Building the sustainable society requires exotic materials

These are some classic Producer Class stories.  It is difficult enough to come up with high-performance batteries that really work. (Or in the case of Lithium, simply making batteries that don't catch fire.)  It is a world of highly exotic elements that often come from politically unstable parts of the world.  This alone would make the prices volatile. But what is worse, whenever there are real economic reasons for price instability, the speculators will come along to extract their pound of flesh and make things 100 times worse.  It's hard to make production decisions that include materials whose availability and prices are unknown.

So far, these rare earth bottlenecks haven't been especially critical because we mostly use lithium-ion batteries to power video cameras and laptop computers.  But now people are actually thinking about using batteries to power cars.  This move would turn tiny resource problems into ginormous ones.

Cobalt Recycling May Be The Only Way To Break Dependence On China And The Congo

Resource Investing News | Apr. 28, 2012
By Karan Kumar — Exclusive to Cobalt Investing News

The United States, like many other western nations, produces virtually no cobalt, a mineral that is crucial for several applications, including superalloys and batteries for phones, laptops, and electric vehicles. The Democratic Republic of the Congo supplies nearly two-thirds of the world’s cobalt, most of which is refined in China. Hence, recycling cobalt is important, especially in countries that do not produce the metal. And the trend is growing.

“In 2011, cobalt contained in purchased scrap represented an estimated 24 percent of cobalt reported consumption” in the US, the US Geological Survey said in a recent report. “China was the world’s leading producer of refined cobalt, and much of its production was from cobalt-rich ore and partially refined cobalt imported from Congo. China was a leading supplier of cobalt imports to the United States.”

In the European Union, which has identified 14 minerals, including cobalt, as critical, the intention is to recycle as much as possible of these minerals until new supply sources are established. In cobalt’s case, that means supply from the Congo and China needs to give way to other sources.

“The recycling rate of different metals varies considerably,” a study by the European Pathway to Zero Waste, a part of the UK’s Environment Agency, showed. While some minerals like gallium and rare earth have recycling rates of less than one percent, cobalt, niobium, and some platinum-group metals “are all reported to have a recycling rate above 50%,” the study showed.

While recycling minerals can be expensive, “[r]ecycling cobalt from lithium-ion batteries and metal alloys is economically feasible at current cobalt prices,” according to the US Department of Energy.

Belgium-based Umicore SA (EBR:UMI), one of the world’s largest precious metals recyclers, already has a process in place to recycle cobalt and nickel from rechargeable batteries. The company has said its process “enables an Environmentally Sound battery recycling of used Li-ion, Li-polymer and NiMH batteries, without any potentially hazardous pre-treatment, and returns the main Nickel and Cobalt metals into the form of new advanced materials for new battery applications.” Last year, Tesla Motors Inc. (NASDAQ:TSLA) launched an initiative to recycle its industry-leading battery packs throughout Europe at Umicore’s facility in Belgium.

Honda Motor Co. (NYSE:HMC) and Japan Metals and Chemicals this month developed a technology “capable of extracting the rare earth materials from a battery and separat[ing] them from the stainless steel of the battery,” Hydrogen Fuel News reported. “The stainless steel produced through the process can be reused and the nickel and cobalt recovered is pure and abundant enough to be used in new batteries.”  more

Ah yes, using vertical integration is an old established practice in industrialization. Whatever the economic reasons given, the real reason is usually the desire to secure reliable sources of the production basics.  Just remember, while all parts are not equally expensive, all parts are equally important.  Missing just one element out of thousands will close down production.

Mining Revival—German Solar Firm Goes Hunting For Lithium

By Christoph Seidler  Solarworld  05/02/2012

Essential for building electric car batteries and solar technology, lithium is a raw material of the future. Now a German firm is searching for deposits of the valuable resource in the country's Ore Mountains. Geologists believe that some 1.5 billion dollars' worth of the light metal lies underground.

The road sign behind Armin Müller may read "summer trail," but the first thing the business manager does is bundle up. It definitely doesn't feel like summer up here, not even like spring. Cold gusts of wind and occasional rain showers have the head of the Solarworld Solicium company reaching for his black windbreaker. His little troop of guests is shivering too.

Müller's company, which specializes in photovoltaic products, has invited a handful of journalists to the edge of the Erzbegbirge, or Ore Mountains, near Altenberg. Here, on the German side of the border with the Czech Republic, SolarWorld is drilling for an underground lithium deposit. At least 40,000 tons of the light metal is believed to be hidden on the German side alone. It would be a treasure worth some $1.5 billion (€1.14 billion). "And that's the lowest estimate," says Müller.

His company aims to find out by the end of the year how much lithium actually lies in the ground. The hope is to explore the Czech side too, where at least 80,000 tons of the valuable substance is also likely waiting. The license to explore in Cinovec was issued several days ago.
The most important tool in the excavation is the drilling machine, which Müller demonstrates to his guests on the German side. The loud machinery tears a ten-centimeter wide hole into the earth. A few meters away, outside Zinnwald church, a similar drill awaits.

The machine has already drilled down to a depth of more than 80 meters to reach the rock formation that contains lithium. Core samples are placed in labeled wooden boxes. While the first samples are a red color, further down they are a speckled dark grey. And then, bingo! The sought-after metal is hidden within the so-called Zinnwaldite, a mineral ore that holds up to 0.3 percent lithium.

Each day drillers bore 10 to 15 meters deeper into the ground. The drilling runs diagonally in order to cut through as much of the 1,200-meter-long and 500-meter-wide deposit as possible. The goal is to reach a depth of 250 meters. The area has been drilled before, including multiple times by when it was still part of the former German Democratic Republic. Müller and his colleagues know from studying old documents how much lithium they can hope for. New data will fine-tune the plan and aid in the process of gaining international certification, an important step in attracting investors to the project.

Müller's company is interested in lithium because it wants to make customers an offer they cannot refuse: the chance to install lithium ion batteries in their cellars to store the energy that the solar panels on their roofs absorb. The raw material for the batteries will come from the ore, which is also important for the lithium batteries in electric cars. Recently, management consultancy Roland Berger estimated that the world market for lithium ion batteries will grow to $9 billion by 2015.

As attractive as it all might sound, there is no shortage of lithium on the world market. In the coming years even a surplus is expected, especially if the Bolivian government develops a vast deposit in Uyuni, in the southwest of the country. And besides, doesn't SolarWorld have other problems to contend with at the moment? Solar firms in Germany are falling like dominoes. Solon, Q-Cells, and First Solar are just a few examples, with low-cost competition from China blamed for the demise of the industry. At SolarWorld too, sales dropped by 20 percent last year. more