high price points, the panelists noted that EV proliferation may be at a plateau.

To combat this stagnation, the panelists agreed that the US and Europe need to focus on affordability and making EVs more accessible to low and middle-income consumers, by developing more affordable models and leveraging government incentives.

Additionally, the panelists also mentioned investment in building out domestic supply chains and manufacturing capabilities to reduce reliance on imports.

The group also called on carmakers to develop more exciting and desirable EV models that appeal to consumers, rather than relying solely on regulations and subsidies.

Lastly, they cautioned against viewing market growth as a sprint instead of a marathon, telling the conference-goers that the sector needs to take a long-term strategic approach to developing the EV industry and recognize that it may take 10 years or longer to fully build out the necessary supply chains and infrastructure, independent from China.