Inside the only lithium producer in the U.S., which provides critical mineral used in batteries by Tesla, EV makers
SILVER PEAK, NV — On the edge of Western Nevada, hours from a major city and miles down private dirt roads, lies the United States’ only lithium-producing plant.
The nearest town is Tonopah – population 2,179 – where a prospector discovered silver at the turn of the twentieth century. The town’s mining roots are still on display, but the action has shifted to the country’s largest lithium brine operation 45 minutes away.
Silver Peak has been producing lithium since the 1960s. Specialty chemicals company Albemarle acquired the site in 2015 from Foot Mineral Company, and has owned it ever since.
Silver Peak has gained newfound attention in recent years as the energy and transportation sectors race to wean themselves off climate-warming fossil fuels. Lithium’s unique properties make it the common denominator across battery technologies. Forecasts for just how much will be needed in the decades to come varies. Under the International Energy Agency’s most ambitious climate scenario, lithium supply will have to grow 40-fold by 2040 from today’s levels.
The U.S. used to be a leader in lithium production, but it’s since ceded that position to foreign nations, including China. Now the Biden Administration has said that bringing battery supply chains back to U.S. shores is a matter of national importance, and the recently passed Inflation Reduction Act – the largest climate package in U.S. history – underscores this new push towards domestic production of vital materials.
Part of the trouble with bringing new supply online, however, is the sheer amount of land required. The scale of Silver Peak is hard to grasp from picturs. It spans 13,000 acres, and seems to appear out of nowhere, tucked between mountain ranges in the Nevada desert.
Evaporation ponds at Albemarle’s lithium operation in Silver Peak, NV.
Pippa Stevens | CNBC
The sun bears down and it hardly rains – ideal conditions for this type of lithium extraction, which depends on solar evaporation. There’s also salt, a byproduct of production, everywhere.
The huge site is not bustling with activity, which makes it seem even larger than it is. The sun provides much of the labor, and less than 80 people total work at the facility. But it’s sites like these – vast, sweeping operations – that will power the future.
“The U.S. is at the start of really expanding and developing its supply chain domestically for this critical mineral lithium, as well as the broader supply chain for electric vehicles and electrification,” said Karen Narwold, executive vice president and chief administrative officer at Albemarle.
“From Albemarle’s perspective, we think the United States can bring the full supply chain here.”
From hundreds of feet underground…to your car
Lithium can be produced from brine, hard rock or clay, and each method requires its own set of conditions and extraction processes. Silver Peak produces lithium from brine tapped from the Clayton Valley basin.
Salty brine that contains lithium is pumped from between 300 and 2,000 feet underground to the surface. Then, over the course of 18 to 24 months, solar evaporation concentrates the lithium.
This is one of the first of 23 ponds that lithium-rich brine travels through over the course of 24 months at Albemarle’s Silver Peak site. Brine is pumped from as much as 2,000 feet underground to the surface.
Pippa Stevens | CNBC
The brine flows through a series of 23 ponds at the site as it becomes more concentrated, taking on an increasingly vivid turquoise color. The ponds range in size, and the largest is bigger than 700 football fields. As more brine is evaporated, the ponds get smaller and smaller.
About halfway through the process, lime is pumped through the brine, which separates out magnesium that’s found alongside the lithium. Once the brine has moved through all 23 ponds, the remaining lithium is chemically processed into a white powder form known as lithium carbonate.
What happens next depends on the lithium’s end use. Lithium isn’t only used in batteries, but is also found in pharmaceuticals and glass, among other things. Some of the carbonate from Silver Peak is sent to Albemarle’s processing facility in Kings Mountain, North Carolina. There it can be further refined into lithium hydroxide, which is used for electric vehicle batteries. Albemarle counts major automakers, including Tesla, as customers.
Lithium prices skyrocket
Lithium has garnered significant attention in recent months due to a sharp price spike, surging more than 700% since January 2021, according to Benchmark Mineral Intelligence. In some places, including the Chinese spot market, prices are up even more.
In a boom-and-bust cycle of sorts that mirrors other commodity markets, prices rose over the course of 2017 and into 2018 before cratering halfway through the year and falling throughout 2019. At that point the market was oversupplied, which led to a lack of investment in new production. The effects of that slowdown are still being felt. Today, supply is racing to catch up with demand, and some are warning that it simply won’t.
