An anticipated spike in lithium demand is causing companies to reconsider their supply chains, with the International Energy Agency estimating that lithium supply for clean energy technologies needs to increase by 90% to meet its Sustainable Development Scenario. To help meet this target, the need to establish a robust and sustainable recycling industry is more pressing than ever before.
Danielle Spalding, VP of communications & public affairs at battery recycling company Cirba Solutions, says that the rising role of AI and data centres is driving energy storage demand and challenging critical mineral supply, putting an additional squeeze on the industry.
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Mining Technology speaks to Spalding about the current state of the lithium recycling industry, the need for international collaboration to diversify supply chains, and how companies in Australia and beyond can look to bolster their recycling capabilities.
Scarlett Evans (SE): Please talk about the lithium recycling industry at the moment.
Danielle Spalding (DS): The last five years have been very different to the past 25 in the world of recycling.
I think one of the biggest reasons for the shift is the focus on electrification for all. Countries are realising that to compete on a global scale, they have to be able to strengthen domestic supply chains, to do more business domestically and have stronger exports of critical minerals.
The most recent insights show that around 25% of lithium supply will come from recycled materials (what we call secondary content) by 2040. That is a quarter of all lithium supply coming from recycled content. To compare this, cobalt will have over 35% recycled content by 2040 and nickel will have a slightly smaller percentage – around 12%.
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By GlobalDataWe are really at the cusp of a big change in recycling – one that has already begun. The trick at the moment is for us to consider how we can collaborate internationally to generate these additional resources.
Places like Australia and Europe are looking at how to enhance technology to domesticate critical mineral refinement. They are also now having to meet renewable energy targets, reduce emissions, as well as manage the pressures of various geopolitical issues. All of this comes into play when considering the lithium supply chain.
SE: What are the dangers of a monopolised battery supply chain?
DS: The more control you have over the supply chain, the more stable you are. China currently has the highest refinery of any of the critical minerals. More than likely, the majority of battery materials in Australia are going to China or South Korea for refinement. The goal now should be to domesticate more of this process than is currently seen to close the loop on these critical minerals.
We are already seeing mining companies trying to diversify portfolios into recycled content options. There is no longer a focus on one particular element of the supply chain, because companies now know they have to demonstrate the ability to increase their critical minerals supply to meet increasing demand.
SE: What is the process like to establish domestic battery refining facilities? Is it a viable option for places like Australia?
DS: It is a tough pivot for companies that have historically focused on traditional types of refinement, because refining a used battery is very different from refining a virgin material. While there may be some similarities in the feedstock or the input of material in used batteries, the overall process is different by chemistry.
We are seeing Europe and North America currently sharing a lot more with regards to information resources, and you see a lot more of the regulatory landscape changing. In the UK there is the battery passport – every region has its own unique approach to controlling the critical minerals sector.
Because Australia has such vast resources, spread out over huge areas, it has different needs when it comes to transportation networks and infrastructure developments when compared with places in Europe.
So, the shift to more stable battery refining processes is under way, but it is not an easy change for companies.
SE: How is the role of AI changing battery needs?
DS: The computing power of AI tools is only going to increase. That means you need more data powering capacity, which means you need power backups. Often that has to be battery power at this point.
We are going to need a significant increase in battery power as we see this increase in computing demands.
However, there is also an element of AI that is being used in the battery recycling process itself, where it is being used to integrate software into material recovery facilities.
There are now tools being implemented to sort and scan materials for battery content, so it doesn’t go into the wrong kind of processing. We have had multiple versions of AI usage in our own organisation, whether that is through X-ray scanning or AI-learning tools to help it sort the materials coming in.
I think that you are going to see significant battery adoption from an AI computing standpoint ─ and you are going to want to see those companies add in partnerships with organisations that help recycle.
SE: Are there any barriers to adoption when it comes to lithium recycling?
DS: This is going to sound simplistic, but I can assure you, it is not. I think the barrier is education.
A lot of consumers don’t understand they can recycle their batteries and, even if they do, they often don’t know where to go to recycle them.
Part of this education is establishing the infrastructure to help people recycle batteries. In somewhere like Australia where there is a lot of farmland, people may not have a convenient location to bring the batteries from their farming equipment – all of these processes take work and they take time.
It is going to continue to be a little bit higher of a cost, but we have to get up to that point so we can then help make batteries more cost effective. We want to be able to help support a reduction in consumer and business costs so that this recycling process becomes a known, viable option.
SE: Can we expect partnerships between miners and battery storage companies to become commonplace?
DS: We need to see those types of partnerships in greater magnitude for the future to help reach critical mineral supply goals, both in terms of what organisations have set for themselves and the goals that each individual country has set for itself.
Consumers today are demanding a more renewable product overall. Each generation that comes into the market has a higher expectation of that. Even without this environmental, social and governance element, there is also an incentive to strengthen supply chains from a national security perspective.
SE Looking ahead, where do you see the greatest opportunity for growth or innovation in the lithium recycling space?
DS: There is a significant opportunity to expand the infrastructure necessary to safely collect, process and reuse lithium batteries at scale. We also need to close the education gap so that consumers and businesses better understand the value of lithium battery recycling and the importance of recovering those critical resources to be reused.
Equally important is addressing the economic model of the industry. The industry needs to set reasonable expectations, so we can create a thriving and diversified market for the future.
