Lithium News

A Boston-area startup called Alsym Energy has introduced a rechargeable battery that could potentially match the performance of lithium-ion batteries at a fraction of the price.

In addition to using inexpensive, easily accessible materials like manganese and metal oxide, the novel battery is based on water, according to an initial report from Fast Company.

This means it avoids some of the main drawbacks of current batteries, such as the potential for lithium-ion battery fires and the negative impact of mining on the environment. And thanks to the use of non-toxic materials, the novel battery design is simpler to recycle, which is always a bonus.

Meeting expectations at reduced cost

Electric vehicles are becoming more important as the world’s nations step up their efforts to decarbonize the grid. That’s because they can aid in decarbonizing both transportation and supply of electricity through reduced tailpipe emissions and offer flexibility. Naturally, many automakers are tapping into the market by producing luxurious EVs; however, the expensive price tag remains to be a problem to this day. The costs are partly due to the lithium-ion batteries that are used in electric vehicles, which are too costly for making EVs that can compete in price tag with cars that run on fossil fuels.

This is where Alsym Energy, which recently emerged from stealth and secured $32 million from investors, comes in. With its first partner being an automaker in India, the startup wants to make it possible for manufacturers to produce cheaper electric vehicles, according to a press release.

“Our motivation was to make it affordable, so that it could be widely deployed as opposed to niche,” Mukesh Chatter, CEO and co-founder of the startup, told Fast Company.

The Alsym Energy’s batteries are inexpensive enough that they might be used in developing countries to store off-grid solar power. This is especially crucial for individuals who do not currently have access to energy.

What makes the novel battery so special?

The water-based battery makes use of other affordable, easily accessible components like manganese and metal oxide. Crucially, it does not contain cobalt, an expensive critical component of lithium batteries that also contributes to supply-chain health and environmental issues. It also doesn’t use lithium, which presents additional mining difficulties. This is incredibly important as lithium has seen a price increase recently and is anticipated to drive up the price of other batteries.

According to the team behind Alsym Energy, the new design has “lithium-like performance”. But unlike the latter, Alsym Energy’s batteries are not flammable. This saves money as it doesn’t require special protection to avoid fires and gives the batteries additional applications, such as use in ships, where the industry is particularly concerned about fire risk.

If all goes to plan, Alsym Energy will start beta testing with its first customers in early 2023, with high-volume production beginning as early as 2025. The novel battery design will surely make waves globally; however, the company’s priority is to first make it affordable in low-income regions.

At the end of May, Goldman Sachs rattled lithium stocks after the investment bank declared the battery metals bull market “over for now”. Goldman called today’s lithium levels a “fundamental mispricing [that] has in turn generated an outsized supply response well ahead of the demand trend.”

Goldman predicted an average around $55,000 a tonne for this year, but its forecast for 2023 was particularly eye-raising – a very precise $16,372 a tonne. The widely quoted report prompted a sell-off in lithium stocks, and a flurry of reports taking on Goldman’s thesis.

Three weeks later, the bloodletting has not stopped, with Australian hard rock producers particularly hard hit. Many investors are nursing losses around 30% – and more among the smaller stocks – since the publication of the report (China’s Tianqi and Ganfeng, now the world’s most valuable lithium producers, being the obvious exceptions.)

In a blog post, Matt Fernley of Battery Materials Review says equity markets are getting just about everything wrong about lithium.

Fernley concludes that “until the penny drops with most investors, I’ll be enjoying myself doing some bottom fishing and picking up many of these oversold stocks at prices I never dreamt that I would be able to again in this cycle.”

Spodumene surge

Pilbara Minerals (ASX: PLS) is a good example of the extent to which stocks have decoupled from realities on the ground. The ASX-listed hard rock miner today announced another record price for its spodumene concentrate at auction of $7,017 a tonne (SC 6% CIF China basis). That’s up around $500 from a month ago.

After an initial bump following the announcement, Pilbara Minerals ended the day in Sydney down again. The stock is now down 30% since the Goldman report and 47% from its recent high. Its performance is also much worse than the broader market – the ASX is down around 10% over the same  period.

Dale Henderson, Pilbara’s chief executive officer, in an ASX filing, took a swipe at industry naysayers:

“Contrary to recent suggestions that the market has peaked, the evidence we are seeing at the coal-face with our customers, including this pricing outcome, suggests that the demand remains incredibly strong.”