According to forecasts from Benchmark, 600,000 tons of lithium carbonate equivalent will be mined this year — that’s 10,000 tons less than needed. By the end of the decade, the firm envisions annual supply reaching 2.15 million tons of LCE, which will lag demand by a whopping 150,000 tons.
One of the intermediate-stage ponds at Albemarle’s lithium facility. As the brine becomes more concentrated with lithium the pools take on more of a turquoise color.
Pippa Stevens | CNBC
The surge in lithium demand comes from countries and companies doubling down on climate goals in the past few years. That includes automakers, which are announcing ambitious all-electric fleets.
Lithium isn’t the only mineral in these batteries — they also require cobalt, graphite and nickel. Each has its own limitations, and scientists are experimenting with different battery chemistries.
But while it’s possible to swap out some materials, at this point there’s no viable alternative to lithium.
Although lithium is not a scarce resource, getting a new mine up and running can take about seven years. These projects are capital intensive and require many permits, all of which means the industry is slow moving.
Lithium Americas has been trying for more than a decade to get production going at its Thacker Pass clay mine in Nevada, against opposition from environmentalists and Native American tribes. Piedmont Lithium is in the process of developing a spodumene mine in North Carolina, which it hopes will begin producing by 2026.
Albemarle is working on its own North Carolina mine at Kings Mountain. It’s a brownfield mine – meaning it was previously producing – which the company hopes will help it speed past the hurdles that delay new projects. Albemarle also has processing facilities in the state.
Extractive industries are resource-intensive by their very nature and can be highly disruptive to local ecosystems. But it’s hard to see how the world can move away from fossil fuels without new lithium production. An electric vehicle requires more than six times as many mineral inputs relative to internal combustion vehicles, according to the IEA. Under the Paris-based agency’s most ambitious climate scenario, it forecasts 230 million electric cars, buses, vans and heavy trucks on the road by 2030.
This is the last of the 23 evaporation ponds at Albemarle’s Silver Peak lithium site. From here, the lithium is sent for on-site processing where it’s turned into lithium carbonate.
Pippa Stevens | CNBC
Still, some believe these forecasts are far too ambitious, and the world should instead focus on existing resources rather than developing new sites.
Recycling could also become an option – Albemarle is one of the companies working on this – but the market hasn’t yet reached critical mass. Technologies are also being developed to make operations more efficient so that mines yield as much as possible.
Albemarle sets its sights on expansion
Silver Peak is Albemarle’s largest U.S. lithium production site at present, but it constitutes only a small portion of the company’s overall lithium production. Silver Peak produces about 5,000 metric tons per year of lithium carbonate equivalent (LCE), while Albemarle’s Chile operation – in the Salar de Atacama region – has the capacity to produce 85,000 metric tons per year. The operation there uses the same brine production process that was first developed in Nevada.
The company also co-owns two mines in Australia, and operates a number of processing facilities, including in China.
Albemarle is also increasing its footprint at Silver Peak. In Jan. 2021 the company announced plans to double capacity to 10,000 metric tons a year, which the company said is enough to power around 160,000 electric vehicles.
Bags of lithium carbonate at Albemarle’s Silver Peak facility. Some of it is sent to the company’s processing plant in North Carolina, where it can be turned into lithium hydroxide, which is used for EV batteries.
Pippa Stevens | CNBC
Albemarle’s Narwold said the expansion, initially slated for completion in 2025, is ahead of schedule. The company spent the last year and a half constructing 22 new brine-pumping wells, completing the first stage of the expansion.
By the end of this year Albemarle will be pumping at 20,000 acre feet annually, which is equivalent to roughly 18.5 million gallons of water per day. That represents the full extent of Albemarle’s water rights, which is also the entirety of the rights available in the Clayton Valley.
Albemarle is not just a lithium company: it also has bromine and chemicals divisions. But the lithium segment has grown in importance following the price spike and Albemarle’s expansion plans. Lithium now accounts for about two thirds of the company’s revenue, according to Meredith Bandy, vice president of investor relations and sustainability at Albemarle. That’s up from a few years ago, when each division was about one third of overall revenue.
