As we continue looking at the mooted electric vehicle (EV) battery project between Zambia and the Democratic Republic of Congo (DRC), today will focus on EV-related trending issues like who is currently powering world’s EVs.
In their recent presentations, Benchmark Mineral Intelligence experts Simon Moores and Mark Ferguson weighed in on how EV purchases are driving demand for battery metals like lithium and cobalt.
Demand for battery raw materials is outpacing supply by three to five times and is growing at a quicker rate as the world continues to push forward to reach net-zero goals.
By 2050, about 30 terawatt-hours of lithium-ion battery deployed capacity will be needed, according to Benchmark Mineral Intelligence.
This means demand for key battery metals such as lithium will continue to increase.
“All these gigafactories around the world are being built without even thinking about building the mine capacity alongside. That’s now coming back to bite the industry quite hard,” Mr Moores told the audience at the Vancouver Resource Investment Conference (VRIC), held in January.
Back in 2015, Benchmark Mineral Intelligence was tracking just three gigafactories — today that number has risen to 350, of which 145 are active.
“Lithium-ion batteries are getting better. They’re getting lower cost and they are abundant,” Mr Moores said, adding that lithium-ion batteries are the number one technology for the energy transition.
This is according to the Investment News Network, an online resource which provides independent news and education for investors in over 40 targeted categories.
Indeed if electric vehicles (EVs) are lithium-ion batteries, then lithium-ion batteries are minerals and metals.
The experts project that if the world is to meet increasing demand for battery metals by 2035 without recycling, it will need 59 new lithium mines, 62 new cobalt mines and 72 new nickel mines.
You now understand why the leaders of Zambia and DRC foresaw massive benefits from this and decided to forge a unifying stance in exploiting the opportunity.
Indeed if the world is to meet increasing demand for battery metals by 2035 Zambia and DRC should be part of the story, as I indicated last week.
The data from S&P Global Commodity Insights shows that passenger EV sales are forecast to grow at 23 per cent through to 2027, with lithium-iron-phosphate batteries expected to increase in market share.
Key metals such as nickel, lithium and cobalt are experiencing different trends in the short term, but will obviously see supply constraints in coming years.
Experts note that when it comes to nickel, volatility is dominating the sector — demand outpaced supply in 2021, leaving the market in a deficit that turned into a surplus in 2022 as Indonesia ramped up output and macroeconomic factors hit the space.
Again this is good for mineral-producing countries like Zambia and DRC!
Who is, however, currently powering the world’s EVs?
Your guess is as good as mine – China!
According to South China Morning Post, the most populous country in the world has six of the top 10 EV battery makers with 60 per cent market share.
Contemporary Amperex Technology (CATL), based in each China’s Fujian Province, installed 165.7 gigawatt hours of battery cells in the first 11 months of last year, giving it a global market share of 37.1 per cent.
As CATL retained its position as the world’s largest EV battery producer, according to Seoul-based SNE Research, Chinese electric vehicle (EV) battery makers dominated the global market in 2022, with the six companies featuring among the world’s top 10 players.
Then there is the issue of the lifespan for these batteries, generally.
Tesla reports its vehicles to have an average lifespan of around 200,000 miles in the United States and 150,000 miles in the European Union (EU).
This sounds like a bit more than the average life expectancy of a car, which is pegged at only 12 years.
Generally, according to current international industry expectations, EV batteries are projected to last between 100,000 and 200,000 miles, or about 15 to 20 years.
However, international media also indicate that even when EV batteries reach their lifespan their large initial capacity combined with minor losses in battery capacity means the aging is nearly imperceptible to drivers.
Next week we intend to look at the stage at which Zambia and DRC are in the electric vehicle battery value chain deal that the two countries cut last year.
Just to refresh your memories, in April last year, Zambia and the DRC signed a historical cooperation agreement to facilitate the development of the value chain in the electric battery.
In December the same year, on the sidelines of the US-Africa summit in Washington DC, they signed a Memorandum of Understanding for the same venture.
It will, therefore, worthwhile to get an update on that!
Remember, the United Nations Economic Commission for Africa and the Africa Import and Export Bank brought in their expertise in actualising the car battery project.
According to Commerce, Trade and Industry Minister Chipoka Mulenga the two multilateral institutions have been playing a key role in feasibility studies.
Two production plants will be set up in Zambia where car batteries will be produced under the deal.