I recently talked with Mangrove Lithium CEO and cofounder Dr. Saad Dara about lithium resources, lithium refining, and localization of the EV battery supply chain for another episode of CleanTech Talk.
In his initial PhD work, Dr. Dara was focused on water desalination and treatment for the oil and gas sector or the mining sector, but then as he and his team looked into spinning out a company based on this work, they quickly realized that water treatment was a very difficult market to break into. In talks with potential clients, however, someone asked them if they could convert their lithium chloride into lithium hydroxide. And that was essentially the start of what would become Mangrove Lithium and its lithium refining and processing business. There’s more about Dr. Dara and the founding team in the podcast, but let’s jump to the global lithium market and his take on the fact that, currently, the vast majority of lithium refining takes place in China. Here’s his summary of the situation and where we’re headed:
“I think 70% of the world’s lithium is Argentina, Chile, Bolivia, and Australia — something like that,” he noted, “but when you talk about downstream chemical refining onwards in the lithium supply chain, I think over 80% of that exists in China — for good reasons. They have a huge market, they have a huge amount of demand. The rest of the world’s a little bit behind on that demand.” Indeed — more than 50% of the world’s EV sales are in China. “But they’ve really been able to dominate the market […] they’re doing a lot of the downstream lithium supply chain — from chemical process refining, anode/cathode manufacturing, end use — and North America and Europe are trying to catch up on that, but that’s where the industry is right now.
“So, there’s been a lot of talk about potentially creating local supply chains for EVs, or local supply chains for anode/cathode manufacturing. In our view, if most of the world’s refining is in China, you can bring all the battery products you want over here, but your product will still have to go there and then come here. So, what have you really onshored?”
Mangrove Lithium currently has operations in Vancouver and is working toward building their first lithium refining plants in the United States. But Dr. Dara then brings up an issue that regular CleanTech Talk listeners or CleanTechnica readers will be familiar with. “I will say this: right now the bottleneck is that there’s not enough lithium being produced at the mine level. But as more and more lithium does get produced from the mine level, refining capacity elsewhere will be more important, especially as we look to be less dependent on the Asian markets.” (Recall that aside from China, big battery manufacturing companies and facilities are in South Korea.)
We also talked a little bit about the geopolitical issues surrounding this topic, and Dr. Dara noted, among other things, that the Canadian Department of Defense was even considering funding mines. Then he added, “From our view, what we really want to do in our long-term strategy is to say that we are going to build refining capacity using our core technology, which is electrochemical, in North America and in Europe — so that the product that is being shipped, you know, to the Asian markets doesn’t necessarily have to be shipped there, that it could be shipped here, where we are.” That’s certainly what policymakers and citizens of these Western countries would like to see.
“The other aspect of that is that we do plan on being integrated at a mine level in South America or in Australia. And that provides more options to the market.” That’s another logical option, maybe an even more efficient and logical one from an objective point of view.
That basically covers the first quarter of our conversation. For more — including talk around the price of lithium, more vertical integration at automakers, lithium mining, the broader battery supply chain, where Mangrove Lithium is looking to operate in the USA, the Inflation Reduction Act of 2022, and more — listen to the full podcast. If you prefer Spotify over SoundCloud, here’s an embedded Spotify player:
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