“We’ve been investing in the lithium market for the last couple of years, and that’s starting to pay off in terms of volumetric growth as well as price performance,” she said.
Traditionally Albemarle had long-term, fixed contracts with customers. But this year the company restructured some of those contracts in an effort to capture upside from rising prices. It seems to be paying off.
One of the bright blue ponds at Albemarle’s lithium plant in Silver Peak, Nevada.
Pippa Stevens | CNBC
During the second quarter, Albemarle said net sales from its lithium division jumped 178% year over year. The company raised its full-year guidance three times between May and August, when Albemarle posted second-quarter results. The company will report third-quarter earnings on November 2.
For the full year, Albemarle now expects adjusted EBITDA for its lithium division to grow between 500% and 550% on a year-over-year basis. That’s up from prior expectations of a 300% jump.
“There’s a tremendous amount of demand. The industry really is having to work hard – Albemarle is having to work hard – to keep up with that demand,” said Bandy.
Investors have rewarded the company’s performance. The stock climbed to an all-time high on September 14, during a rocky period in the broader market. Shares have since fallen 18%, but the stock is still up about 8% for the year, with a company valuation around $30 billion.
By comparison the S&P 500 and Nasdaq Composite are down 25% and 33%, respectively, for 2022.
Climate bill: a game changer?
While the vast majority of battery production takes place outside the U.S. — China is a key player, currently refining 56.5% of global lithium, according to Benchmark — the Biden Administration is trying to change that.
In February, the White House announced funding for domestic production of materials and minerals critical to the energy transition. Then, in March, Biden invoked the Defense Production Act for these materials.
Albemarle’s Silver Peak lithium plant spans 13,000 acres.
Pippa Stevens | CNBC
“To promote the national defense, the United States must secure a reliable and sustainable supply of such strategic and critical materials,” a March statement from the White House read, citing lithium as among the “critical materials.”
But the most meaningful initiative, by far, is the recently passed Inflation Reduction Act. The bill, which is the largest climate funding package in U.S. history, focuses on incentives and credits aimed at accelerating the U.S.’ shift towards renewable energy while also jumpstarting domestic manufacturing.
The bill includes measures that will help battery companies on both the supply and demand side. Over time, a greater portion of an electric vehicle’s battery materials must be sourced from the U.S. or one of its free-trade allies in order for consumers to qualify for the tax rebates. Producers can also take advantage of the manufacturing tax credits.
Narwold called the Inflation Reduction Act a “great step forward.”
“It really does give the impetus to start focusing domestically on building that supply chain. No reason why the United States can’t be a significant contributor to that supply chain with the right support, both from the government – state and federal – as well as from the industry,” she said.
Bags of lithium carbonate. This is the end product after the lithium-rich brine has spent about 24 months travelling through evaporation ponds at Albemarle’s Silver Peak plant.
Pippa Stevens | CNBC
– CNBC’s Katie Brigham contributed reporting.
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America voted for inflation, and it got it today, as republicans running the Department of Transportation bowed to their oil donors and finalized a rule to make your cars less efficient, thus costing America an extra $23 billion in fuel costs.
Sean Duffy, who was appointed as Secretary of Transportation on the back of the transportation “expertise” he showed as a contestant on Road Rules: All Stars, a reality TV travel game show, announced the rule on his first day in office.
His original memo promised a review of all existing fuel economy standards, which require manufacturers to make more efficient vehicles which save you money on fuel.
Specifically, the rule finalized today targets the Corporate Average Fuel Economy standard (CAFE), which was just improved last year by President Biden’s DOT, saving American drivers $23 billion in fuel costs by meaning they need to buy less fuel overall. The savings from the Biden rule could have been higher, but were softened from the original proposal due to automaker lobbying.
Sierra Club’s Transportation for All director, Katherine Garcia, responded to the new Duffy rule’s finalization with a statement:
“The Trump administration’s deregulatory, pro-polluter transportation agenda will only increase costs for Americans. Making our vehicles less fuel efficient hurts families by forcing them to pay more at the pump. This action puts the well-being of our communities at risk in every way imaginable. It will lead to fewer clean vehicle options for consumers, squeeze our wallets, endanger our health, and increase climate pollution. The Sierra Club will continue to push back against this administration’s dangerous clean transportation rollbacks.”
