The Trudeau government has invested $50 million into a highly automated battery-pack assembly plant in Saint–Jérôme, in the Laurentians. This comes alongside another $50 million that will be interjected by the Premier of Quebec, François Legault. While many are likely to applaud the decision to give money towards the development of a battery-pack assembly plant within Canada – Diverge Media has a different take.
The issue with EV’s – their batteries
According to the “United States International Trade Commission Journal of International Commerce and Economics” (December 2018), “based on recent estimates, more than one-half of the cost of a finished lithium-ion battery pack is the cost of these materials” (aluminum, cobalt, graphite, manganese, and nickel). It continues “among the common materials, lithium, graphite, and cobalt face supply constraints.” To summarize, these minerals are essential in the production of the Lithium-ion batteries used in EVs today and they’re facing supply constraints already – what does this mean?
More demand – expect a skyrocket in the price of these minerals
According to the report, on average, Cobalt made up about 30 percent of a lithium-ion battery cathode in 2017 – although experts expect the cobalt content of batteries to decline as they become more dense.
Some predict a massive supply and demand gap by 2025
The report tells us that “due to cobalt’s relative scarcity, some predict a 20-percent gap between supply and demand in 2025.” This will likely cause the price of the market’s available cobalt to increase substantially. Indeed, the report makes note that “Cobalt prices increased by 120 percent in 2017” alone.
Expect the price of manufacturing EVs to rise – not fall
Benchmark Mineral Intelligence says that they expect that “the market for graphite in battery anodes will increase from 80,000 metric tons in 2015 to 250,000 metric tons in 2020, thereby driving up the price” of the mineral crucial to EV battery production.
Another mineral likely to continue increasing in cost as the demand for EV’s ramp-up is Lithium itself. The report also points out that “some have predicted a shortfall of 100,000 metric tons for lithium by 2025.” The report then informs the reader that “this scarcity could drive up the lithium’s price and thus the price of battery packs.” The report also details the trend of rising prices noting that ” from January 2016 to January 2018, the price of lithium carbonate in South America (one of the major sources) more than doubled.”
The question that needs to be asked of the political classes pushing these technologies – is how will the average person afford it? Are mass public transportation programs the plan for the general masses? Essentially, the literature reads that the more demand there is for this type of green tech (lithium-ion batteries for EV’s) – the more we will see the cost of the minerals used in their production increase. This is essentially supply and demand 101.
The human cost of “going green”
There is likely to be a human cost to Prime Minister Trudeau’s commitment to “go green” by investing in EV battery production. This is because countries that mine these minerals ethically (by Canadian standards) don’t make up the majority of the market’s mineral production. Cobalt production predominantly takes place in The Democratic Republic of The Congo – although this doesn’t give us the full picture. According to a report from Mining.com, “The Democratic Republic of Congo (DRC) is the source of over two-thirds of global cobalt production,” the report said, but “China has over 80 percent control of the cobalt refining industry.”
It is concerning thought to think that the DRC is the global leader in Cobalt production and that child labour was a visible element in the Cobalt mining industry there. Amnesty International reported in 2016 that “artisanal miners include children as young as seven who scavenge for rocks containing cobalt in the discarded by-products of industrial mines, and who wash and sort the ore before it is sold.”
They continued their report:
“Amnesty International and Afrewatch conducted research in artisanal mining areas in southern DRC in April and May 2015, visiting five mine sites. They interviewed nearly 90 people who work, or who have worked, in the mines, including 17 children.”
So essentially, more EV production will likely mean more child labour across the globe – splendid Mr. Trudeau. Not only are there children mining the Cobalt – they could develop what is known as “Hard Metal Lung Disease” as a result of mining the mineral used in EV batteries.
As CBS News reported on March 6th, 2018 “According to the CDC, “chronic exposure to cobalt-containing hard metal (dust or fume) can result in a serious lung disease called ‘hard metal lung disease'” – a kind of pneumoconiosis, meaning a lung disease caused by inhaling dust particles. Inhalation of cobalt particles can cause respiratory sensitization, asthma, decreased pulmonary function and shortness of breath, the CDC says.”
China benefits from a “green revolution” – a lot
With the demand for society to turn towards “green” vehicles – there has been a massive motivation to shift resources towards EV production from the political classes. This may seem fine to you in theory – but there is a major concern that accompanies a global shift towards a “green revolution”. That concern, outside of the child labour is that China has control of almost all the rare earth required to manufacture the lithium-ion batteries contained in EV’s.
Here’s the breakdown – “China produced 64 percent of the world’s graphite in 2019 but only had 24 percent of the world’s reserves. We see the same trend with Cobalt where China only has 1 percent of the world’s cobalt reserves but it controls 80% of the Cobalt refining market.
China is also among the five top countries with the most lithium resources and it has been buying stakes in mining operations in Australia and South America where most of the world’s lithium reserves are found.” They do this through programs like their “silk road initiative” where they make strategic investments in often poor nations that give them control of strategic land and resources – something we will play directly into if we support an EV boom here in Canada.
Perhaps an example of the Silk Road Initiative, “China’s Tianqi Lithium owns 51 percent of the world’s largest lithium reserve in Australia. In 2018, the Chinese company also became the second-largest shareholder in Sociedad Química y Minera—the largest lithium producer in Chile.” Another example of China’s control of the EV battery supply chain is that despite China’s mines only accounting for 6 percent of the world’s manganese – they refined 93% of the world’s manganese in 2019.
The American Energy Alliance concluded their report by making a scathing assessment about the current direction of America under Biden – and by default Canada’s direction under Prime Minister Trudeau.
They said “with Biden’s plans, the United States will be dependent again on key minerals for its energy system and this time the dependency will be with one country—China. According to the U.S. Geological Survey, the United States imported 78 percent of its cobalt, and all of its graphite in 2019. It could take 20 to 30 years for the United States to catch up with China. It could also entail the development of new mines in the United States, which have historically been opposed by the same environmental groups and politicians who have urged the United States to electrify its vehicle fleet. It is clear that electrification of the U.S. economy and its transportation system will mean the “Chinafication” of these important parts of our economy.”
In closing, although Canadians may like the idea of EVs – there are some massive questions that need to be answered before we proceed down this path. Are we ok with EV production increasing if it leads to more child labour globally? Do we want China to stay out of our transportation systems and vehicle fleets – if so (In my opinion obviously we do) we can’t promote EVs as they’re created today.
For to do so is to contribute directly to a nation that runs on a social credit system – grading their citizens every movement. To rush towards an “EV revolution” is to rush towards a world where we support a nation that imprisons over 1 million Uyghur Muslims and seeks to re-educate them for their religious beliefs. Shifting towards EVs today would mean supporting arguably one of the modern world’s worst human rights abusers – the Chinese Communist Party. You can’t be a supporter of human rights and EVs – the hypocrisy is too thick.
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