25 Feb 19

Europe digs up lithium

More electric vehicles means more batteries and hence more raw materials such as cobalt and lithium that need to be mined. The Finnish company Keliber Oy has the answer: the first European lithium mine.

With the growing electrification of transport, the need for EV batteries is growing, too. However, mining the required raw materials is highly contentious because of its environmental and social impact. There are reports of child labour in cobalt mining in the Democratic Republic of Congo and of a severe environmental impact of lithium mining in the lithium triangle in Latin America

Secure and sustainable

Lately, the growing awareness around these aspects of the supply chain have motivated car makers to have a closer look at their supply chain. Some of them, together with other market players such as Umicore, set up the Global Battery Alliance and/or made other sustainability claims. 

Combined with the economic aspect of securing the supply chain of raw materials for batteries, more carmakers are making the move into (some parts of) the battery production chain. Therefore, the first European lithium mine in Finland might provide a perfectly suitable answer. Moreover, the mine is actively looking for carmakers as investors. 

Local vs Global

Investing in the European mining project has some advantages above heading to Latin America (Bolivia, Chile and Argentina) or Australia where the lion share of lithium is extracted today. First of all, the geographic vicinity of the Finnish mine will increase the controllability of the mining process. It would be a more local and more sustainable source of lithium for European car batteries. 

Moreover, the mining company Keliber Oy promised traceability of the entire supply chain, while providing information on the environmental footprint of every ton of lithium hydroxide. Additionally, Keliber claims that it will process the lithium concentrate itself rather than selling it to chemical companies. The goal is to extract 10 tons of battery-grade lithium hydroxide out of 100 tons of rock. The by-products will be used in the local construction industry rather than adding up to the waste pile. 

Lithium vs Lithium

Which brings us to the main difference with the current mining practices in Latin America, where lithium is extracted from brine as lithium carbonate, after which it requires an extensive chemical process to transform it into automotive battery-grade lithium. 

The Lithium hydroxide which will be extracted in Finland, on the other hand, where it is produced from hard rock deposits but can be processed through leeching, which is sulphate-free and hence less harmful for the environment. It is more expensive but it is also less labour intensive and eco-friendlier. 

€250 million

In total €250 million is needed to deliver about 25GWh of battery cell supply starting at the end of 2021. Moreover, carmakers willing to own a stake should be aware of the current prices of lithium, which vary. At the moment a ton of battery-grade lithium hydroxide is worth around $14,000. 

Next Step

The mine will be located in the region of Kaustinen, where the largest lithium deposit of Europe is found. It was discovered in the 1950s but will only be exploited today as demand is growing. It is estimated that Kaustinen contains enough lithium for about 10 years of lithium extraction, however more deposits have been discovered in the vicinity, increasing the life span of European lithium production.

Add the nickel deposits in Harjavalta and the graphite deposits in Finland and Sweden, and one might think the next step will to construct a European battery factory in the vicinity, tackling the entire supply chain of EV battery production.  

Authored by: Fien Van den steen