Reuse and Recycling of EV Batteries

Hanjiro Ambrose, PhD

0

August 18, 2020

Lithium Ion Batteries (LIBs)

Big Picture Trends:• Falling costs • 2010 ~ $1000 >>> 2020 ~$150

• Application proliferation • Cars, Buses, Stationary, Trucks, Scooters

• Larger systems • 3x capacity in 6 years

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Intro Technology Materials Recycling Reuse

Critical Energy Minerals

Scandium

Sc21

Yttrium

Y39

Lathanum

La57

Cerium

Ce58

Presdynium

Pr59

Cerium

Nd60

Samarium

Sm62

Europium

Eu63

Europium

Eu64

Terbium

Tb65

Dysprosium

Dy66

Ytterbium

Yb70

Lutellum

Lu71

Ruthenium

Ru44

Rhodium

Rh45

Palladium

Pd46

Silver

Ag47

Osmium

Os76

Iridium

Ir77

Platinum

Pt78

Gold

Au79

Platinum Group and Precious Metals

Rare Earth Elements

Battery Critical Energy Materials

Lithium

Li3

Manganese

Mn25

Cobalt

Co27

Nickel

Ni28

Aluminum

Al13

Copper

Cu29

Graphite

C6

• Current EV Batteries rely on a short list of key materials• 7 of 35 elements on US Department of Critical Minerals List

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Supply RisksMajor mining sites of Cobalt, Lithium, Nickel, and Manganese

21A Vision for a Sustainable Battery Value Chain in 2030: Unlocking the Full Potential to Power Sustainable Development and Climate Change Mitigation

Challenge 2: The battery value chain has significant social, environmental and integrity risks

Scaling up raw material production for batteries over the next decade will come at an unprecedented pace. Four battery metals are impacted the most by this growth towards 2030: lithium by a factor of 6, cobalt by a factor of 2, class 1 nickel by a factor of 24,18 and manganese by 1.2 (see Figure 11). This requires, primarily, a significant increase in infrastructure in specific geographies (e.g. approximately 50% of global cobalt mine reserves are in the DRC, and 99% of lithium reserves are in Chile, Argentina, Australia and China19). It imposes a significant challenge to the battery value chain to manage the increase in raw material supply responsibly across different geographies and stakeholders. This concerns both terrestrial and deep seabed mining.

Terrestrial mining

The increase in raw material supply comes with great potential for economies that are well endowed with battery minerals. Equally, however, it poses significant challenges, as the scale-up in mineral sourcing might be accompanied by negative social, environmental and integrity impacts across different geographies. Detailed impact assessments and the macroeconomic potential of the key battery material supply chains are beyond the scope of this report. As the cobalt supply chain has been linked to particularly severe challenges, it is discussed in greater detail here.

Risks related to cobalt extraction

The DRC is one of the world’s least developed countries.20 Cobalt is a core pillar of its economy, where between 10 and 12 million people depend directly or indirectly on mining and 80% of exports are mining products. Most of the cobalt mined there originates from industrialized operations. Large-scale, industrial mines account for the lion share of the DRC cobalt market and are an important source of national economic value. However, environmental, social and integrity risks have been documented in such operations.21

In addition to material mined in large-scale operations, 15-30% of the DRC’s cobalt supply is extracted by hand using basic tools in so-called artisanal small-scale mines. These mines are often informal and basic international human rights expectations are often not implemented or enforced. However, artisanal mining is an important livelihood for communities. In 2017, an estimated 40.5 million people globally were directly engaged in artisanal mining, compared to 7 million in industrial mining.22

Severe social risks have been well documented in the DRC’s artisanal mining industry. They include hazardous working conditions; deaths due to poorly secured tunnels; potentially various forms of forced labour; the worst forms of child labour; and exposure to fine dusts and particulates and DNA-damaging toxicity.23

Over 250,000 people are estimated to work in dangerous conditions, of which approximately 35,000 are children, with some estimates proposing that as many as 1 million children are affected across the DRC’s mining industry.24 The root cause of child labour is that average households in mining communities are poor and vulnerable to income shocks.25 Different forms of child labour require different interventions, always with a focus on serving children’s best interest.26