The rule had been filed on Mar 16, and review was completed yesterday. Oddly enough, the rule was filed as “not economically significant,” a categorization for government rules that won’t affect the US economy by more than $100 million – which is less than the $23 billion that the DOT’s own analysis says the new rule will cost Americans.
Both we at Electrek and the Sierra Club had a meeting with the government to point out this inconsistency, but both of our meetings were scheduled for today and were cancelled late last night. There seems to have been no public comment period regarding this change in regulations.
DOT isn’t done raising your fuel costs, it wants to do more
Duffy’s original DOT memo says he wants to target all similar standards, rather than just the improvements made last year – so in fact, our headline likely underestimates how much higher Duffy wants to make your fuel costs.
A recent analysis by Consumer Reports shows that fuel economy standards are enormously popular with Americans, and that maintaining the current standards could result in lifetime savings of $6,000 per vehicle, compared to current costs, by 2029. And that fuel economy standards implemented since 2001 have already saved $9,000 per vehicle. Now, imagine the net effect of removing all of those standards, which Duffy has directed the DOT to examine doing.
As we’ve already seen to be the case often with Trump’s allies, the DOT memo lied about its intentions. Just like EPA head Lee Zeldin, who said he wants to make the air cleaner by making it dirtier, Duffy, says he wants to make fuel costs lower by making them higher. The memo attempts to argue that your car will be cheaper if it has lower fuel economy, even though it wont, because buying more fuel will mean you spend more on fuel, not less.
Unequivocally, over here in the real world, dirtier air is actually dirtier, and higher fuel costs are actually higher.
The result of this increased fuel usage also inevitably means more reliance on foreign sources of energy. The more oil America uses, the more it will have to import from elsewhere. Other countries looking to exercise power over the US could certainly choose to raise prices as they recognize that the US has just become more reliant on them.
And, as we know from the most basic understanding of economics, adding more demand means prices will go up, not down. Reducing demand for a product in fact forces prices down, and EVs are already displacing oil demand which depresses oil prices.
Meanwhile, Biden’s higher fuel economy standards would mean that automakers need to provide a higher mix of EVs, which inherently get all of their energy to run not just domestically, but regionally as well. Most electricity generation happens regionally or locally based on what resources are available in your area, so when you charge a car, you’re typically supporting jobs at your local power plant, rather than in some overseas oil country.
But these are just attempts to follow-through on the dirty air, inflation causing promises that the republicans made during the campaign. Mr. Trump signaled he intended to raise your fuel costs (and costs of everything else) during the 2024 US Presidential campaign, when he asked oil executives for $1 billion in bribes in return for killing off more efficient vehicles.
Since he made his way back into the White House (despite that there exists a clear legal remedy stopping insurrectionists from holding office in the US), republicans have tried to follow through on this promise and more – not only trying to make your cars more expensive, but also threatening US energy dominance, sending US jobs to China and illegally attacking clean air laws.
However, whiplash changes in regulatory regimes like this are typically seen as bad for business. Above all, businesses desire regulatory certainty so they can plan products into the future, and there are few businesses with longer planning timelines than automakers.
This is why automakers want the EPA to retain Biden’s emissions rules, because they’re already planning new models for the EV transition. They went through this once before, in the chaos of 2017-2021, where they originally asked for rollbacks but then realized their mistake, and now still complain about the broken regulatory regime caused by the last time a former reality TV host squatted in the White House.
Further, if American manufacturing turns away from the EV transition, or continues to make tepid movement towards it, this will only hand more of a manufacturing lead to China, meaning more decline of American manufacturing (compared to the huge manufacturing boom seen under President Biden).
Finally, the most important problem with DOT’s final rule is that it will increase emissions, which harms your health and increases climate change. Much like the other trends we’ve seen here, this administration doesn’t know much about the basics of climate science, which is already costing America $150 billion a year in increased infrastructure costs related to damage from natural disasters.
And that’s not even counting health costs, which will be even higher. The aggregate of these damages could cost each American born today $500,000 over their lifetime.