The weekly price assessment published on Wednesday by Benchmark Mineral Intelligence, a battery supply chain and price reporting agency, shows an uptick in prices in China from the week before.

After a pullback from record highs in April, lithium prices have now stabilised, with Benchmark Mineral Intelligence’s price assessment pegging battery grade lithium carbonate (EXW China, ≥99.5% Li2CO3) at a midpoint of $69,875 per tonne for the past week, up slightly on the week before.

That’s still up 88% over the first five months of the year and compares to prices this time in 2021 below $20,000.

Such lithium-CO₂ batteries possess a theoretical energy density of 1800 Wh/kg, which is considerably greater compared to that of lithium-ion battery systems that are already commercially available. This implies lighter batteries or more capacity for the same weight, which have possible advantages throughout industrial applications.

We are incredibly excited about lithium-CO₂ battery technology, which has the potential to revolutionize the energy storage industry and move us ever closer to reaching net-zero emissions. With the help of our bespoke fabrication platform, we can design and manufacture practical lithium–CO₂ pouch cells that eliminate the problems these batteries have faced in the past.

Dr. Yunlong Zhao, Project Lead, University of Surrey

Present designs of lithium-CO₂ batteries tend to undergo significant ineffectiveness resulting in electrolyte leakage and evaporation. The research team from Surrey is suggesting developing and producing lithium-CO₂ batteries along with valve-regulated sealed “pouch” cells to resolve such issues.

This work to enhance batteries is considered part of Surrey’s extensive research to handle the difficulty of viable energy generation. The huge range of the University’s work in this field consists of research into next-generation solar panels, supercapacitors, biofuels, wearable nanogenerators, nuclear fusion, and more.

If we are serious about living sustainably and nursing our planet back to health, there needs to be a fundamental shift in how the general public, not just the science community, views energy storage.

Dr. Yunlong Zhao, Project Lead, University of Surrey

Zhao added, “While our lithium- CO₂ battery technology has the immediate and obvious potential to be used in next-generation electric vehicles, we also believe that this technology could be used in future intermittent power generation systems—for example, to store wind energy. We all have to think bigger if we are to halt the negative effects of climate change.”

This study is a collaboration between the University of Surrey, Johnson Matthey, and the National Physical Laboratory (NPL).

The Faraday Institution has financially supported the Surrey project as part of its Battery Study and Seed Research Projects.

These novel projects are in areas of application-inspired research that continue to strengthen the UK’s position in electrochemical energy storage, and ultimately contribute to making the UK’s industry more competitive.

Pam Thomas, Professor and CEO, Faraday Institute

The International Air Transport Association (IATA) called on governments to further support the safe carriage of lithium batteries by developing and implementing global standards for screening, fire-testing, and incident information sharing.

As with many products shipped by air, effective standards, globally implemented, are needed to ensure safety. The challenge is the rapid increase in global demand of lithium batteries (the market is growing 30% annually) bringing many new shippers into air cargo supply chains. A critical risk that is evolving, for example, concerns incidents of undeclared or mis-declared shipments.

IATA has long called for governments to step-up enforcement of safety regulation for the transport of lithium batteries. This should include stiffer penalties for rogue shippers and the criminalization of egregious or willful offenses. IATA asked governments to shore up those activities with additional measures:

• Development of safety-related screening standards and processes for lithium batteries  

Development of specific standards and processes by governments to support the safe transport of lithium batteries, like those that exist for air cargo security, will help provide an efficient process for compliant shippers of lithium batteries. It is critical that these standards and processes be outcome based and globally harmonized.

• Development and implementation of a fire-testing standard that addresses lithium battery fire containment

Governments should develop a testing standard for fires involving lithium batteries to evaluate supplementary protection measures over and above the existing cargo compartment fire suppression systems.

• Enhance safety data collection and sharing information between governments 

Safety data is critical to understanding and managing lithium battery risks effectively. Without sufficient relevant data there is little ability to understand the effectiveness of any measures. Better information sharing and coordination on lithium battery incidents among governments and with the industry is essential to help managing lithium battery risks effectively.
These measures would support significant initiatives by airlines, shippers, and manufacturers to ensure lithium batteries can be carried safely. Actions have included:

• Updates to the Dangerous Goods Regulations and the development of supplementary guidance material,
• The launch of a Dangerous Goods Occurrence Reporting Alert System that provides a mechanism for airlines to share information on events involving undeclared or misdeclared dangerous goods,
• The development of a Safety Risk Management Framework specifically for the carriage of lithium batteries.
• The launch of CEIV Lithium Batteries to improve the safe handling and transport of lithium batteries across the supply chain.