Scaling raw material supply comes with several challenges

Cobalt Manganese

128

274

2018 2030

x2.1

229

1,469

2018 2030

x6.4

201842

2,241

1,061

2030

2,171

3,302

x1.5

20302018

19,100

22,600x1.2

Raw material demand in kilo tonnes per annum, base case

NickelLithium (LCE)

Major mining locations for cobalt, lithium, nickel and manganese

x241

1 Demand for class 1 nickel for batteries

Figure 11: Demand for cobalt, lithium, nickel and manganese by 2030

Source: USGS, 2019; McKinsey analysis; expert interviews

21A Vision for a Sustainable Battery Value Chain in 2030: Unlocking the Full Potential to Power Sustainable Development and Climate Change Mitigation

Challenge 2: The battery value chain has significant social, environmental and integrity risks

Scaling up raw material production for batteries over the next decade will come at an unprecedented pace. Four battery metals are impacted the most by this growth towards 2030: lithium by a factor of 6, cobalt by a factor of 2, class 1 nickel by a factor of 24,18 and manganese by 1.2 (see Figure 11). This requires, primarily, a significant increase in infrastructure in specific geographies (e.g. approximately 50% of global cobalt mine reserves are in the DRC, and 99% of lithium reserves are in Chile, Argentina, Australia and China19). It imposes a significant challenge to the battery value chain to manage the increase in raw material supply responsibly across different geographies and stakeholders. This concerns both terrestrial and deep seabed mining.

Terrestrial mining

The increase in raw material supply comes with great potential for economies that are well endowed with battery minerals. Equally, however, it poses significant challenges, as the scale-up in mineral sourcing might be accompanied by negative social, environmental and integrity impacts across different geographies. Detailed impact assessments and the macroeconomic potential of the key battery material supply chains are beyond the scope of this report. As the cobalt supply chain has been linked to particularly severe challenges, it is discussed in greater detail here.

Risks related to cobalt extraction

The DRC is one of the world’s least developed countries.20 Cobalt is a core pillar of its economy, where between 10 and 12 million people depend directly or indirectly on mining and 80% of exports are mining products. Most of the cobalt mined there originates from industrialized operations. Large-scale, industrial mines account for the lion share of the DRC cobalt market and are an important source of national economic value. However, environmental, social and integrity risks have been documented in such operations.21

In addition to material mined in large-scale operations, 15-30% of the DRC’s cobalt supply is extracted by hand using basic tools in so-called artisanal small-scale mines. These mines are often informal and basic international human rights expectations are often not implemented or enforced. However, artisanal mining is an important livelihood for communities. In 2017, an estimated 40.5 million people globally were directly engaged in artisanal mining, compared to 7 million in industrial mining.22

Severe social risks have been well documented in the DRC’s artisanal mining industry. They include hazardous working conditions; deaths due to poorly secured tunnels; potentially various forms of forced labour; the worst forms of child labour; and exposure to fine dusts and particulates and DNA-damaging toxicity.23

Over 250,000 people are estimated to work in dangerous conditions, of which approximately 35,000 are children, with some estimates proposing that as many as 1 million children are affected across the DRC’s mining industry.24 The root cause of child labour is that average households in mining communities are poor and vulnerable to income shocks.25 Different forms of child labour require different interventions, always with a focus on serving children’s best interest.26

Scaling raw material supply comes with several challenges

Cobalt Manganese

128

274

2018 2030

x2.1

229

1,469

2018 2030

x6.4

201842

2,241

1,061

2030

2,171

3,302

x1.5

20302018

19,100

22,600x1.2

Raw material demand in kilo tonnes per annum, base case

NickelLithium (LCE)

Major mining locations for cobalt, lithium, nickel and manganese

x241

1 Demand for class 1 nickel for batteries

Figure 11: Demand for cobalt, lithium, nickel and manganese by 2030

Source: USGS, 2019; McKinsey analysis; expert interviews

Raw Material Demand in kt/year

Cobalt Lithium Nickel Manganese

Global Battery Alliance, (2020). Retrieved from: http://www3.weforum.org/docs/WEF_A_Vision_for_a_Sustainable_Battery_Value_Chain_in_2030_Report.pdf

