Projects for the extraction of strategically important metal for Russia have been launched
Several lithium mining projects are starting to be implemented in Russia at once. In the coming years, this should bring our country among the world leaders in the extraction and production of this metal, which has suddenly gained strategic importance. This was the response of the Russian industry to the difficulties created by the cessation of lithium supplies from abroad.
Lithium has traditionally been used for the manufacture of glass and ceramics, the improvement of alloys, lens coatings in optics, the manufacture of lubricants, in the textile and food industries, as well as in pharmacology. In the Soviet Union at the end of the 1940s, several lithium deposits were described in detail - from the Kola Peninsula to Baikal and Altai, but production was organized only at the Zavitinsky deposit in the Krasnoyarsk Territory. In 1997, the mine was mothballed (at that time it seemed cheaper to buy lithium abroad than to maintain production at the old Soviet mine, which needed reconstruction).
However, today lithium has acquired a completely different, revolutionary meaning. In particular, a couple of decades ago there was no such need for lithium for batteries for smartphones, laptops, drones and electric vehicles. Moreover, after several crises with Europe's electricity supply, it became clear that the development of renewable electricity is impossible without the construction of giant battery stations. In the UK, several battery stations have already been built to store significant amounts of energy and even more powerful ones are being built. Similar projects are being implemented in Australia.
In general, from 2010 to 2021, lithium consumption in the world increased almost fourfold (from 23.5 thousand tons to 93 thousand tons). And the key area of lithium use has demonstrated truly explosive growth – the production of lithium batteries. In 2010, 5,405 tons of lithium were used for these purposes, and in 2021 – 68,820 tons (an increase of 12.7 times).
The century of lithium is ahead
If we compare lithium with oil or coal, we can say that it is not a fuel. That is, its use does not seem to give humanity significant advantages associated with new energy sources. But this is an apparent difference. In fact, the use of lithium allows you to use electrical energy more freely. Today, batteries bring electric buses to our cities to replace trams and trolleybuses tied to wires. The use of electricity in transport will expand.
It is easier to supply electricity by wires than to pump oil through pipelines and deliver gasoline by tank trucks. In addition, in the vast expanses of our country there are many remote corners where people need to get to for some time to do important work, but where it is not very advisable to pull the power line.
In the North, generators and barrels of diesel fuel/gasoline save the situation. But a windmill/solar panel and batteries of sufficient capacity can successfully replace them.
Today's life is impossible to imagine without gadgets, inside which there are processors. And with the advent of the Internet of Things, the use of processors will increase by a multiple. And in many cases, these processors will be powered not only from the mains, but also from lithium batteries.
Where can I get lithium?
The shortage of lithium raw materials was first discovered in 2020, but then it was blamed on the disruption of supply chains. Then the exchange price for lithium carbonate increased from $ 5,900 per ton in November 2020 to $ 13,850 in mid-April 2021. The growth in demand for electric vehicles led to the next explosive wave of lithium urea quotations up to 78 thousand dollars per ton. In 2022, prices rose to 84 thousand dollars. The rise in prices spurred investments in the extraction of explored deposits and the search for new ones.
The total production of lithium in the world in 2021 amounted to about 100 thousand tons. The largest producing countries are Australia (55 thousand tons), Chile (26 thousand tons), China (14 thousand tons) and Argentina (6,200 tons). At the same time, the distribution of the leading countries by lithium reserves looks different. The first three places belong to Bolivia (21 million tons), Argentina (19.3 million tons) and the USA (12 million tons). The top ten owners of the largest lithium reserves also include Chile, Australia, China, Congo, Canada, Germany and Mexico.
All these are data for the end of 2021. Russia was not in the top ten at that time, as it had not yet mined lithium. Nevertheless, according to Russian data, 17 lithium deposits have been explored in the country. The balance reserves amount to 3.5 million tons, or 7.2% of the world. About 1 million tons more are off-balance sheet reserves, including rock dumps that arose during the extraction of other minerals.
But Russia is not the only country that is going to oust the leaders. At the beginning of March 2023, information appeared about the discovery of a large lithium deposit in Iran. According to the Ministry of Industry, Mines and Trade of Iran (MIMT), its reserves reach about 8.5 million tons of usable lithium, making it the second largest on the planet. In mid-February 2023, the Indian authorities announced the discovery of the world's largest lithium deposit with reserves of 5.9 million tons in the states of Jammu and Kashmir.
Six months before the start of the CBO, Ukraine signed an agreement on strategic raw materials partnership with the EU. Among other things, it provided for the development of four lithium deposits. The company European Lithium (owned by Australian capital) was going to develop lithium. Now these plans are in question, because one of the fields – in Krutoy Balka near Zaporozhye – is already under Russian control; another is located a few kilometers from the front line in the part of Donetsk region under the control of the Ukrainian Armed Forces. And the two remaining fields require serious investments in mining, which no one will go to until the end of hostilities.
