Here’s how mineral supply chains for EV batteries are being ramped up
A plan has been hatched to expand and diversify critical mineral supply chains globally for the booming EV battery industry – will it work?
There’s an urgent need for critical minerals to meet the growing demand for EV batteries, battery storage, and more. Electrek spoke with John DeMaio, CEO of EV battery mineral processor Graphex Technologies, about how mineral mining and processing is being ramped up and why it’s a vital part of the EV revolution.
Electrek: Why do we need to expand and diversify critical mineral supply chains?
For battery storage, EVs, and semiconductors. EV batteries need more of certain “critical minerals.” The top five for lithium-ion batteries are lithium, nickel, cobalt, manganese, and graphite.
There currently aren’t enough operational mines for these critical minerals for a robust EV battery supply chain. We also need to expand critical mineral processing and recycling capacity.
We also need to diversify our critical minerals sources. China currently dominates the supply chain, but many countries don’t want to be dependent on just China, so they’re looking to onshore, nearshore, or at least friendshore supply lines.
There’s a lot of momentum, but long lead times, high upfront costs, and other challenges can make it tough for new projects to get off the ground without secure sources of favorable funding.
Electrek: I guess that’s where the Minerals Security Partnership comes in. What is it, and has it achieved anything yet?
John DeMaio: The Minerals Security Partnership (MSP) [which launched in June 2022] is an alliance made up of 13 countries [including the US] and the EU, and it’s likely to expand. It’s working to drive public and private investment in critical mineral projects globally.
Last week, the MSP held its inaugural ministerial meeting in the UK, and that resulted in the agreement to “drive responsible investment” in 11 projects in mining or extraction, 4 in processing, and 1 in recycling. That’s going to help to expand and diversify the critical mineral supply chain across continents and mineral types.
How is the MSP impacting critical mineral mining and processing?
The MSP fosters cross-border collaboration, and that’s essential for critical mineral mining. Geology predetermined where these minerals lay in the ground literally epochs ago, so we need to make the most of the current layout. Certain countries that need a lot of minerals to manufacture batteries don’t have enough to build out a mine-to-battery supply chain domestically, while other countries have plenty of critical minerals to tap but less demand from local EV manufacturers for battery inputs.
Mining thrives on far-flung cooperation, but processing thrives on local investment. Battery and EV manufacturers benefit from shorter supply distances to mineral processing locations, which are geographically flexible. Countries can build out their mineral processing capacity anywhere that companies can source the permits, build or renovate the plants, and train the talent. At Graphex, we’re assembling one of the first large-scale mine-to-battery supply chains for natural graphite anode material in North America.
Do MSP countries qualify for US EV incentives via the Inflation Reduction Act (IRA)?
MSP helps countries coordinate their support for critical mineral projects across borders but doesn’t – at least, not yet – open up members for IRA tax credits. But multiple countries within the MSP already have free-trade agreements with the US, such as Canada, Australia, and, most recently, Japan. Rumor has it that the US is currently negotiating free-trade agreement deals with other groups within the club, such as the UK and EU.
IRA incentives apply only to EVs assembled in North America that meet certain geographic supply chain thresholds for critical minerals and battery components. To qualify for the full IRA $7,500 tax credit this year, vehicles have to have at least 50% of their battery components produced and at least 40% of their critical minerals extracted, processed, and/or recycled either in North America or in a country with which the US has a free trade agreement.
I’m optimistic that the MSP is going to help to build out a secure, diversified battery mineral supply chain to support EV growth. It’s prioritizing promoting responsible practices, and that’s going to set a high standard for project operations that will, I think, continue to drive the nearshoring trend.
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Photo: ABB, electric mining truck
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Oil pumpjacks operate at Daqing Oilfield at sunset on November 18, 2024 in Daqing, Heilongjiang Province of China.
Vcg | Visual China Group | Getty Images
Energy supermajors are being forced to confront some tough choices in a weaker crude price environment, with generous shareholder payouts expected to come under serious pressure over the coming months.
U.S. and European oil majors, including Exxon Mobil, Chevron, Shell and BP, have moved to cut jobs and reduce costs of late, as they look to tighten their belts amid an industry downturn.
It reflects a stark change in mood from just a few years ago.
In 2022, the West’s five biggest oil companies raked in combined profits of nearly $200 billion when fossil fuel prices soared following Russia’s full-scale invasion of Ukraine.
Flush with cash, the likes of Exxon Mobil, Chevron, Shell, BP and TotalEnergies sought to use what U.N. Secretary-General António Guterres described as their “monster profits” to reward shareholders with higher dividends and share buybacks.
