Inconvenient Truths About Electrical Vehicle Batteries

Post 17 | Sketchy metal supplies and questionable green creds

Part of the fun watching Star Trek episodes was hearing of exotic substances that existed in the make-believe future. Dilithium and trilithium were energy sources, duranium and tritanium were hard metal alloys, while verterium and benamite were propulsion elements.

Back in the real world we are awakening to the critical need for metals with more familiar names, to store energy for electric vehicle (EV) batteries weighing an average 1000 pounds – notably lithium, cobalt, copper, nickel, graphite, manganese, aluminum and steel.

The climate change movement has driven government and industry to rush headlong into the EV world, to eliminate carbon dioxide (CO₂) emissions from combustion engines powered by fossil fuels, while touting those EVs as a green alternative. In 2021 Canada declared a total phase out of non-commercial gas powered vehicles by 2035 backed by little more than a father-knows-best righteousness – now being followed by a boatload of taxpayer money.

Given Canada’s 1.5% contribution to global carbon emissions and passenger vehicles contributing about 10% of that total, we could make a maximum .15% impact on global emissions through a wholesale move to EVs. Whether it will move the needle in limiting global 2050 CO₂ by the target .01% (100 ppm) or mitigating temperature increases and whether that will make a difference to our world, will be known only when the time comes – but the math is not in its favour.

Meanwhile, there are some very Al Gore-esque inconvenient truths and uncomfortable realities afoot when it comes to electrical vehicle production, operation and end-of-life. Indeed, EVs will and should have an increasing role in our modern world and, frankly, they are impressive machines. But the absolutist, all-in, take-no-prisoners approach of our government is of great concern. Based on a cobbled-together strategy fueled by political expediency and whipped by hyperbole and fearmongering, we are being pushed toward a synthetic timeframe while breaking things along the way.

This article tackles issues related only to battery development for electric vehicles. However, much more can be explored about EVs including lagging sales, increasing government subsidization, limited infrastructure, viability in various settings, questionable payback metrics, and looming battery recycling challenges.

Are we investing in or gambling on EV batteries?

Canada has made a Hail Mary bet subsidizing Stellantis/LG (ON), Volkswagen (ON) and Northvolt (QC) facilities to the tune of $44B over a 10-year period. This includes about $5B of direct investments, $33B in subsidies and $6B in foregone revenues, per the Parliamentary Budget Office (PBO).

These costs will be borne $27B by federal tax dollars and $17B from Ontario and Quebec.

The PBO’s estimates sit at a whopping 23 years for the Stellantis facility to break even, 15 years for the Volkswagen plant and 11 for Northvolt - assuming production begins in 2024, 2027 and 2026 respectively. Debt financing costs are projected to add another $6.6B.

Touted as long-term investments in Canada’s green economy, these plants have also been sold as job creators. In the Stellantis operation the target was for 2300 Canadian workers to build the facility, but last week’s revelation that 900 South Korean workers may be imported during the facility construction and similar rumbling that Northvolt will be importing hundreds of foreign workers, has left us feeling further duped. And the promised though not guaranteed 2500 ongoing production jobs at Stellantis, work out to an eyewatering $6M per job across ten years - perhaps the most expensive job creation program in history.

These long-term bets assume that EVs will remain the transportation golden child of the future and not be supplanted by hydrogen vehicles or other options, and that the plants can efficiently retool as EVs and batteries invariably evolve, without ransoming more Canadian money. More broadly, they rely on the dubious expectation that we can make accurate long-term predictions about supply, demand and costs. And that this latest government-financed project will not go down as just another bloated failure.

Metal by the numbers

But the bigger risks of EV viability and cost may lie in the raw materials for the batteries.

There are significant variances in metal proportions of every EV battery ranging from a Nissan Leaf battery weighing under 700 pounds to Tesla’s Model Y power pack tipping the scales at 1700 pounds. However, an example of key metals in a single EV battery is about 18 pounds of lithium, 77 pounds of nickel, 44 pounds of manganese, 31 pounds of cobalt, 180 pounds of copper (including car wiring), up to 200 pounds of graphite, and 80 pounds of aluminum, plus additional steel, iron and plastics.

