**Lithium: An Essential Element for the Energy Shift Amid Western Supply Obstacles**
The worldwide energy shift, propelled by the pressing necessity to address climate change, has led to an increase in the demand for vital metals required for clean technologies. Among these metals, lithium—the backbone of electric vehicle (EV) batteries—holds a crucial position. Nevertheless, both Europe and the United States are presently in a vulnerable state, heavily depending on foreign entities, primarily China, for lithium extraction and processing. Even though they have considerable domestic reserves, the West has not yet managed to take full advantage of them due to environmental and political issues. As nations strive to adopt sustainable technologies, this dependence could become a notable chokepoint.
### **The Significance of Lithium in the Energy Shift**
Lithium is essential for the production of lithium-ion batteries, which are used in EVs, grid storage systems, and numerous portable devices. The transition to electrified transportation and renewable energy sources has propelled lithium into a leading position in industrial demand. The International Energy Agency (IEA) projects that the need for lithium will leap from 165 kilotonnes in 2023 to as high as 1,700 kilotonnes by 2040, largely fueled by initiatives aimed at achieving net-zero carbon emissions.
However, this rising demand presents a geopolitical and supply chain dilemma, especially for the U.S. and Europe. Currently, around 85% of the world’s lithium processing occurs in just three nations: China, Argentina, and Chile. China’s capacity to seamlessly combine lithium mining, processing, and battery production grants it unmatched control over global pricing and supply dynamics, placing the West in a precarious situation.
### **Lithium Resources in Europe: A Potential Yet Unrealized**
Geologically, Europe contains substantial untapped lithium resources. The continent is home to extensive deposits of lithium-containing minerals such as spodumene and jadarite, which, if extracted and processed, could lessen reliance on foreign sources. For instance, the Jadar deposit in Serbia is a premier reserve that holds both boron and lithium within a unique clay mineral called jadarite. Global mining leader Rio Tinto has proposed a project that could yield enough lithium for one million EVs annually for the next 45 years.
However, efforts to develop this mine have encountered considerable resistance within Serbia. Public apprehensions regarding environmental consequences—such as worries over water pollution and inadequate waste management—have hindered advancement. Compounding the situation are domestic political factors fueled by misinformation; locals frequently confuse the planned underground mine with open-pit mining, and unfounded claims about radioactivity continue to circulate.
In other parts of Europe, promising lithium reserves exist in Portugal, Spain, Finland, and along the Czech-German border. Portugal currently produces small quantities of lithium and has the potential for significant expansion. Finland is actively continuing its mining operations and is launching the Keliber lithium project, aiming to generate battery-grade lithium hydroxide. Moreover, Cornwall in England is investigating innovative methods for lithium extraction from granite and geothermal brines, combining resource extraction with low-carbon energy projects, such as utilizing geothermal heat to support local housing developments.
Nevertheless, throughout much of Europe, a long-standing disinterest in mining has resulted in regulatory challenges, public dissent, and a waning expertise in mineral exploration and processing. “We ceased mining exploration decades ago,” notes Jochen Kolb, an economic geologist at Germany’s Karlsruhe Institute of Technology. “Now we lack the industry or regulatory clarity to effectively advance new initiatives.”
### **A Parallel Situation: Lithium in the United States**
The United States has similarly struggled to take full advantage of its mineral resources. Although lithium-rich areas like Nevada and California have been recognized, only a few projects have progressed. A prominent development is the Rhyolite Ridge lithium mine in Nevada, which was recently sanctioned under the Biden administration. Nearby, another initiative at Thacker Pass has also gained momentum. However, procedural delays, environmental lawsuits, and opposition from interested parties have hampered progress.
The U.S. has been attempting to promote domestic production and lessen its reliance on Chinese supply chains through initiatives like the Inflation Reduction Act, which provides tax benefits for green technologies. Yet, mining is a complicated endeavor that demands years of exploration, permitting, and financial backing. Even with policy support, catching up to China’s processing capabilities remains a formidable challenge.
### **China: A Dominant Force in Lithium Supply**
One of the primary reasons behind China’s supremacy in lithium supply chains is its economically efficient processing capabilities. Although some of its lithium resources, like lepidolite, are relatively costlier to extract, China still imports large volumes of raw lithium from various countries, processes it locally, and exports it as refined battery-grade material. This near-monopoly on processing and refinement allows China to exert unmatched control over pricing.
Currently, the lithium market is experiencing a price correction. Following a dramatic surge in 2022 that saw battery-grade lithium prices reach nearly $80,000 per tonne, prices have dropped to $10,000 per tonne by mid