In the coming years, millions of people will buy electric vehicles (EVs). These cars and trucks will only run on batteries containing metals like cobalt, lithium and nickel. A shortage of these metals, however, could derail the electric vehicle boom.
“Many people don’t realize that we just don’t have enough of these essential materials mined around the world,” says Megan O’Connor, chief executive and co-founder of battery mining and materials recycling company Nth Cycle.
The company has designed a way to extract nickel and other metals from old batteries so these materials can be used again.
The process is called electro-extraction and it works by using an electrical current to separate the metals from the crushed battery waste, known as “black mass”. The separated metals are isolated and trapped in a special filter.
Nth Cycle’s technology extracts nickel not only from old batteries, but also from clods of rock and metal excavated in mines.
It is potentially a more sustainable method of nickel recovery than traditional techniques such as pyrometallurgy, which O’Connor says is not an ecological process.
“Think of it as a big oven, they melt everything at very high temperatures — you can imagine the carbon footprint,” she explains.
Over the next few years, the industry will need all the nickel supplies it can get to produce many of the products we use on a daily basis.
Lithium-ion batteries, which power many devices including your cell phone, rely on a mixture of nickel, manganese and cobalt.
But in some batteries, nickel is by far the most important component, accounting for 80% of the mix.
The problem is that nickel supplies, like many other materials at the moment, are subject to long waits caused, in part, by the war in Ukraine, as Russia is one of the world’s biggest suppliers of nickel.
Countries such as Indonesia and the Philippines are likely to increase their nickel production as buyers look for sources of the metal outside Russia. There are, however, doubts about how sustainable this new production will be.
O’Connor argues that it will not be possible to open new mines quickly enough to meet the growing demand for nickel, which is also used to make stainless steel components and wind turbines. Instead, recycling old batteries will help “fix” that supply problem, she suggests.
Other companies are also taking this approach, such as Redwood Materials in the US, which buys batteries for 60,000 to 80,000 electric vehicles every year.
“On average, we recover 95% of battery elements such as nickel, cobalt, lithium and copper,” says the company’s vice president of communications and government relations, Alexis Georgeson.
But general confidence in the nickel market has not yet returned after a difficult episode in March, when the price of nickel on the LME (London Metal Exchange) soared by 250% before falling again. This led LME operators to suspend nickel trading for about a week.
“It was a disaster,” says Keith Wildie, business director at metal recycling company Romco Group, who reckons nickel prices remain volatile. Despite having fallen again, the figure is still about 60% higher than it was at the beginning of 2022.
The price shock came in part because a Chinese company, Tsingshan Holding Group, had built up a large “short position” in the market. In other words, hitting contracts that bet the nickel price would go down. When that didn’t happen, the company was forced to buy back those contracts or commit to supplying the nickel. Either option would result in a huge loss.
The company did not respond to a BBC request for comment.
The disruption and panic in the market subsequently knocked the confidence of nickel traders down, Wildie adds: “Volumes have absolutely gone down.”
Both the UK’s Financial Conduct Authority and the Bank of England announced revisions following the incident.
In a statement, the LME said: “The LME is committed to ensuring that the actions of all participants… will be fully reviewed and appropriate actions will be taken to restore confidence and support the long-term health and efficiency of the market. .”
However, there were concerns about future nickel supplies even before this episode.
Electric vehicle maker Tesla, for example, had already moved to ensure access to the metal, becoming a technical partner in a new nickel mine on the Pacific island of New Caledonia.
Not all companies can make this option. More than two-thirds of the world’s nickel production goes to the stainless steel industry, where it ends up in everything from cutlery to bathroom faucets and washing machines.
Some stainless steel factories in Europe have already cut production, thanks to high nickel prices and concerns about the metal’s supply. Although Lisa Reisman, founder and executive editor of the trade publication MetalMiner, predicts that short-term demand for the metal in some sectors could drop.
High interest rates could lead to a downturn in the housing market, which likely means fewer people will be able to buy new appliances made of stainless steel in the coming months, she explains.
For electric cars, they will almost certainly require a constant supply of nickel.
Earlier this year, market research firm S&P Global Platts predicted that worldwide light electric vehicle sales would reach 26.8 million by 2030. The company noted that electric vehicle sales more than doubled between 2020 and 2030. 2021.
Jason Sappor, a senior analyst at S&P Global Platts, says the high nickel price is unlikely to have a big impact on EV sales. But he says electric car batteries are becoming an increasingly important driver of the nickel market.
Could recycling old batteries help fill that gap, as O’Connor suggests? Perhaps, says Sappor — but it requires access to enough old batteries to make extracting the small amounts of nickel inside them worthwhile.
“The only problem with this is that you have to have existing stock to recycle,” he says. This approach makes sense, he adds, “in the long run.”
O’Connor emphasizes that recycling alone will not be enough to satisfy our nickel needs for the foreseeable future. “We need to start mining more of these materials – and mining them more sustainably.”
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