Everyone’s talking about electrification, independence from fossil fuels, and zero emissions. Fair enough. But nobody mentions the mountains of stuff we’ll need to dig up to make it happen.
Batteries need lithium, graphite, cobalt, manganese, nickel, and rare earths. Plus copper for everything electric that moves or doesn’t move.
Living in Australia gives me an upstream perspective on this. If Australia can pivot from shipping coal and iron ore to China toward becoming the main supplier of EV materials to the US, Europe, Japan, and South Korea — well, that’s a nice future. Let’s not talk about the ESG implications of EV mining right now.
I’m dabbling in “green materials” as a mini-investor. Australian lithium companies shot through the roof until Ukraine happened and inflation reminded everyone that things cost money. Now might be a decent entry point.
Been following lithium company announcements and watching investors react to drill results. Currently holding shares in two lithium plays myself.
What should you watch for? Here’s my interim research in five points. Just my notes and thoughts, not investment advice.
First, companies go either hard rock or lithium brine. Hard rock costs more upfront but miners can sell lithium hydroxide straight to battery makers. Brine is cheaper and faster — you get lithium carbonate that needs converting to hydroxide.
In hard rock, 1-2% lithium oxide (Li2O) is the industry benchmark. Anyone above 2% like Pilbara Minerals at Greenbushes can count themselves lucky. Generally 1.3% is solid. Mining companies sell spodumene concentrate with 6-7% Li2O. Don’t ask me how they make the concentrate — it just appears.
Brine miners work differently. They pump salt-laden groundwater enriched with dissolved lithium from big lakes, mostly in South America. The brine gets pumped to the surface and evaporated in different ponds. Each transfer to a new pond increases purity until the brine becomes 1-2% lithium carbonate concentrate in a chemical plant. Usually gets processed further into lithium hydroxide for the EV industry.
With brine, forget percentages — it’s all about concentration. Benchmark is 400-600mg/L, but can go up to 4000mg/L. Higher concentration and bigger reserves win.
Projects cost serious money, especially hard rock. Brine companies have the upper hand right now, but long-term smart money says hard rock miners have better prospects. Probably makes sense to diversify: companies already producing and hitting record prices (because there’s not enough lithium) — both hard rock and brine — plus smaller companies that won’t start for 2-3 years when EV production really heats up and needs even more lithium.
That’s just my lithium notes. I’m also watching graphite, nickel, and copper closely. Might write about those later. Might not.
This post first appeared in German on reinergaertner.de, where I’ve been writing since 1997 — back when the internet still had that new-car smell. An AI assistant helped with the translation under my supervision. If something reads a bit odd, blame the Denglish in my head.