Scientist and author Vaclav Smil estimates that materials for a single battery require excavation of up to 225 tons of raw material and processing up to 40 tons of ores. The energy consumption and manpower to mine, transport and process these materials for a projected 700 million EVs on the road by 2050 is mind boggling, and nearly impossible to square with net zero targets.

Smil also estimates that to meet just 50% of targeted electric vehicle production for 2050, we will require 15-20 times more metal materials than we have today. Recently, the International Energy Agency (IEA) also proposed that the world will need another 388 new mines to meet the metal needs of targeted electric vehicle production.

Back at home, Canadians are accustomed to a world of plenty as we sit atop oceans of oil and gas, live amidst millions of hectares of arable farmland and harvestable forests and boast access to 20% of the world’s fresh water. We have also come to believe that our self-sufficiency extends to endless metals and minerals in the rock beneath our feet, which is partially true. However, current production numbers and known reserves tell a more troubling story when applied to seven key metals required for EV batteries.

As we move from a world of plentiful energy molecules as provided by abundant Canadian fossil fuels and into a world of energy electrons that require storage using metals we don’t possess or control in large quantities, our self-sufficiency becomes more fragile.

Where’s the metal?

Drawing mostly from the Natural Resources Canada’s (NRC) website, I compiled a supply side view of seven key EV battery metals based on 2021 and 2022 data. It tells a story of Canada’s low-to-negligible production in these metals including a year-over-year (YoY) production decrease for four of those, with the other three having zero or negligible baselines against which to measure. To state it more directly - at the same time as we have synthetically ramped up EV demand while announcing draconian bans on combustion engines, our homegrown production capacity of the critical raw materials has reduced. (NRC includes no information on manganese and Canada appears to have no viable production, though there are some early stage projects).

The table shows each metal’s top producing countries including the production contribution by the list topper in each category. More tellingly, the data shows where current known reserves live and Canada’s small proportion.

Against this backdrop the NRC site makes a declaration that can be most kindly described as an exaggeration by stating, “Canada is a leading global producer of many critical minerals including those used in advanced battery technologies, such as cobalt, graphite and nickel.” Perhaps the future will result in major new finds in Canada but until then, we are certainly far from being leaders.

Of note - the NRC producer data does not distinguish between location or ownership of the mines, or ownership of the processing facilities. This is worth further exploration and may skew the data, as ownership and rights to mines and the control of processing are critical factors. It is no secret that China has been actively increasing control of global supply and production of key metals, while Canada badly lags and the United States is growing concerned with their supply. This sets up a future in which critical materials could be a major factor in the geopolitical balance of power.

Environment and human rights

I cast no ill light on EV owners as everyone chooses a vehicle to fit their own needs, and they are great options for many. However, if your primary reason for purchasing an EV is to be kinder to the environment you may wish to ponder that a bit more.

To start, an EV is still comprised of about 40% plastics by volume, with the balance in metals along with some rubber, glass and other materials. Plastics and steel each have their own considerable environmental and energy footprint as covered in previous net zero posts Part 1 and Part 2.

More specifically, the mining and processing of the key EV battery metals is not pretty. As just two examples…

Cobalt mining in areas of the ironically named Democratic Republic of Congo (DRC) (producing 70% of global total) is a travesty of human rights while the toxic soup spawned from the processing cycle would horrify most people. In July the Canadian NGO IMPACT published a paper on child labour in DRC cobalt mining, outlining that up to 30% of cobalt in that country is conducted by artisanal miners with many readily using child labour along with adult labour, all poorly paid and working in horrid conditions. Metal coming from those mines is integrated into the mainstream supply chain and used globally.

Canada’s limited contribution of 3000 tons of cobalt production in 2022 came as a byproduct of nickel mining and is a regulated industry, but still stretches credulity to call it green.

