Lithium mining is a topic that keeps U.S. battery industry leaders up at night. Domestic lithium battery production will be central to the rapid expansion of the battery industry over the next decade. However, we’re currently far short of where we want to be. Leaders are crossing their fingers that U.S. lithium production capacity will grow quickly enough to meet the inevitable ramping of demand.
The Biden-Harris Administration Steps In
In 2021, the Biden-Harris Administration ordered a review of America’s vulnerabilities in our critical mineral and material supply chains. The research uncovered severe over-reliance on foreign — and often adversarial — nations for critical minerals like lithium, which will be central to the electrification of our economy. If the U.S. is not able to develop a reliable domestic supply in short order, we’ll likely need to import tens or hundreds of billions of dollars in batteries. Any slip-up in our relationship with the source countries could spell disaster.
President Biden met with government and industry leaders in February 2022 to announce major investments to combat these vulnerabilities. The White House’s fact sheet, Securing a Made in America Supply Chain for Critical Minerals, covers the scope of the proposed investments, research, and business incentives.
Foreign Markets Control Current Lithium Supply
Currently, most production and refining of lithium (among other critical minerals and rare earth metals like cobalt) happens in China. This puts the U.S. in a precarious situation. Restrictions at any point in our trade for Chinese lithium could result in the loss of our ability to make EVs in the U.S.
Biden’s executive order and stated intention to invest in domestic production are an acknowledgement that we’re at a disadvantage. The focus will now be on developing a domestic market for Li mining. EV and lithium battery production are ramping up, so there’s no time to lose.
Lithium mines and research operations have already begun to emerge around the country. Berkshire Hathaway Energy Renewables (BHE Renewables), for example, has broken ground on a new multi-billion dollar demonstration facility in California to test the commercial viability of their sustainable lithium extraction process. This is part of a broader investment in sustainable lithium battery production over the next five years.
The President’s Plan For the Battery Market
The President has announced numerous investments to assist in our transition to domestic production of lithium in addition to policy changes that will encourage innovation. He’s already allocated $7 billion in the Infrastructure Investment and Jobs Act (Public Law 117-58) to develop and improve the U.S. battery material supply chain.
On the policy side, the U.S. government is updating outdated Li mining laws, revising and prioritizing the Federal list of critical minerals, and strengthening critical mineral stockpiling efforts. In March 2022 President Biden also announced that the administration would invoke the Defense Production Act (DPA) to ensure more of the Lithium supply comes from the US — a move that indicates his view that insufficient lithium battery production is a potential threat to national security.
Lithium Recycling Will Help
The White House report also recommends an expansion of domestic recycling of lithium and other critical minerals. Once mines are established, recycling will become vital to a truly sustainable lithium supply. There is currently no energy-efficient and cost-effective way to extract lithium from a used cell, and no U.S. policy currently dictates that lithium-ion batteries must be collected or recycled in any certain area.
This will be the next key area to watch for a move at the federal level. It’s promising that the U.S. has plans to invest in these areas, but it will take actual policy to persuade enough manufacturers to transition to using recycled materials to drive down costs and make it sustainable. Time will tell whether this ambitious goal can be realized. Battery reuse and recycling would become a powerful enhancement or alternative to expanded domestic lithium mining capacity.
