President Joe Biden’s recently passed Inflation Reduction Act is positioned to help the country reach its goal of reducing greenhouse gas output by 40% of 2005 levels. But according to mining industry experts, a shortage of lithium will make it hard for the country to meet specific requirements set forth by the new law.
Keith Phillips, CEO of Piedmont Lithium (PLL), gave an interview with Yahoo Finance, during which he said, “There’s going to be a real crunch to get the material. We don’t have enough in the world to turn that much [lithium] production in the world by 2035.”
Under the Inflation Reduction Act, the Biden administration hopes to reduce the percentage of new gas-powered vehicle purchases by 50% by the year 2030. Phillips said, “we’ll [eventually] have enough, but not by that time.”
Lithium is one of the critical minerals in electric car batteries, with each requiring roughly 8-10kg. The growing demand for the metal has caused the price to nearly double this year, and demand is expected to grow by 40 times in the next two decades.
Tax credits offered to EV manufacturers outlined in the new law require parts and components to be primarily sourced from North America. Piedmont Lithium is planning to open a lithium processing plant in Tennessee, and another in North Carolina, to cash in on the incentives.
Other automakers are seeking to secure partnerships with domestic mining operations so they can also cash in. Currently, the Albemarle Silver Peak mine in Nevada is the only operational lithium mine with substantial output.
China currently dominates the lithium refining industry, handling more than half of all supply. The United States hopes to sway that percentage. However, US mining projects face a lengthy permitting process that can take between 5-10 years before companies can start production.
The IRA includes tax credits for domestic production, and the Defense Production Act has been applied to the production of critical minerals like lithium and cobalt to speed up permitting. However, Phillips said that, as it stands, the US cannot meet its clean energy targets with domestic sourcing priority.
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