Surface lithium mining makes oil sands production look like a picnic site when accounting for the volumes of water required (up to 500,000 gallons for 1 one ton of lithium) and toxic evaporation ponds that stretch for miles. This, in countries with far less stringent environmental guidelines than Canada.

Canada’s future lithium production is targeted at hard rock mining techniques mostly in untouched northern Quebec locations, where ore will be bored and extracted, then transported to offsite production facilities for processing.

Many who vilify oil and gas production for being dirty don’t give a thought to mining processes that are harsh and far from environmental standard bearers, as we simply trade one reality for another.

Regulation and social license challenges

Recent articles have talked of a return for Canada’s junior mining industry as new zinc, copper and lithium projects seek financing for feasibility and development stages. Yet, if it takes years of consultation with first nations, environmental groups and communities plus billions of dollars in overruns to thread a pipeline through Canada, just think of the years it will take to get new lithium, cobalt or other mining projects running.

According to a November 23 Fraser Institute article, “…mining and refining facilities are both slow to develop and are highly uncertain endeavors plagued by regulatory uncertainty and by environmental and regulatory barriers. Lithium production timelines, for example, are approximately 6 to 9 years, while production timelines (from application to production) for nickel are approximately 13 to 18 years, according to the IEA.”

Case in point, Nemaska Lithium mine near Whabouchi in the James Bay region of northern Quebec was authorized and permitted in 2015, put into receivership in 2017, then received new funding in 2020 led by the Quebec government. These eight years later their website declares, “the mine is partially built and will continue to be constructed at the right time to bring online with the conversion facility”, and separate news reports indicate that production is to resume by 2026 based on a deal with Ford.

Mines are also increasingly facing shutdowns and loss of license as Vancouver’s First Quantum Mineral’s copper mine in Panama is currently experiencing, with the Panamanian Supreme Court declaring their mine rights unconstitutional and ordering its closure. Global miners are being more regularly challenged by regulatory, environmental, legal, and social license issues that are expected to create future shutdowns that could cause instability in global supplies.

Netting it out

I do not sit in judgement of mining, fossil fuels extraction, or the manufacturing of vital materials for our modern world. If we want our transportation, buildings, infrastructure, food, consumer goods, technology and medicine there are stark trade offs involved and we either largely accept them or demand less. The latter is unlikely to happen, so we should at least be aware and honest about the realities of what happens under the covers to make it all happen.

The bald truth is that mining and processing of metals and minerals, even when done with the lightest touch and tightest regulations, is not a delicate operation. And much of the EV battery metal supply is currently coming from locales with less than stellar records. Mining and processing often occurs in pristine locations, gets tangled with indigenous demands, scars the earth, uses large machinery dependent on fossil fuels, requires dangerous chemical inputs, uses massive energy supplies, results in nasty byproducts that must be disposed, and has lingering impacts on land, air or water quality. These are realities.

Electric vehicles are being falsely pushed as green saviours in place of combustion engine vehicles but they are far from sinless, as they introduce unique environmental, economic, geopolitical and social challenges.

As with coal, oil and gas, watch for metal extraction and processing to enliven a new generation of eco warriors who may deface art and glue themselves to walls in protest of the evils of electric vehicle batteries, once they wake up to how it’s all done. Just a matter of time.

For now, the EV love story is in full bloom and we are on an absolutist public policy path, based on the premise that electric vehicles are fundamental to save our planet from catastrophe. In the process Canada is moving from a world of energy plenty within our control, to a paucity of control over the raw materials needed in the future world we’ve been sold.

Wait ten years and we’ll see what has been wrought. Perhaps it will all work out perfectly and I will be delighted to eat crow. But let’s hope that our fossil fuels remain within Canada’s control to backstop us if things go sideways.

Meanwhile, 80,000 delegates are flying from around the world to the COP28 climate conference being held in Dubai, UAE - one of the world’s largest oil producers, the proud owner of an indoor skill hill in the middle of the desert, and not a poster child for climate virtue. If everyone stayed home and joined by Zoom, that would likely reduce CO₂ emissions and environmental impact more than forcing us to drive EVs we don’t all want.

Stay tuned and stay pragmatic.