No sovereign nation has ever been able to lay claim to more than 20% of global oil reserves, the backbone of 20th century energy and the underlying cause of immeasurable bloodshed. If current trends are to be heeded and the harnessing of renewables is to power this century, batteries are destined to be the bottleneck that generates the most buzz. Unsurmountable chemical limitations dictate that the Lithium-Ion variety is the peak of our technological aspirations, of which key ingredients are cobalt and, naturally, lithium. Almost half of terrestrial cobalt reserves are to be found in the Democratic Republic of Congo alone, and half of the world’s lithium lies in Chile. Is this astonishingly high concentration of resources a recipe for fruitful international cooperation, or one for disaster?
A Thing of the Past
In 2020, in defiance of an immobile transport sector, the price of Tesla stock skyrocketed 695%; making it the world’s most valuable car company: worth more than Toyota, Volkswagen and Ford combined. Boom or bubble, in the process the seemingly blessed electric vehicle manufacturer’s CEO Elon Musk became the richest man to walk the Earth (and potentially Mars). Within a matter of weeks, GM announced it would phase out gas-guzzlers by 2035.
Despite the myriad valid reasons one may wish “Death to 2020”, it can at least be credited for having provided a pause in which to reconsider the hegemony of oil, as tumbling demand sent the price of the liquid gold of old plummeting to effluent levels (even briefly flirting with negativity). Last year, Europeans drew more energy from renewable sources than from fossil fuels for the first time in history. Gone are the days when Exxon Mobil, Shell, BP and Chevron dominated market indices, having long-since been dethroned by (ostensibly) carbon-neutral big-tech giants. Even oil-worshipping Saudi Arabia, with its Vision 2030 initiative, has committed to diversifying away the country’s dependency on crude revenues. The pandemic was oil’s death knell: it won’t be obsolete by tomorrow, but it is undeniably on the way out.
Climate activists raising awareness may well periodically catch the attention of the public, but their demands are usually appeased with gestures more symbolic than impactful from governmental heads. This isn’t to say regulations and incentive schemes are completely ineffective, only that sufficient large-scale action has long failed to materialize. The masses can only submit pleas whilst the private sector issues ultimatums. Only now that the green of corporate dollar bills is betting on green, as an energy transition develops an aura of profitability, does real change look likely.
As the fundraiser guest-lists adjust to the shifts in market power, politicians straggling behind on environmental issues will no doubt change their tune. As a bonus, a lessening of the importance of oil means the West has no pressing need for contrived involvement in the Middle East, whereby even the most mediocre spin-doctor could portray a withdrawal as magnanimous humanitarianism (Biden is teed-up on the green in this respect). If we then consider the adoption of a more sustainable path a fait accompli, backed by a rare alignment of the people, corporations and politicians, what does the future hold?
The Ones to Watch
In some respects, the old ways are best. To match demand, the burning of coal can be slowed, nuclear power plants dialled down and hydroelectric dams can easily tame output with overflows. Due to the intractable nature of their sources, no such functionality exists with solar or wind power. Considered alongside the requirement of the transport sector for portable and rapidly rechargeable means of storing electrical energy, the battery appears to be the key.
The boundaries of the periodic table impose that science is unlikely to go beyond improved generations of the Lithium-Ion Battery (LIB) we are familiar with today. According to a 2017 EU report, the global lithium battery market is projected to grow from $30 billion in 2017 to over $100 billion by 2025. For the foreseeable future, the most coveted commodities for battery producers are deemed to be cobalt, lithium, natural graphite and nickel.
A semantic sidebar may be useful to distinguish between “resources”, “reserves” and “production”: resources describe the total geologically estimated or known quantity of a mineral, reserves the portion of resources that it is economically viable to extract, and production the actual mined output within a given period. Discoveries of new deposits expand resources, technological improvements or increases in the retail price of the raw material bolster reserves. As the UN Charter places mining rights under the sole jurisdiction of the country in which they occur, the international distribution is of primary concern.
Think cobalt, think Democratic Republic of Congo, whose reserves range from just under half to up to two-thirds of global reserves depending on the source. Although not especially scarce, as the 32nd most abundant metal with total reserves estimated at 7 million metric tons, in 2019 the DRC sat atop approximately 3.6 million of these, three times the amount of Australia in second place. The battery market has been steadily swallowing up end uses of cobalt: from 25% in 2005 to 44% in 2015. By 2025, global demand is slated to reach 117 000 tons for batteries alone, a threefold increase of 2018 production levels. In response, prices quadrupled in the two years up to 2018, reaching €80 per kilogram. Due to the significant threat to the supply chain posed by incessant political instability in the DRC, coupled with the fact that an estimated 70% of the DRC’s mining activities are financed by Chinese investors, the EU classifies cobalt as a Critical Raw Material (CRM) for battery production: combining high economic value and high risk.
