JAKARTA - General Motors recently announced a strategic partnership with California-based Controlled Thermal Resources (CRT) to secure "local, low-cost lithium." This material is used to make its Ultium battery pack. GM's Ultium is a battery modular system in which cells can be stacked vertically or horizontally, allowing an electric vehicle range of up to 400 miles.
This move demonstrates the growing importance of the mineral for automakers entering the electric vehicle market, and further highlights the security of the supply chains driving the energy transition, particularly EV components. The agreement with CTR will provide a local and safe supply of lithium for GM use at Ultium, which is slated for launch in 22 vehicle models by 2023.
Lithium was listed as an essential mineral by the US Department of the Interior (USDI) in 2018 along with 34 others deemed essential to the economic and national security of the United States. The list includes 17 rare earth elements (REEs) used in the production of semiconductors and batteries. The transition to renewable energy will require a consistent supply of this mineral.
However, the United States currently relies on foreign countries for its supply. Of the 35 minerals considered essential by the USDI, the US was 100% dependent on foreign sources for 13 in 2019. In 2018 the US obtained more than 98% of the REEs processed from China, a trend that continues through 2021.
China's capacity to produce refined and REE critical minerals stems from low labor costs and weak environmental regulations, with its central government prioritizing international dependence on its supply.
Recognizing that dependence on Chinese supplies could prove devastating in the future, especially given their increasingly troubled relationship, the US began exploring diversifying its supply chain of essential minerals during the Trump administration.
The Biden administration expanded on the actions taken by President Trump by pledging funding for a REE split facility and ordering a 100-day supply chain review. The results of the review resulted in the creation of a Supply Chain Disruption Task Force and recommendations to the Department of Defense, Congress, and private companies to develop mineral extraction sites in the continental United States.
In the case of lithium, strategic minerals are usually extracted from brine pools and evaporation ponds in an expensive and often carbon-intensive process. The CRT uses a new and sustainable “closed loop” process that reduces costs and emissions by using geothermal energy in situ.
The majority of battery grade lithium hydroxide and carbonate for GM will come from CTR's Hell's Kitchen Lithium and Power development at Salton Sea Geothermal Field in Imperial, California. The Salton Sea Reserve is home to lithium brine storage which has the potential to supply 40% of global demand.
Despite recent investments, including the recently announced GM project, the United States is years away from ensuring a stable domestic supply of minerals and REEs. Securing domestic production to rival China's will require deregulation, policy and resource commitments, and investment in mineral extraction facilities.
The transition to green energy sources and transportation requires US policymakers to consider expanding mineral sites in North America and the Western Hemisphere.
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