Energy transition metals #50

Hi Human,

Happy new year, 2023! (I know I’m a bit late. Only when I went on vacation did I realize how tired I had been. I took a good break and am fully ready for this exciting year. Remember to take care of yourself!💚)

It’s amazing to see so many new Survivaltech.club readers - we are now +2200 deeptech climate innovation enthusiasts. Welcome!

Now, energy transition metals, a.k.a critical minerals. My interest in this topic rose when I interviewed Lacey Reddix, Founder and CEO of Olokun Minerals on Survivaltech.club last year. Olokun Minerals is extracting critical minerals from wastewater.

In this deep dive, I explore how minerals are necessary for the energy transition, what are the critical minerals, and how startups can help ensure their sufficient supply.

➡️Follow Survivaltech.club on Twitter and Linkedin

‍

✨Updates

🚀 I started as an Entrepreneur in Residence at Lifeline Ventures, a Helsinki-based VC!

Lifeline has invested in some amazing deeptech climate startups, like Carbo Culture, Solar Foods, and Norsepower, and has €750M in AUM.

My aim is to launch a deeptech / research-based climate startup in the US.

Here’s how you can help💚:

• Connect me with scientists doing climate technology-related research who would like to spin out their research into a startup.
• Connect me with experts, founders, investors, etc., in energy transition metals, battery recycling, and steel recycling. I’m currently looking into these areas with my co-founder.

📰 My article on “Deep Tech Climate Startups: Humanity’s Superpower” was published in the My Climate Journey’s Community Voices newsletter.

💰 I made my first angel investment in a deeptech climate startup!

More on my first investment later. If you are a deeptech climate startup looking for a well-connected and climate + deeptech knowledgable angel, hit me up.

‍

💚The energy transition loves rocks

The energy transition from fossil fuels to clean and renewable power-generating technologies is on its way. This transition is surprisingly very metals-intensive.

‍

A typical EV requires 6x more mineral inputs than a conventional internal combustion engine car does. An EV’s lithium-ion batteries require lithium, cobalt, and nickel, while its electric motor needs copper and rare earth elements like neodymium.

Similarly, clean power-generating technologies, like wind power and solar PV, require more minerals to produce one energy unit than fossil fuel-based technologies. An onshore wind plant takes in 9x more mineral resources than a natural gas-fueled power plant. This analysis doesn’t even consider the massive use of steel when building solar and wind plants.

‍

If the world aims to reach net zero by 2050, clean energy technologies will require 6x more mineral inputs in 2040 compared to 2020! That’s over 40 Mt of minerals.

‍

📉The risk of mineral shortage and delay in the energy transition

As the energy transition accelerates and dramatically grows the demand for several minerals, the risk of mineral shortages arises.

IEA states that “today’s supply and investment plans are geared to a world of more gradual, insufficient action on climate change”.

The below graph shows how today’s supply and investments are not inline to limit the global warming below 2°C. The red line (SDS) shows the demand for a certain mineral in the IEA Sustainable Development Scenario that is inline with the Paris Agreement. The yellow line shows a gradual implementation of energy technologies, insufficient for tackling the climate crisis.

‍

🌎Critical minerals and their use in climate tech

There are five minerals that are regarded as critical:

1. Copper
2. Lithium
3. Cobalt
4. Nickel
5. Rare earth elements (REEs)

To understand why these minerals are essential for the energy transition, let’s briefly see their use cases in climate technologies.

1. Copper

Copper is the workhorse of the energy transition.

Alongside aluminum, copper is widely used in wires and cables in the electricity network. The electricity network, in turn, must be expanded rapidly during the following decades, as more renewable power generation is built and more energy end usage like transporation and heating are electrified.

Copper is also a key element of electric motors used in EVs and generators used in wind turbines.

2. Lithium, 3. Cobalt, 4. Nickel

Lithium, cobalt, and nickel are all battery metals. They are a lithium-ion battery’s active cathode materials. [If you are new to the world of batteries, check out this intro video to lithium-ion batteries.]

It is noteworthy that different cathode chemistries use different amounts of these minerals. Thus, the future demand for these battery metals may vary depending on the lithium-ion battery chemistries.

For example, nickel manganese cobalt oxide (NMC) 111 lithium-ion batteries use 8x more cobalt but half of the nickel that nickel cobalt aluminum oxide (NCA+) batteries use. Some cathode chemistries like lithium iron phosphate (LFP) don’t require either or cobalt, but 50% more copper than NMC batteries.

