Shining a Light on the EV Supply Chain: A Poor Environmental and Human Rights Record
For years, the public has been going around buying electric vehicles, claiming that they are promoting “clean energy” and contributing to less global warming, feeling very smug about themselves. However, the general public typically doesn’t understand how supply chains work, and many don’t even know how their box of cereal ends up on their grocery store shelf. During COVID, the term “supply chain” suddenly became a focus of attention by the media – and the massive wave of shortages was blamed on the supply chain problems in the world.
Given the plethora of news that’s coming out regarding the critical materials used to produce electric vehicles, I thought I’d write this blog to shed a light on the supply chain for electric batteries – the guts of an electric vehicle. S&P Global Mobility forecasts electric vehicle sales in the United States could reach 40 percent of total passenger car sales by 2030, and more optimistic projections foresee electric vehicle sales surpassing 50 percent by 2030. As of October 2022, there were 1.7 million EV’s on the road, or less than 1 percent of the total number of vehicles on the road. So we are going to grow the number of vehicles by 40X or 50X? Really? Let’s think about what has to happen for these projections to occur.
Every electric vehicle has an electric battery. In a recent blog, I documented the challenges that exist in producing the seven “green metals”, that are critical in the production of electric batteries. The growth in electric batteries will require massive levels of demand for the metals required for green energy, such as cobalt, lithium, silver, copper and nickel, that are vital for the technologies to build electric cars and renewables. The IEA predicts about a seven fold increase of such “green metals” by 2030. But where are the deposits of these “green metals”? And how will we mine them? Let’s take a look at each of them one by one.
Cobalt: The Democratic Republic of Congo has 46% of global cobalt reserves and produces 70% of the world’s output. Congo is an autocracy, which means that the government controls most of the industry. The book Cobalt Red, provides some horrifying insights into the cruelty of the open pit mining conditions, and how young children are maimed for life in highly dangerous working conditions. The author, Siddharth Kara, spent time in the mines (cameras were forbidden by the armed guards), and documents the frenzied scramble for cobalt and the exploitation of the poorest people in the Democratic Republic of the Congo. The book is described as “a riveting, eye-opening, terribly important book that sheds light on a vast ongoing catastrophe. Everyone who uses a smartphone, an electric vehicle, or anything else powered by rechargeable batteries needs to read what Kara has uncovered.” Read this book and you will have second thoughts about electric batteries…
Nickel: A story in the Washington Post today documents the environmental hazards of nickel mining, the bulk of which is in Indonesia. Indonesia far and away has the biggest deposits of nickel, with Phillipines, Russia, and Australia a distant second. The government there is employing acid-leaching technology to convert low-grade laterite nickel ore — which the country has in abundance — into a higher-grade material suitable for batteries. Foreign investors and lenders cite the project as evidence of their commitment to fighting climate change (see picture of a nickel processing facility above). But the reality of acid leaching technology is that it is an environmental disaster. (Major mining corporations have given up on efforts to use this technology in the past.) The bulk of Indonesian nickel is lower-grade limonite ore, which consists of less than 1.5 percent nickel, making processing by traditional means nearly impossible. The leaching process is also energy-intensive, and generating that energy produces about 20 tons of carbon dioxide per ton of nickel, or about double the amount of the prevailing processing method, according to the IEA. The process produces enormous amount of corrosive chemical tailings — often in the millions of tons for each mine per year — that are extremely challenging to neutralize, store and contain. Even after the slurry is treated, studies show, this waste can contain harmful heavy metals, such as certain types of chromium, linked to respiratory illnesses and an increased risk of cancer. Engineers have suggested three disposal options: putting the waste into a ditch behind a dam; drying out the waste and stacking it on vacant lots; and pumping it into the ocean. Each approach can go wrong. So nickel is another critical metal that has no good options. To make it worse, the government has approved the construction of coal-fired power plants specifically to support the processing of nickel for the EV industry.
Lithium: Perhaps no other green metal has seen such a surge in demand as lithium, and has led to a massive merger between two of the largest producers Livent and Allkem. The merger would bring together lithium mines and deposits in Canada, Australia and South America with a network of chemical-processing plants, including in the U.S. and China, where some of the world’s biggest manufacturers of electric vehicles are located. The global market for lithium grew to $48 billion last year, from $1.6 billion in 2015. The process of extracting lithium consumes significant amounts of water and energy, and lithium mining can pollute the air and water with chemicals and heavy metals. In addition, mining lithium can disrupt wildlife habitats and cause soil erosion, leading to long-term ecological damage. But there are social implications as well. In some cases, mining can displace local communities or harm their health and well-being. Many of the world’s lithium reserves are in developing countries, where labor standards and environmental regulations are often weak. This can lead to human rights violations, including forced labor, child labor, and environmental destruction.
Silver Most of the world’s silver is in South and Central America, with Peru and Mexico two of the biggest providers.Metals such as Silver & Gold are often extracted from areas surrounding streams, rivers & lakes. If super-sonic care is not taken with both the disposal of extracted rock and the processing of rock to extract the Silver or Gold, these waterways are very easily contaminated. Not only that, but mines in developing countries that don’t have the money to invest in proper processing equipment, use hugely toxic chemicals to speed up their process to refine metals directly from, and back into, their local waterways.
Copper. A peer-reviewed study of the track record of water quality impacts from copper sulfide mines found severe impacts to drinking water aquifers, contamination of farmland, contamination and loss of fish and wildlife and their habitat, and risks to public health. In some cases, water quality impacts were so severe that acid mine drainage at the mine site will generate water pollution in perpetuity. At 13 of the 14 mines (92%), water collection and treatment systems have failed to control contaminated mine seepage, resulting in significant water quality impacts. The development of acid mine drainage was associated with the most severe and lasting impacts. For example, the Tyrone and Chino mines – the two largest copper mines in New Mexico, will generate an estimated 2 billion gallons of acid and metals contaminated seepage every year, requiring water treatment in perpetuity. In perpetuity means forever… irreversible damage.
The IEA estimates that major mines that came online in the past decade took 16 years to build. And the industry will need to spend at least $2trn on green-metal exploration by 2040, according the Wood MacKenzie. Copper and nickel would require $250-300bn in capex before 2030. And guess who is doing the majority of this investment right now? You guessed it – China – which has nabbed the biggest commercial deposits of cobalt in the Congo.
Charging Stations: Let’s not forget, that EV’s need to be charged. Looking forward to 2030, with the assumption of 28.3 million units EVs on US roads, an estimated total of 2.13 million Level 2 and 172,000 Level 3 public chargers will be required – all in addition to the units that consumers put in their own garages. And then there is the electricity that flows into the charging stations themselves. A recent study by the Wall Street Journal showed that in some parts of the world such as China, the electricity used to charge the batteries of the country’s growing number of EVs comes largely from CO2-heavy coal, which completely eliminates any benefits of using an EV in the first place! But we’re guilty as well. China’s electric power production runs largely on coal and oil, and pumped 530 grams of CO2 per kilowatt-hour in the atmosphere; That compares with the 368 grams of CO2/KWH of electricity produced in 2022 by the US. That is far less than other countries like Germany or Japan, which rely on Russian natural gas for electricity. So driving an EV in Germany is even less climate friendly than in the US or France.
Recognizing these supply chain environmental impacts are often not discussed by the public, nor are they recognized by the media. It might be worthwhile to conduct a life cycle analysis and scope 3 emissions analysis of the EV supply chain vs. the combustion engine supply chain. I would love to see that study done..