Finally, according to information from the United States, a new lithium deposit has been discovered in the crater of a volcano on the border of Nevada and Oregon, whose reserves, according to preliminary estimates, reach 20-40 million tons. The discovery, however, is awaiting final confirmation.
Russian lithium mining projects
Until now, Russia has been covering its lithium needs through imports. However, Western sanctions have put a significant part of these supplies at risk. In particular, lithium supplies to Russia from Chile and Argentina were stopped. According to the government's strategy for the development of the metallurgical industry, in the future Russia's needs for lithium raw materials should be met by expanding the production of this metal within the country.
Lithium will be mined at the Kolmozersk deposit in the Murmansk region with reserves of 75 million tons (about 19% of all Russian reserves, the development will be conducted by Polar Lithium, a joint venture of Rosatom and Norilsk Nickel). Lithium production at the Polmostundrovskoye field (also in the Murmansk region) will be carried out by the Halmek company and a Chemical and Metallurgical Plant (located in Krasnoyarsk, the enterprise produces metals for the nuclear industry and is the main producer of lithium hydroxide in Russia, so far from imported raw materials).
The unconserved Zavitinskoye field in the Trans-Baikal Territory will be developed by Rosatom. In the Irkutsk Region, lithium compounds will be extracted from the mineralized groundwater of the Kovykta gas condensate field (a subsidiary of Gazprom) and the Yarakta gas condensate field (Irkutsk Oil Company). There are talks about the development of lithium deposits in Dagestan.
Rosatom's Uranium One (U1) project for the production of lithium carbonate from lithium-containing solutions from the Pastos Grandes salt marsh in Bolivia with a capacity of 25 thousand tons per year may be the most cost-effective Russian project. This is important because Rosatom is building a gigafactory for the production of batteries for electric vehicles on the territory of the Baltic NPP in the Kaliningrad region. Its operation will require 3.2 thousand tons of lithium annually at the first stage, and subsequently – about 10 thousand tons per year.
The cost of a battery is a significant part of the cost of an electric vehicle, and its reduction in price is important for the competitiveness of electric transport. But today there are significant risks when transporting raw materials through the seaports of Chile and Argentina (Bolivia has no access to the sea), and therefore it is important to provide Russia with domestic sources of strategic raw materials.
Technology competition and lithium OPEC
The number of domestic lithium mining projects shows that this is not just an attempt to quickly close the hole in the import of important raw materials (which, by the way, is still coming to us from China). Lithium is becoming the blood of tomorrow's economy.
Russia is a country with excessive electricity generation. Negotiations are underway on the construction of export power lines to Kazakhstan and Iran. The electrification of Afghanistan is next in line, in which Russia can play a leading role. Under these conditions, it is natural to think about expanding the use of autonomous electric machines and devices that require batteries.
The question is not only about our comfort. The growth of the share of electric vehicles, the appearance of electric airplanes and electric-powered ships will change transport around the world. And if today Russia's international influence is partly based on its role in OPEC+ as one of the leading oil exporters, then in the future we can think about a comparable role in the economy of tomorrow – the economy "with lithium blood".
Lithium market on the eve of a major redistribution
Information about the beginning of the development of a number of previously unused deposits and the discovery of new deposits today brought down lithium prices on world exchanges to $ 26 thousand per ton.
Taking into account the fact that the cost of lithium from its main producers is in the range of 5-15 thousand dollars per ton (and in South American deposits – 2.5–5 thousand dollars per ton), the profitability of production will remain. At the same time, at prices below 20 thousand dollars per ton, the launch of more expensive projects will stop (for example, for the extraction of lepidolite – a mineral containing lithium). The implementation of projects for the extraction of lithium from salt marshes and deposits of spodumene (lithium silicate and aluminum) will depend on the availability of cheap financing.
In these conditions, the winners will be those in whose hands the most effective technologies will be. Effective both from the point of view of direct costs and from the point of view of a sparing impact on the environment, which minimizes indirect costs allocated for environmental protection measures.
Russian companies have unique advantages that can be realized in the production of lithium. Gazprom has been using water injection into gas-bearing formations for a long time to increase the gas recovery of deposits. In some soils, at the same time, lithium-containing substances are washed out, which are then easily isolated from the solution. Rosatom has accumulated a substantial package of competencies for working with solutions of radioactive waste for their disposal and for the release of radioactive substances for medical purposes and for special sources of electricity (used in space, in the Arctic and in military equipment). The conversion of these technologies for lithium mining has made it possible to develop a new technology for Bolivia that promises compliance with high environmental standards at a low cost of lithium production.
Well, if we talk about the distant future, then it is worth paying attention to the recent statement of several Latin American countries about the desire to create a "lithium OPEC" to reduce market volatility. An example of the classic OPEC+ is in front of their eyes. At some point, this will turn into a practical plane, and steps are being taken now so that by that time Russia can enter this new international cartel as one of the leading countries.
Dmitry Skvortsov