“Airlines, shippers, manufacturers, and governments all want to ensure the safe transport of lithium batteries by air. It’s a joint responsibility. The industry is raising the bar to consistently apply existing standards and share critical information on rogue shippers. But there are some areas where the leadership of governments is critical. Stronger enforcement of existing regulations and the criminalization of abuses will send a strong signal to rogue shippers. And the accelerated development of standards for screening, information exchange, and fire containment will give the industry even more effective tools to work with,” said Willie Walsh, IATA’s Director General

Global chemical giant BASF is going to build a commercial battery-recycling, black-mass plant in Schwarzheide, a town in Brandenburg, eastern Germany.

BASF’s new battery-recycling black-mass plant

The production of black mass, which contains high amounts of lithium, nickel, cobalt, and manganese – the key metals used to produce cathode active materials – is the first step in the battery recycling process.

BASF says that its new plant will strengthen its production of cathode active materials – the main component of lithium-ion batteries – and battery recycling hub in Schwarzheide. It will have an annual processing capacity of 15,000 tons of electric vehicle batteries and production scrap. It will create around 30 new production jobs, and it’s expected to launch in early 2024.

The black mass will then go to BASF’s commercial hydrometallurgical refinery for battery recycling, which will be built in around three years. (Hydrometallurgy refers to the application of aqueous solutions for metal recovery from ores.)

Dr. Peter Schuhmacher, president of the catalysts division at BASF, said:

With this investment in a commercial-scale, battery-recycling, black-mass plant, we take the next step to establish the full battery recycling value chain at BASF. This allows us to optimize the end-to-end recycling process and reduce the CO2 footprint.

The closed loop from end-of-life batteries to [cathode active materials] for new batteries supports our customers along the entire battery value chain, reduces the dependency from mined raw materials, and enables a circular economy.

The company notes that the site is ideal for escalating battery recycling activities due to the presence of many EV makers and cell producers in Central Europe.

Over the past few months, oil and commodity markets have been taking out fresh highs after the shuttering of Ukrainian ports, sanctions against Russia, and disruption in Libyan oil production sent energy, crop, and metal buyers scrambling for replacement supplies. Russia is one of the world’s biggest exporters of key raw materials, from crude oil and gas to wheat and aluminum, and the possible exclusion of supplies from the country due to sanctions has sent traders and importers into a frenzy. But the Ukraine crisis is only layering onto another more powerful trend: the global transition to low-carbon energy.

The energy transition is driving the next commodity supercycle, with immense prospects for technology manufacturers, energy traders, and investors. Clean energy technologies require more metals than their fossil fuel-based counterparts, with prices of green metals projected to reach historical peaks for an unprecedented, sustained period in a net-zero emissions scenario.

But few, if any, green metals have witnessed a price explosion as epic as that of lithium.

After surging 500% over the past year, lithium prices have doubled again this year in one of the biggest commodity bull runs in recent history thanks to the EV boom.

But Goldman Sachs is now telling the lithium bulls to slow their roll: according to GS, the lithium bull run is about to reverse and go through into deep correction thanks to an oversupply of the commodity.

In a research note entitled “Battery Metals Watch: The End of the beginning,” GS says there’s been “a surge in investor capital into supply investment tied to the long term electric vehicle (EV) demand story, essentially trading a spot driven commodity as a forward-looking equity. That fundamental mispricing has in turn generated an outsized supply response well ahead of the demand trend.”

The Wall Street bank says investors are fully aware that battery metals will play a critical role in the 21st century’s global economy. “Yet despite this exponential demand profile, we see the battery metals bull market as over for now.” GS has, however, conceded that the long-term prospects for the sector remain strong.

Goldman has predicted that lithium prices will fall to an average of just under U$54,000 per tonne this year and just over $16,000 in 2023 down from an average of above U$60,000.

