Context: Recently, the United Nations Conference on Trade and Development (UNCTAD) released a report ‘Commodities at a glance: Special issue on strategic battery and minerals’.

• The report facilitated research into battery technologies that depended less on critical raw materials and had the potential to provide higher energy density.
• Energy density is the amount of energy that can be stored in a given mass of a substance or system, i.e. a measure of storage of energy.

Key Points

• Uncertain Supply: The report highlighted that the supply of raw materials to produce rechargeable batteries is uncertain.
• Lithium, natural graphite and manganese are critical raw materials for the manufacture of rechargeable batteries.

Rising Demand:

• Integration of EVs: There has been a rapid growth in demand for rechargeable batteries due to the gradual integration of electric vehicles (EVs) in global transportation.
• The sales of electric cars have increased by 65% in 2018 from 2017 to 5.1 million vehicles and it will reach 23 million in 2030.
• Increased Use of Raw Material: With the increasing number of EVs, the demand for rechargeable batteries and the raw materials used in them have also increased.
• The worldwide market for cathodes for lithium-ion batteries was estimated at $7 billion in 2018 and is expected to reach $58.8 billion by 2024.
• The demand for raw materials used to manufacture rechargeable batteries will grow rapidly as other sources of energy lose their importance.

Concerns:

• Limited Suppliers: The security of supplies is a concern for all stakeholders because the production of the raw materials is concentrated in a few countries.
• Over 60% of the world’s Cobalt is mined in the Democratic Republic of the Congo while over 75% of global Lithium is mined in Australia and Chile.
• Prone of Volatility: Any disruption to supply might lead to tighter markets, higher prices and increased costs of rechargeable batteries.
• In 2018, the demand for cobalt surged by 25% from 2017 to 125,000 tonnes, of which 9% accounted for the EV battery sector.
• Cobalt demand would reach 185,000 tonnes by 2023, with about 35% accounting for the EV battery sector, the report said.
• Growth in demand for lithium had been significant since 2015, increasing by 13% per year.

About Li-ion Batteries

• A lithium-ion battery or Li-ion battery is a type of rechargeable battery.
• Li-ion batteries use an intercalated (Intercalation is the reversible inclusion or insertion of a molecule into materials with layered structures) lithium compound as one electrode material, compared to the metallic lithium used in a non-rechargeable lithium battery.
• The battery consists of electrolyte, which allows for ionic movement and the two electrodes are the constituent components of a lithium-ion battery cell.
• Lithium ions move from the negative electrode to the positive electrode during discharge and back when charging.
• They are one of the most popular types of rechargeable batteries used for military, EVs and aerospace applications.

Road Ahead

• Alternative sources of energy such as electric batteries are becoming more important as investors become sceptical of the future of the oil industry.
• There is a need to make a strategy for dynamic monitoring of the raw material cycles, from mining through processing, refining and manufacturing to recycling.
• It will facilitate early detection of supply risks and also enable the development of mitigation strategies at either company or national level.