The eponymous ingredient of the Lithium-Ion Battery is only slightly less contentious. In this case, it is Chile that lays claim to almost half of global reserves, estimated at 9.2 million metric tons in 2020, with Australia again occupying a distant second place. Propelled by the growth of the electric vehicle market, by 2025 demand for lithium is expected to equal 3.5 times 2018 levels of production, of which 75% is destined for battery production. The lithium supply chain already struggles to meet demand, and the processing capacity of battery-qualified grade materials (lithium hydroxide monohydrate and lithium carbonate) will remain a snag for years to come.
Natural graphite (essentially pencil lead) has also been designated a CRM by the EU. In 2019, although Turkey led the world in terms of reserves, it is China that commanded production, contributing 69% of the global supply. In 2018, the value of the graphite market was $17.6 billion U.S. dollars, and is projected to surpass $27 billion by 2025.
For their part, nickel reserves are relatively evenly distributed and not cause for major concern, with Indonesia, Australia and Brazil enjoying the lion’s share.
Conflict or Cooperation?
Borrowing that beloved question of political scientists: will this situation drive diverse nations to collaborate and thrive as links in a supply chain that spans the globe, or will a battery market under pressure violently explode as that of a Samsung Galaxy Note 7?
For all the death, destruction and geopolitical disruption it fuelled, oil as a resource was relatively well-spread over a variety of countries and regions, and was crucially a uniform and substitutable product, allowing the output of Venezuela to compete with or indeed substitute that of Kuwait. These conditions are reversed in battery production: select countries have quasi-monopolies on select non-substitutable elements.
Because these are primary resources that require considerable technological prowess and reliable imports to be transformed into the final valuable product, the abundant countries themselves have little chance of significant enrichment (unlike the Gulf states had with oil). This may well not apply to the likes of developed economies such as Chile or Australia, already well integrated into global markets, who seem destined to benefit greatly from the rocks beneath their feet. In developing countries the story is very different, wherein the sturdiness of local government plays a large hand in the outcome: either it is weak and vulnerable to the ultimately destructive exploitation from foreign powers of the kind that ravaged the African continent in centuries past, or it can resist external forces and credibly establish sovereignty over its supply, whereby the choice emerges of joining the international market or maintaining a chokehold in the pursuit of monopoly profits.
However, the disparity in wealth and military muscle between, for example, the U.S. and the DRC, invites the possibility of trade being imposed “the hard way”, the former seizing upon the first available opportunity to sow more “seeds of democracy” that have been lying ominously on the shelf for the past decade (presumably in the Department of Agriculture). Given harrowing reports on the extent of human rights abuses in the DRC alone, there may even be a morally defensible case for UN-led intervention. One could nonetheless expect the U.S. to be reluctant to launch another full-scale invasion given the (non-nuclear) fallout from their previous excursion, and China has historically shunned such primitive methods altogether.
With that in mind, the most likely contingency is some form of diplomacy prevailing, whether it be a “multilateral economic partnership” or “development aid with strings attached”, mineral-rich developing countries are bound to be wooed by the superpowers. Therein the conflict becomes less overtly violent as it becomes more covertly portentous (or “colder” to reprise the old analogy), as a contest for influence plays out between, most likely this time, the U.S. and China. In this scenario China would have a significant head start, having become Africa’s biggest trading partner back in 2019, with an annual tally of more than $200 billion. Alongside the fortunes of cash splashed on infrastructure as part of their Belt and Road Initiative, in 2018 the Chinese government also announced a $60 billion African aid package. Not insignificantly, all this comes without the uncomfortable baggage of imperialistic American interventionism from decades past.
Furthermore, the People’s Republic’s rise, even as it slows, has fortuitously coincided with the energy transition, in much the same position the U.S. found itself in with oil over a hundred years ago. China currently enjoys a predominant position in the LIB supply chain as it is able to undercut the West on production costs and inefficiencies caused by pesky environmental regulations. The country tops global output of natural graphite, silicone metal and hosts an ever-increasing majority of the world’s cobalt and lithium refining facilities.
The Western response is currently lagging far behind, as U.S. battery production is mainly undertaken by foreign firms such as Panasonic (the Japanese company supplying Tesla’s batteries) and LG. The threat of Chinese dominance in yet another field has been officially acknowledged by the EU, as the institution launched the European Battery Alliance in 2017, although their approach reads far less aggressively: ‘It could be useful to use all appropriate policy instruments such as diplomacy and trade to ensure sustainable and fair access to raw materials for batteries in third countries and promote socially responsible mining.’ Although the EU has decisively invested in production capacity, for instance via the Swedish firm Northvolt, and in the recycling of battery materials, the majority of the four essential raw elements identified remain sourced from third parties. By many metrics, China has already won.