Cathode chemistry is moving toward nickel-rich chemistries away from cobalt-rich ones. Some of the reasons for this expected shift are cobalt’s volatile prices and the supply chain’s ethical concerns.

5. Rare earth elements (REEs)

REEs are a group of 17 metals and include elements, such as neodymium, praseodymium, dysprosium, and terbium.

The most important use case of REEs is permanent magnets. Permanent magnets are used in electric motors in EVs and generators in wind turbines. REEs are also used in catalytic converters of conventional cars to remove pollutants.

‍

🪨Characteristics of critical minerals

What makes copper, lithium, cobalt, nickel, and REEs critical? Why aren’t we worried about the availability of steel, which solar and wind plants also need?

The answer lies in three characteristics of critical minerals:

1. A massive future ramp-up of production
2. Geographically concentrated production
3. Declining quality of natural resources

Note that not all of these characteristics apply to all critical minerals.

1. A massive future ramp-up of production

The production of the most critical minerals needs to be increased drastically over the coming decades.

The demand for lithium is expected to grow by 42x between 2020 and 2040. The demand for other battery metals, cobalt and nickel, is also forecasted to increase by 21x and 19x, respectively.

‍

An interesting fact for considering the ramp-up of cobalt production is that 98% of cobalt is produced as a by-product of copper and nickel mining today.

2. Geographically concentrated production

The production of critical minerals is more geographically concentrated than that of fossil fuels.

‍

This concentrated production of critical minerals raises geopolitical concerns.

China holds a strong position in the production of critical minerals. It controls the production of REEs with a nearly 90% share and has a high share of processing other energy transition metals, such as lithium and cobalt. China has already used its power as a key critical mineral producer. In 2010, China halted all its rare earth exports to Japan.

Another clear dependency is found in cobalt. The Democratic Republic of the Congo (DRC) accounts for around 70% of cobalt extraction.

Critical minerals will likely become the next oil - a natural resource fundamental for powering societies and causing geopolitical tension.

‍

‍

3. Declining quality of natural resources

Copper resources are adequate but suffer from the declining quality of ore.

For example, the ore quality in Chile declined by 30% during the past 15 years. Chile has the highest share of copper extraction. Extracting copper from lower-quality ore requires more energy and creates more waste.

‍

🚀The role of startups in ensuring sufficient energy transition metals

While exploring energy transition metals and related challenges, I discovered four ways in which startups can ensure that critical minerals are available for the energy transition:

‍

1. Increase the supply of critical minerals from new resources

• Deep sea mining (Impossible Metals, The Metals Company)
• Asteroids mining (Astro Forge)
• Metal recovery from waste streams and lands (Phoenix Tailings, Olokun Minerals. Read more about Olokun Minerals on Survivaltech.club’s recent interview with Olokun’s Founder Lacey Reddix)
• Phytomining [mining using plants!] (Genomines)

These approaches also diversify critical mineral supply, which can alleviate geopolitical tensions.

2. Recycle critical mineral-rich products

• Battery recycling (Universe Energy, Redwood Materials, Li-Cycle)

3. Make mining faster, cheaper, and more sustainable

• AI-based mineral exploration tools (KoBold Metals, Earth AI)
• Direct Lithium Extraction (Lilac Solutions, Summit Nanotech)
• Copper from low-grade ores (Jetti Resources)

4. Redesign products to use less or no critical mineral

• REE-free magnets and electric motors (Turntide Technologies, Noveon)
• Cobalt-free cathode designs for lithium-ion batteries (Sparkz, TexPower)

‍

Check out more startups and innovation areas in the CTVC’s amazing article “Mining through the Valleys of Death”.

‍

I’d love to hear feedback and connect with fellow climate people! Contact me at pauliina@survivaltech.club, Twitter, or LinkedIn.

➡️Follow Survivaltech.club on Twitter and Linkedin

➡️If you enjoyed this article, please share it with your network!🌍

Best, Pauliina💚

‍

Sources

• American Chemical Society. Neodymium. Link.
• Catalyst (2022). The big rush for battery metals. Link.
• IEA (2021). The Role of Critical Minerals in Clean Energy Transitions. Link.
• IRENA (2021). Critical Minerals for The Energy Transition. Link.
• McKinsey (2022). The raw-materials challenge: How the metals and mining sector will be at the core of enabling the energy transition. Link.

‍