EconomyFinancialNot everything is lithium: there are concerns about the...

Not everything is lithium: there are concerns about the other minerals necessary for the production of electric vehicles

Different paths the same goal. While the European Union paves the way for electric vehicles with more demanding regulations on emission levels, the United States promotes automotive electrification through subsidies for its purchase. Mexico , which had remained on the sidelines of electrification, recently established a goal for 50% of the vehicles in the country to have zero polluting emissions by 2030.

The “boom” of electric cars around the world will increase the demand for various types of scarce minerals , such as nickel, cobalt or lithium , in addition to other more abundant ones such as copper, manganese or iron.

NMC batteries, which accounted for 72% of batteries used in electric vehicles in 2020 (excluding China), have a cathode made up of nickel, manganese, and cobalt along with lithium. According to Mining.com, the higher nickel content in these batteries increases the range of the electric vehicle, while the cobalt and manganese act as stabilizers, improving its safety.

According to S&P Global, the amount of lithium required to manufacture a medium battery is close to nine kilograms of the mineral.

Today Asia leads the extraction of lithium and the production of cells for batteries. Data from Statista show that out of every three batteries, two were manufactured by companies from this region, including China’s CATL, followed by Korea’s LG Chem and Japan’s Panasonic.

But lithium is not the only mineral needed for the production of electric vehicles. Copper also plays a fundamental role in the operation of lithium batteries and electric motors.

This highly conductive mineral is already an essential element for a car to work. A study by the consulting firm S&P Global indicates that a vehicle with an internal combustion engine requires approximately 24 kilograms of this mineral for its manufacture.

But its proportion is even higher in electric vehicles. The same study indicates that in the construction of a medium-sized lithium battery, 139 kilograms of copper are needed, that is, 5.7 times more than for a gasoline vehicle.

Another indispensable material for electric vehicles is nickel . According to a report by Adamas Intelligence, lithium batteries use cathodes rich in nickel for their cells, since about 54% use nickel concentrate.

Fernando Alanís, former president of the Mining Chamber of Mexico (Camimex), points out that in the production of an electric vehicle about 40 kilograms of nickel are necessary, while for an internal combustion vehicle the need for the mineral is zero. Australia tops the list of major nickel producing countries, followed by Brazil, Russia, Cuba and the Philippines.

Figures from the consulting firm Statista show that, in just seven years, electric vehicles in the world have gone from just 400,000 units to 11,200,000.

Although Europe is in the lead in terms of the proportion of electric vehicles over total sales, at the end of 2021 in the Asia-Pacific region one million of these units were sold, mainly in China.

Tesla’s sales in the United States place that market in a preponderant place in the shift towards more environmentally friendly mobility schemes.

Although electric vehicles in Mexico still represent less than 0.5% of new car sales, the opportunity that electric cars open up for Mexico is in the supply chain, both for batteries and electric motors.

A value chain that starts underground

Mexico is the seventh largest producer of light vehicles globally , after China, the United States, Japan, India, South Korea and Germany, according to data from the International Organization of Automobile Manufacturers (OICA).

“In the change towards more environmentally friendly mobility schemes, mining has a fundamental role, due to all the amount of minerals that this is going to require,” Alanís told Expansión at the end of his keynote speech within the framework of the VII Durango Mining Congress 2022.

But the private sector is still skeptical about the path that the Mexican government has chosen to capitalize on the lithium value chain. At the end of August, President López Obrador announced the creation of the Lithium body for Mexico, a figure similar to Pemex or CFE, which will be in charge of managing the entire mineral production chain, from exploration and exploitation; to all activities related to its derivative products.

Camimex considers that the exploration and exploitation of lithium will require onerous amounts that the State will hardly be able to afford alone, while the Mexican Association of the Automotive Industry, which represents more than 20 assemblers installed in the national territory, emphasizes that the assemblers already they have contracts with other companies for the supply of batteries and that they do not necessarily feel comfortable with the idea of closing contracts with a state company.

The administration of President López Obrador, who has sought energy sovereignty by strengthening state-owned companies, has halted the granting of new mining concessions, arguing that much of Mexico’s land has been handed over to industry for speculative purposes.

According to data from the Ministry of the Environment, in 2018 the percentage of territory under concession for mining activities was 10.64% , a figure that fell to 8.59% in 2021 due to the fact that the authorities have not granted a single new mining concession.

Today the Sonora lithium deposit concession, which has been listed as the largest in the world, is in the hands of the Chinese Ganfeng Lithium . The giant operates five of the largest lithium deposits in the world, in Australia, China, Argentina and Mexico, and has managed to close lithium supply contracts with automobile manufacturers such as Tesla and BMW.

Camimex expects that in the course of 2022, mining investments will total 5,538.8 million dollars, 15.2% more than last year. Even so, the figure is about 2,500 million dollars lower than the historical record reached in 2012, of 8,043 million dollars, in a sector that represents 2.5% of the local Gross Domestic Product (GDP).

Jaime Gutiérrez, president of the organization, said in a conference at the end of August that the deterioration of the attractiveness of Mexico as an investment destination has contributed to the fact that more than 800 mining projects are currently stopped in the country, waiting for better conditions to be reactivated. .

“Maintaining sustained growth will depend on improving conditions for investment, supporting fiscal competitiveness, certainty and legal certainty, and strengthening mining exploration,” he said in his presentation.

With information from Reuters

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