A Point of Ethics
The extraction of raw materials from the subsoils of developing countries also raises a number of moral quandaries. On the one hand, there is the long creeping shadow of historical exploitation by the Western powers of old, able to unilaterally impose unfair trading terms that see only an infinitesimal portion of final value remaining in the country.
On the other, the environmental impact of poorly regulated extractive processes has been known to ravage surrounding areas, occasionally with consequences reaching far beyond. Mining activities have with increasing frequency toxified water sources in Zambia, South Africa and Namibia, with disastrous consequences to local agriculture and human health. It seems hypocritical to say the least, that through the front door the West admonishes the developing world for falling to clear the ever-rising bar of environmental standards, whilst simultaneously, via the back door, exporting the pollution necessary to keep domestic hands green (our consciences can only be as clean as their rivers).
Arguably the guiltiest of culprits (or victims, depending on your viewpoint) happens to also be the cobalt-king itself, the Democratic Republic of Congo. The war-torn African nation sits atop roughly 60% of the world’s on-land copper, half of its cobalt reserves, as well as a sizeable troves of lithium, zinc and manganese. The fruits of this land of plenty are apparently important enough to overshadow multiple reports of extensive child labour in the country, abuses more graphically and accurately described as modern slavery. Once again hypocrisy rears its ugly head if one considers to what degree sweatshops in southeast Asia attract more admonishment simply because their product isn’t crucial to a greener and more technologically advanced future.
Without comparably cost-effective alternatives, money from China and the West has a habit of finding its way into the pockets of reprehensible authoritarian regimes with a slew of Human Rights violations to their name. The benefits of these financial inflows are rarely perceived by the wider population, and merely serve to perpetuate the lucrative system of abuse. Scrambling for a silver lining leads to potential peace in a Middle East devoid of foreign meddling, but as oil profits dry-up the region may well be plunged into further factional disarray.
An oft floated solution, navigating around these geopolitical and moral quagmires altogether, is to instead simply mine the seabed. By all accounts, the floors of the Pacific and Indian Oceans are mineral-rich in quantities beyond any land miner’s wildest dreams, thanks to plentiful deposits of polymetallic nodules (rock clumps packed with various ores). Extraction has thus far remained prohibitively expensive, but once again the confluence of technological advances and accelerating demand is turning the tide. However, as has already proven the case, disputes over rights to subsea reserves aren’t painlessly resolved by the UN Laws of the Sea. Despite being far greener than terrestrial mining operations, what this would do to marine life and already suffering underwater ecosystems is certain to give conservationists some pause (we are no doubt approaching the point beyond which Sir David Attenborough cannot take it).
It is often said we know more about the surface of the Moon than the bottom of our oceans, but both will no doubt be arenas for resource conflict in the future. For a handful of years now, the concept of Space mining has been creeping from the realm of sci-fi into that of reality, as the commercialisation of launch capabilities has teased feasibility and enabled more ambitious private sector projects to take-off. Japanese company ispace, whose mission is to harvest lunar resources to enhance our lives back on Earth (and presumably get themselves wonderfully rich in the process) has already booked upcoming SpaceX flights to test its exploration kit on the surface of the Moon (incidentally, Musk himself has publicly remarked that the only thing that cannot be made electric is a rocket, due to Newton’s third law in the vacuum of space). However, amendments to the UN Outer Space Treaty and Moon Treaty, that stipulate celestial bodies ‘should be used exclusively for peaceful purposes’, and that ‘their environments should not be disrupted’, will need to be passed before a single rock is lawfully overturned. Regardless, it seems naïve to assume the former U.S. president created and committed to funding a Space Force without such ambitions in mind.
Another hotbed of international attention for its supposed mineral affluence is Antarctica, whose exploitation has thus far also been curbed by charter. Assuming international pressure doesn’t void it prematurely, the Antarctic Treaty’s article banning mining activities won’t be up for review until 2048. Until then, the frozen continent is to remain a haven for peaceful scientific cooperation.
Green is the new black and the battery is golden. Its component materials are acutely concentrated in various friendly and unfriendly, developed and developing, countries around the world. Those whose mineral reserves are unique and government weak are likely to be thrust into the international spotlight. China is well ahead in a race that has only just begun, and the West is alongside the rest in the catch-up. Beneath the politics and the economic incentives, ethical concerns are manifold as a new scramble for Africa gets underway. If the combination of overcoming all of these hurdles seems too far-fetched, and creating a cooperative, regulated and globalised supply chain too optimistic, there is always hope the marvels of science will push the boundaries of accessible resources to the depths of the oceans or the far side of the Moon. As the cornerstone of the energy transition, the battery seems primed to pick up where oil is leaving off. All that remains to be seen is whether our competency in handling the situation has evolved in tandem with our technology.