After bronze, iron, coal and oil, we are now entering the age of lithium

Regardless of how the summer unfolds, it is already memorable. Skyrocketing energy prices and extreme heat are confronting Europeans with choices that previously seemed postponed. Former British journalist Henry Sanderson expects that we will look back on the summer of 2022 as a turning point in thinking about the energy transition.

“It doesn’t get more concrete than when you have to hide with two small children in the coolest room of the house,” he says in a video call about his own experience of the heat wave earlier this month in London, where it was the first since the beginning of the year. Temperatures reached 40 degrees and forest fires threatened the outskirts of the city.

“Climate science has been predicting these extremes for years, but that they are actually here now is extremely confronting. At the same time, Europe is becoming aware of its dependence on Russian fossil fuels. It is suddenly finding out how disastrous it is to be too dependent by one large supplier.”

Gas from Russia is not even the only problem. For the energy transition to succeed, Europe is also – and more fundamentally – dependent on another party: China. That’s what Sanderson’s book is about Volt Rush. The winners and losers in the race to go green, which was released as an e-book on Thursday and will be available in bookstores from September. He wrote it as a journalist for the British daily newspaper Financial Timeswhere until the end of last year he worked as a specialist in China and raw materials.

In the book, Sanderson explores nothing less than the beginning of a new era. Because, he argues, just as there was a period when the use of bronze advanced man, and later iron, coal and petroleum, so the future will be determined by lithium: the lightest of all metals and the main component of the battery. many electric cars. And of a large number of other metals that are essential for the production of batteries, wind turbines, solar panels and the power grid: nickel, copper, cobalt, the so-called rare earth metals and more.

The electric car lost to fuel cars more than a century ago. Thomas Edison was already designing electric models around 1900, but could not compete with the rapid development of Ford’s gasoline car, the Ford Model T. According to the climate agreement, only electric cars may be sold in the Netherlands from 2030. If it is up to the European Commission, this applies to the entire EU from 2035. This summer’s crises contribute to the realization that it is really necessary, Sanderson believes.

However, this creates new dilemmas. Due to major interventions such as the EU’s, the growth of the world population and the increase in prosperity, the demand for the so-called ‘critical raw materials’ will explode. For example, Sanderson claims that humanity will use more copper in the next 25 years than in the last 5,000.

It has major consequences for the environment, local communities, companies and the balance of power in the world. The extraction of these metals is polluting, rich Western countries have phased out their own mining for a reason. In countries where many metals are mined – such as Congo, Bolivia and Indonesia – the protection of miners, local residents and the environment is often poorly organised. Those who want to buy there also often come across China, which years ago recognized the importance of these metals and has since taken over large parts of the production chains.

All this is no reason to panic, believes Sanderson, and certainly no reason to abandon the electric car. “We can make the raw material chain greener by, among other things, ensuring that mining takes place with renewable energy and that waste no longer ends up in the environment. And Europe is starting to catch up to become less dependent on China. There is much to draw hope from.”

No matter how calmly and matter-of-factly he speaks, words like ‘enormous’ and ‘fascinating’ are often used during the conversation. In fact, he finds the matter so interesting that he made a career change at the end of last year and now works for a research firm specializing in the commodity chain of lithium-ion batteries.

Why did you choose this topic among all that can be written about China?

“The air I breathed when I lived in Beijing in 2014 was so dirty it felt apocalyptic. The Chinese Communist Party ran the risk of serious discontent among the population with this pollution. Doubts arose about the very high growth economic model through industrial production. That air pollution was one of the main reasons why China invested heavily in green energy and electric cars. It was the next big thing. Not that China has abandoned the old growth model now. That is part of the current problem. But you have to hand it to them: They’ve made big investments to lead the way in clean energy.

“The resulting geopolitical situation is fascinating. The relationship between China and the West is worsening like never before, while we cannot make the clean energy transition without China.

“For example, look at Ford’s announcement last week. It wants to buy nickel on a large scale in Indonesia. But to do that, Ford had to sign an agreement with the Chinese company Huayou, which is building a nickel processing plant there and controls it. It shows that decoupling from China is currently impossible, the West is too far behind for that.