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Short-term vs. Long-term Constraints

1Wadia, C., Albertus, P., & Srinivasan, V. (2011). Resource constraints on the battery energy storage potential for grid and transportation applications. Journal of Power Sources, 196, 1593-1598. doi:10.1016/j.jpowsour.2010.08.056

• Potential for >>1 billion 40 kWh batteries given current mineral reserves and LIB electrode technologies1

• Lithium and cobalt are the closest lithospheric constraints (depending on technology development!)

• Currently, there is a global ramp-up in production of battery materials

• But, mineral reserves are geographically concentrated which could create supply risks

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On the other hand, however, the Co produced from Cu mining does not necessarilyfollow the trend of global Cu production (Co’s other carrier metal). Almost all the Coproduction associated with Cu comes from mining copper-cobalt ores in the DRC.38

Due to high Co concentration in these ores (typically 0.3% Co and 3% Cu), Co is pro-ducedmainly as co-product of Cu, and producers may be driven by the value of bothmetals simultaneously.39 For example, the Mutanda mine in the DRC, one of world’slargest Co mines, produced 250 kt of Cu and 25 kt of Co in 2016.40 Considering aprice of 5 USD per kg of Cu and 30 USD per kg of Co, !40% of the mine’s revenuecomes from the value of Co. Extraction of Co from Cu mine tailings in the DRC arealso possible, depending on the price ratio between the two metals. In addition,while the DRC accounts for more than 50% of world Co mining production, its Cumining production only accounts for !5% of world production.41 Therefore, it is un-likely that the availability of Co is limited by world Cu production. Rather, Co avail-ability will be greatly affected by the geopolitical stability of the DRC. The challengeswith the supply of Co may be much more dependent upon the stability of the regionthan on the economics. This supply concentration can lead to more significant

Figure 2. Global Aggregated Trade Flows

Widths of flows are proportional to trade value in US dollars (USD); importers are marked in green

and exporters in red.

(A) Aggregated flows of lithium oxide and hydroxide as well as lithium carbonates (does not include

concentrates, which would be dominated by Australia). Flows below 1 million USD in value are not

included.

(B) Global aggregated trade flows of cobalt ores, concentrates, mattes, and other intermediate

products of cobalt metallurgy, including waste and scrap for the year 2015. Flows below 10 million

USD are not included.

Maps created in JFlowMap.33

Joule 1, 229–243, October 11, 2017 235

Cobalt Trade Flows 2015

Olivetti, E. A., Ceder, G., Gaustad, G. G., & Fu, X. (2017). Lithium-ion battery supply chain considerations: analysis of potential bottlenecks in critical metals. Joule, 1(2), 229-243.

• Over half of all cobalt comes from the Katanga Copperbelt in DR Congo

• ~20% of which is extracted by artisanal miners, some of which are children

Mining

Refining

6

Battery Cathode Materials• Potential for reduction in cathode material costs from shift toward low/no-cobalt

0%

20%

40%

60%

80%

100%

2020 2025 2030 2035

Glo

bal M

arke

t Sha

re

LFP

LMO

LMNO

NCM 811

NCM 622

NCM 523

NCM 111

NCA

LCO

Cathode Chemistry

Lower Cobalt Content

0%

25%

50%

75%

100%

Cathode Materials

Battery Materials

Capital Equipment

Overhead

Labor

2019 New Battery Price ~ $157

Battery Design Continues to Evolve2019

0

20

40

60

80

0

100

200

1 3 5 7 9 11 Rem

aini

ng U

sefu

l Cap

acity

(k

Wh)

Vehi

cle

Rang

e (m

iles)

Vehicle Age

Tesla Model S Tesla Model X Chevy Bolt Nissan Leaf (2012)

EV 24kWh: ~25% reduction in battery capacity by 50k miles EV 75kWh: ~10% reduction

in battery capacity with >150k miles

Increasing battery sizes + improved lifetimes = more 2nd life potential

8https://blog.ucsusa.org/hanjiro-ambrose/how-long-will-my-ev-battery-last-and-3-tips-to-help-it-last-longer

Battery Capacity and Lifetime

Martinez-Laserna, Egoitz, et al. "Battery second life: Hype, hope or reality? A critical review of the state of the art." Renewable and Sustainable Energy Reviews 93 (2018): 701-718.