Related: Anti-Oil Lobby Faces Reality Check As Global Demand Is Set To Break Records

Peering at lithium price charts, Lithium carbonate prices in China were at 477,500 yuan/tonne ($71,625/tonne) in June, equating to a 4.4% pullback from the all-time high of 499,521 yuan/tonne ($74,928/tonne) attained in early April. Therefore, the charts appear to suggest that the massive rally is now taking a breather.

Not everyone though agrees with Goldman’s bearish call. Here are 3 reasons why GS might have missed the mark.

1. Goldman Sachs Got the Fundamentals Wrong

Rodney Hooper of RK Equity says he strongly disagrees with the analysts’ findings on both supply and demand.

“My biggest issue with the report is that it will discourage upstream investment in mining. We clearly haven’t seen sufficient upstream investment to meet current and future demand,’’ he has told the Investing News Network (INN).

Also speaking with INN, Daniel Jimenez of iLi Markets has corroborated Hooper’s remarks saying that analysts at the investment bank are overestimating supply and underestimating demand.

According to Goldman Sachs analysts, global demand for lithium carbonate equivalent (LCE) will clock in at ~1.2 million metric tons (MT) by 2025.

In contrast, top lithium producer Albemarle (NYSE:ALB) is calling for around 1.5 million MT LCE, while Chinese giant Ganfeng Lithium (OTCPK:GNENF,SZSE:002460) expects around 1.6 million MT during the same period.

“We think that lithium producers have better industry insights and truthful talks with most of the original equipment manufacturers (OEMs) they supply. “On the supply side they are extremely optimistic in terms of the lepidolite production that could come from China in the coming years, which is also not realistic,” Jimenez has said.

2. Lithium Market Forecasting Is Difficult

As INN notes, Goldman Sachs is not the first Wall Street expert to have its lithium forecast called out by experts in the lithium field. BMI says this has happened before:

“We’ve seen this before, we will see it again. Goldman Sachs: you can’t just add up all the lithium mine level potential and make an oversupply call … the speciality chemicals world is more nuanced than iron ore. It’s why the world doesn’t rely on investment banks for research any more, ” Benchmark Mineral Intelligence’s Simon Moores said in a tweet after the Goldman Sachs report came out.

BMI says that lithium is a specialty chemical, not all lithium is created equal, and not all auto and battery makers have the same needs. There are numerous constraints to bringing new supply into the market, and delays are common for new projects, as well as for producers looking to expand their existing operations.

Hooper notes that many analysts tend to get both demand and supply wrong, “The best indicator of battery-grade demand is cathode production. Historical analysis shows that demand linked to cathode production has the highest correlation to lithium prices–this indicator flagged a demand/supply deficit in late 2020.”

3. The Industry Cannot Rely on China Alone

According to Goldman Sachs, the most “significant” new lithium supply will come from China, where companies have invested in new hard rock and brine projects.

However, Benchmark Mineral Intelligence has countered this view by pointing out that known domestic Chinese spodumene and other hard rock resources are of low quality, which is the main reason why Chinese converters are increasingly turning to Australia for supply instead.

BMI says Chinese brine resources are also low quality and have always struggled to produce sufficient battery-grade quality lithium. For instance, production of lithium from China’s Qinghai province has struggled to ramp up production despite over a decade of efforts, including by electric car maker BYD Co. (OTCPK:BYDDY).

BMI concedes that China’s deposits of lepidolite, which GS says will add significant new supply volumes, may have the potential to help bridge the deficit in coming years. However, they too are unlikely to lead to oversupply because China’s  lepidolite processing has a high waste-to-ore ratio of 20:1, high waste-disposal costs as well as high processing costs, all of which make it a marginal source of lithium.

Can the Rally Continue?

And not the million-dollar question: does the epic lithium rally still have some gas left in the tank?

According to BMI, contract prices are likely to continue to rise as a lagged effect of the major step-change in spot pricing over late 2021 and 2022 while spot prices are likely to fall, with the two prices coming into more of an equilibrium than the current situation.

On the other hand, Jimenez says that structurally, lithium prices are likely to remain high through 2025 to 2026, at least “Now high means above US$40 per kilogram, which is significantly higher than the incentive price to develop a marginal-cost greenfield project. Whether the price will be U$40, U$60, U$80 or U$120 is a difficult call to make,’’ he has declared.

By Alex Kimani for Oilprice.com