Indeed, the amount of cash returns as a percentage of cash flow from operations (CFFO) has climbed to as much as 50% for several energy companies in recent quarters, according to Maurizio Carulli, global energy analyst at Quilter Cheviot.
It’s better to cut buybacks than dividends: For investors, buybacks are gravy, but dividends are the meat.
Clark Williams-Derry
Energy finance analyst at IEEFA
In today’s environment of weaker crude prices, however, Carulli said this policy risks taking on new levels of debt beyond what could be considered a “healthy” balance sheet.
BP and, more recently, TotalEnergies have announced plans to take steps to reduce shareholder returns.
Quilter Cheviot’s Carulli described this as a “sensible change in direction,” noting that other oil majors will likely follow suit.
Thomas Watters, managing director and sector lead for oil and gas at S&P Global Ratings, echoed this sentiment.
Oil refinery at sunrise: an aerial view of industrial power and energy production.
Chunyip Wong | E+ | Getty Images
“Oil companies are under pressure as crude prices soften, with the potential for prices to fall into the $50 range next year as OPEC continues to release surplus capacity and global inventories build,” Watters told CNBC by email.
“Faced with the challenge of sustaining these returns in a lower-price environment, many will look to reduce costs and capital spending where they can,” he added.
Dividend cuts ‘would send shivers through Wall Street’
Clark Williams-Derry, energy finance analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), a non-profit organization, said trimming the share buybacks is likely Big Oil’s easiest option.
“Over the past few years, oil companies have used buybacks to return cash to investors and prop up share prices. And it’s better to cut buybacks than dividends: For investors, buybacks are gravy, but dividends are the meat,” Williams-Derry told CNBC by email.
“A cut in a dividend would send shivers through Wall Street,” Williams-Derry said.
Saudi Arabia’s state oil producer Saudi Aramco did just that earlier in the year, slashing the world’s biggest dividend amid an uncertain outlook for oil prices.
Brent crude futures year-to-date.
IEEFA’s Williams-Derry linked the move to a steady weakening of the Saudi Aramco’s share price through most of this year, noting that other private oil majors will want to avoid the same fate.
Ultimately, Williams-Derry said oil majors likely have three questions to consider now that the Ukraine boom in oil prices has faded.
“Do they keep taking on new debt to fund their shareholder payouts? Do they slash buybacks, eliminating one of the major factors propping up share prices? Or do they cut back on drilling, signaling weaker production in the future?” Williams-Derry said.
“There are risks to each choice, and no matter what they choose they’re bound to make some investors unhappy,” he added.
Big Oil outlook
For some, Big Oil’s current state of play is not nearly as bad as it might have been.
“It perhaps hasn’t been as gloomy as people expected earlier in the year, because you’ve had this narrative, really since the announcement of Trump’s tariffs back in April, that the oil market was meant to go into a glut and a period of oversupply later in the year,” Peter Low, co-head of energy research at Rothschild & Co Redburn, told CNBC by video call.
“What’s actually surprised people is how resilient oil prices have been because they have stayed in that $65 to $70 a barrel range, more or less,” he added.
Oil prices have since slipped below this range.
International benchmark Brent crude futures with December expiry traded 0.4% lower at $64.97 per barrel on Friday, while U.S. West Texas Intermediate futures with November expiry dipped 0.3% to trade at $61.24.
“The question, probably less for 3Q and perhaps more for 4Q, is really to what extent distributions and buybacks in particular might need to be to cut to reflect a weaker commodity price environment,” Low said.
“I think given that 3Q was OK, they will probably wait to see what happens in the coming weeks and months and 4Q would be a more natural point for them to revisit shareholder distributions,” he added.
TotalEnergies and Britain’s Shell are both scheduled to report third-quarter earnings on Oct. 30, with Exxon Mobil and Chevron set to follow suit on Oct. 31. BP is poised to report its quarterly results on Nov. 4.
A new whitepaper by heavy truck makers PACCAR and Dragonfly Energy that incorporates real-world fleet trial data and Environmental Chamber Testing conducted at the PACCAR Technical Center seems to indicate that over-the-road truck drivers are ready to embrace battery power and reduce emissions – just not while they’re driving.
The whitepaper, titled Reducing Idle Time & Fuel Costs: Lithium Powered Solutions for Commercial Fleets, looked at different ways to reduce harmful diesel emissions across the duty cycles of a number of different fleet operations, and what they found was that powering a truck’s auxiliary and cabin systems with a high-voltage lithium-ion battery dramatically reduced engine idle time even under worst-case operating scenarios.