“Europe is now trying to become more independent, but it is not easy. The most important thing is that we have to make the raw material chain greener, and we need attention to that. Until recently, we often outsourced industrial production to other countries and were not aware of the production methods there. But if the end product is to be greener, and that is the electric car, then the raw material chain must also be clean.”

What does it take for that awareness? People who drive electric often think they’re doing really well.

“I have no doubt that electric cars are a better choice for the climate than petrol or diesel cars. But to have any effect on CO2emissions, we need to change on a massive scale. And thus we also increase the problems in the raw material chain. So yes, you have reason to feel good about your electric car. But in the West we have forgotten that it requires minerals and real factories and well-trained engineers.

“My book was born partly out of frustration with my work on FT. Mining stories get little attention compared to topics like cryptocurrencies. Our economies sometimes seem to revolve around services and digital things like apps. Commodities are not sexy. But what interests me is the culture clash between the world of Tesla and the world of mining. The entire green business and the dirty industry, which together must make things cleaner.”

How much of China’s lead is due to strategy and how much is due to the mistakes of the West?

“Most of it is strategy, but not only from the government. Much is due to the entrepreneurship of Chinese private companies. It is true that they have often been aided and always maintained connections with Communist Party subsidies, but they have been quick and agile in investing and raising capital.

“Their success is partly the result of Western indifference. Ten years ago, for example, a Chinese company was able to buy Australia’s largest lithium mine, the lithium mine with the lowest production costs in the world. Australian politicians allowed that. Nobody was paying attention then.”

How can this backlog be caught up?

“It is not rocket science. There are still plenty of resources that have yet to be mined. It is a question of investing, of training engineers and workers. The Swedish battery manufacturer Northvolt is a good example. They have succeeded in raising billions in capital from, among others, Volkswagen. Their production process runs exclusively on renewable energy and they strive to ensure that all raw materials used are free from human rights violations. We will have to wait and see how successful they will be, but their performance is already impressive. We just don’t have time to wait for these ‘own’ companies. So we are still dependent on China.”

Is China also striving to be dominant in the electric car industry?

“I think China wants to supply the whole world with its own electric cars. We are now seeing the beginning of that. For example, BYD [dat net Tesla heeft ingehaald als grootste verkoper van elektrische auto’s ter wereld, red.] will enter the Japanese market this month. Cars from the Chinese brands Nio and Xpeng are widely available in Norway [deze merken hebben ook plannen voor Nederland, red.] The most important question: will Western consumers accept these cars? I think so because they are cheaper. With such a large part of the raw material chain in your hands, you have a big head start.”

In that case, China will gain additional geopolitical leverage: it can stop supplying if it sees reason to.

“China always keeps all options open, and of course the Communist Party can instruct the companies not to deliver. Let’s not be naive about it. But if China does it once, buyers will quickly look for other suppliers. It would only accelerate the estrangement between Western and Chinese companies, and is fundamentally against Chinese interests. They want to participate in the European and American markets.”

Part of the resource problem can be solved by choosing smaller cars, you say. But is it realistic? You see bigger and bigger on the street.

“It is true that figures from the International Energy Agency show that most electric models on the market are SUVs. I think that is enormously harmful. Both in terms of energy consumption and the raw materials needed for the large batteries. I’m starting to have reservations about the idea of ​​cars having an ever-increasing range.

“We’re always hoping for a big technological breakthrough that will enable electric cars to go further than about three hundred kilometers from now, but that may no longer be necessary. The charging infrastructure is getting better and better.

“In the United States, this is a difficult point. There the cars are gigantic, it’s the same range anxiety: drivers who fear the battery will die before reaching their destination. But in China, Wuling Mini [een piepklein autootje vanaf omgerekend vijfduizend euro, red.] already one of the best-selling electric cars. And I think Europeans can also be perfectly happy with smaller cars. Fear still stands in the way. Many people think that driving a smaller car is a sacrifice. But loading is getting faster and faster, so that sacrifice is getting smaller and smaller. I actually think we are well on the right track.”

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