But all of these harms will happen to real people. This isn’t reality television, where the intent is to make up drama for views. This is actual harm that’s actually going to be done to Americans, who are having a rough time as the global economy continues to grapple with the long-term disruptions resulting from a pandemic that was exacerbated by the same reality TV host, and of course the ever-present worsening climate change.
And so, Mr. Trump is now trying to follow through on his campaign promises – which, in so many ways, will only make your life costlier, more unhealthy, less stable, and less secure from foreign influence. This is what 49% of America voted for.
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Environment
Podcast: Tesla in Musk/Trump divorce, EV sales in EU, Hyundai’s new electric minivan, and more
In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss Tesla being in the crosshairs of the Musk/Trump divorce, EV sales in Europe, a new Hyundai electric minivan, and more.
The show is live every Friday at 4 p.m. ET on Electrek’s YouTube channel.
As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.
After the show ends at around 5 p.m. ET, the video will be archived on YouTube and the audio on all your favorite podcast apps:
We now have a Patreon if you want to help us avoid more ads and invest more in our content. We have some awesome gifts for our Patreons and more coming.
Here are a few of the articles that we will discuss during the podcast:
Here’s the live stream for today’s episode starting at 4:00 p.m. ET (or the video after 5 p.m. ET:
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Kia believes hatchbacks will make a comeback, starting with the EV4 later this year. The EV4 is Kia’s first electric hatch, and it’s expected to see big demand.
Kia aims to bring back hatchbacks with the new EV4
During its EV Day event earlier this year, Kia showcased four EV4 models, two sedans and two hatchbacks, all of which are fully electric.
The EV4 is part of Kia’s new entry-level EV lineup, which includes other models, including the EV3, EV5, and the upcoming EV2.
Following the launch of the EV4 sedan in Korea in March, Kia is preparing to introduce the hatchback version in Europe. The EV4 will kick off a series of new hatchbacks, which Kia believes could be its secret weapon as an electric alternative to the Volkswagen Golf and other popular models.
Kia’s executive vice president, Ted Lee, believes there is still “big volume” for hatchbacks in Europe that’s up for grabs. During a recent interview with Autocar, Lee confirmed Kia would launch a new series of hatchbacks.
The EV4 is set to kick things off later this year. Unlike the sedan, Kia will build the EV4 hatch in Europe. It will be Kia’s first European-built EV at its plant in Slovakia. The sedan variant will be imported from South Korea.
Kia will launch the EV4 hatch in the UK in October. After that, the new K4 will join the series, which will also arrive in hatchback form. The K4, both hatch and sedan variants, will be imported from Kia’s plant in Mexico.
According to Lee, Kia is in a “strong position in Europe,” especially in the UK. The Korean automaker is currently the third-best-selling brand in the UK, and it is only 300 units away from surpassing BMW.
Although he admitted new Chinese models are creating a “difficult market,” the company is doubling down on the region.
Kia will not get caught up in a price war, Lee explained. Instead, the company aims to continue driving the “sustainable growth” it has created over the past few years. Kia’s sales in Europe have increased by 30% since 2020.
After launching the EV3, Kia said the electric SUV “started with a bang” in January, becoming the UK’s most popular retail electric vehicle. Kia’s compact EV was the best-selling retail EV in the UK during the first quarter and the fourth-best-selling overall.
According to SMNT’s latest registration data, Kia brand sales are up 4% this year, with nearly 52,000 vehicles sold through May. It currently holds a 6.11% market share, up from 6.05% last year.
The EV3 starts at £33,005 ($42,500) in the UK with two battery pack options: 58.3 kWh or 81.48 kWh. The standard battery provides a WLTP range of up to 30 km (270 miles), while the extended range option offers a driving range of 599 km (375 miles).
With the EV3 off to a strong start, the EV4 joining it, and its first electric van, the PV5, rolling out, Kia is laying the groundwork for the “sustainable growth” it’s seeking.
Yesterday, Electrek reported that the EV4 was off to a slow start in Korea with just 831 models sold. However, the disappointing first sales month was due to “limited inventory.”
Ahead of its official launch, we got a sneak peek of the EV4 hatchback after it was spotted driving in Korea (You can watch the video here).
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