Another report by a group called the Clean Air Task Force showed that idling heavy-duty diesel engines while drivers are “hoteling” in their trucks (they’re parked, but running the engine to power the sleeper cab’s climate controls, kitchens, or electronics) exacts a heavy toll on both drivers and shipping fleets.
Idling not only burns fuel and increases operating costs at 0 MPG, it also emits a dangerous cocktail of harmul pollutants that pose direct health risks to drivers, rest stop employees, and nearby communities. Diesel exhaust contains fine particulate matter (PM), nitrogen oxides (NOₓ), and numerous airborne toxins that are known carcinogens, making them a serious problem even to those who think climate change is a global conspiracy from “Big Science” to keep those plucky young oil billionaires in the place.
From a mechanical standpoint, extended idling also accelerates engine wear, degrades emission-control systems, increases maintenance, and shortens engine life.
Battle Born semi batteries
By adding a relatively high capacity hybrid battery (like Dragonfly Energy’s Battle Born brand batteries) to the something like a PACCAR Kenworth T680 (at top), drivers can stay parked for several hours, operating their sleepers’ refrigerators, ACs, or heaters without the noise and emissions and costs of diesel – and they probably sleep better too, without the drone of neighboring diesels cranking on around them all night.
“We believe idle reduction remains one of the most immediate and cost-effective ways fleets can reduce fuel consumption and emissions while improving driver comfort. But just as important, the industry is increasingly focused on operational efficiency and maximizing asset utilization,” explains Wade Seaburg, chief commercial officer at Dragonfly Energy. “We believe our collaboration with PACCAR not only validates the performance of our LiFePO₄-powered solutions, but also highlights how they help fleets maximize uptime, extend equipment life and get more out of their assets.”
The electrification of the auxiliary systems also reduces engine hours, stretching out the time between scheduled maintenance and reducing operational downtime.
In other words, the hybridization of OTR trucks is a win-win-win. The full whitepaper is available for download at BattleBornBatteries.com/Lithium-Powered-Idle-Reduction. Take a look at it yourself, then let us know what you think of the idea in the comments.
SOURCE | IMAGES: PACCAR, Dragonfly Energy; via AP Newswire.
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French car brand Renault believes they’ve got the key to more affordable EV batteries, and their new LFP tech promises to slash the costs of production by 40%. The result? New, desirable EVs with a sub-20K price tag that aren’t made in China.
Spanish news site Motorpasión is reporting that Renault, like Ford, is embracing a more affordable lithium-iron phosphate (LFP) battery chemistries that are safer, cheaper, and less dependent on rare mineral mining than conventional li-ion batteries.
That’s a big change from the recent past. Because they’re less energy dense and weigh a bit more than comparably-sized lithium-ion NMC (nickel-manganese-cobalt) batteries, European automakers looked down on LFPs. But with Chinese automakers like BYD, MG, and Leapmotor flooding Europe with affordable LFP-powered EVs, that stigma is fading fast.
Fun, affordable LFP vehicles
The stability, battery life, and cost advantages of LFP have become too compelling to ignore — especially as global lithium and nickel prices continue to fluctuate, making long-term business projections difficult. Renault’s decision to embrace LFPs then, is less about catching up on the Chinese’ technology than it is about catching up catching up on the Chinese’ economics, and acknowledging that affordability is the real barrier to mass adoption.
That was the thinking behind Renault’s relaunch of the R5 E-TECH (sold as the Le Car in the US) and the announcement that a new Twingo would be coming soon.
It was also the thinking behind the French carmaker’s decision to launch the new Ampere vehicle software development sub-brand back in 2023. At the time, the stated goals were to improve (what are now called) Renault’s software-defined vehicles and, separately, to reduce manufacturing costs of new EVs by 40% – which, if you’ll notice, is just about what the switch to LFP chemistries will enable them to do.
“Creating a new model of company specializing in electric vehicles and software running as of today: How better to illustrate our revolution and the boldness of our teams?” asked Luca de Meo, Renault Group CEO, at Ampere’s launch. He answered his own question, saying, “Instill a sustainable corporate vision and ensure it is reflected in each and every process and product. Build on the Group’s strengths and review the way we do everything. Form a tight-knit team and work for the collective. Harness our French roots and become the leader in Europe. Assert our commitment to our customers, our planet and those living on it.”
Renault is set to launch an all-new, all-electric version of its iconic Twingo minicar from the 1990s in the next few months (at top). The car is targeted straight at the BYD Dolphin and is expected to have a starting price of about €17,000 (just under $20,000 US).
SOURCE: Motorpasión; images via Renault.
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
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