New Battery Price

Second Life DoD Vehicle Second Life

Health

Refurbished Battery

Market Price ($/kWh)

Used Battery Salvage Value

($kWh)

Cost to Refurbish ($/kWh)

250 $/kWh60%

BEV75 0.33 83 51 32PHEV20 0.29 73 43 30

50%BEV75 0.72 180 131 49

PHEV20 0.65 163 117 46

150 $/kWh60%

BEV75 0.33 50 24 26PHEV20 0.29 44 19 25

50%BEV75 0.72 108 72 36

PHEV20 0.65 98 64 34

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Second-life Batteries and Repurposing Costs

$0

$100

$200

New Battery Price(2019)

Second LifeSelling Price

RepurposingCosts

Residual Value

$/kW

h

Battery selling price

Retired battery cost

Testing & Assembly

Transportation

CapEx

Other

Repurposing Costs

Battery Costs

Generated using the NREL Battery Second-Use Repurposing Cost Calculator (https://www.nrel.gov/transportation/b2u-calculator.html), assumes 1 GWh/year volume, 60kWh pack.

Second-life could help to lower the costs of EVs

10https://blog.ucsusa.org/hanjiro-ambrose/the-second-life-of-used-ev-batteries

Second-life Batteries and Residual Value

11https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/second-life-ev-batteries-the-newest-value-pool-in-energy-storage

11

Second-life Market - Supply

The US added 522.7 megawatts/1,113 megawatt-hours of energy storage in 2019.

12

Second-life Market - Demand

Nobel Prize Winner Says Battery RecyclingKey to Meeting Electric Car Demand

• The 2019 Nobel Prize in Chemistry was awarded to John Goodenough, M. Stanley Whittingham, and Akira Yoshino “for the development of lithium-ion batteries.”

• “The point is whether EV batteries can be recycled,” said Akira Yoshino.

• The world’s transition to battery power… is set to boost demand for commodities from copper to nickel and cobalt. But there’s also concerns that miners won’t be able to expand raw material supply fast enough, and any shortfall will offer bigger opportunities for recycling.”

https://www.bloomberg.com/news/articles/2019-10-10/nobel-prize-winner-says-battery-recycling-key-to-secure-supply13

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0

20

40

60

80

100

2020 2025 2030 2035 2040

US

Ligh

t-du

ty E

V Fl

eet (

Mill

ion

Vehi

cles

)

BEV

PHEV

0

1000

2000

3000

Co Cu Li Mn Ni

2040

Bat

tery

Mat

eria

l Dem

and

(Tho

usan

d To

ns) Potential US Secondary Production

US Battery Materials

Global Battery Material Demand

• US could meet more than half of material demand for new batteries with recycled materials by 2040

Battery Recycling and Material Recovery

15

https://circuitdigest.com/tutorial/lead-acid-battery-working-construction-and-charging-discharging

https://en.wikipedia.org/wiki/Electric_vehicle_battery

Lead Battery Recycling: A Good Example?

16

Intro Technology Materials Recycling Reuse

Global value chains for e-waste

• Large scale retirements of EV batteries will begin to occur within the next 5 to 10 years (~3.5 to 30 GWh of battery retirements in US)

• Logistics, infrastructure, and knowledge sharing are key barriers for end-of-life (EOL) management

• Mineral resources unlikely to limit battery manufacturing over the medium term, but recycling is critical in the long term

• Low-value of recovered materials could be a barrier to capital/investment • Battery reuse is a promising strategy; could be useful for fleets given

potential for demand management; could compete with V2G/1G• Attention is gaining on the issue of battery recycling with coming policy

developments

Key Points

17

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Hanjiro Ambrose, PhD Hitz Family Climate FellowUnion of Concerned Scientistshambrose@ucdavis.edu