Bill Gates’ investment fund, Breakthrough Energy Ventures, has invested ten million dollars in a start-up that only has seven employees and that has no clients or income. The name is Mangrove Lithium. Although it is a project that is still ‘very green’, it has the potential to trigger a very drastic change for the better in the lithium battery industry, helping to solve the supply problems that the electric car could face in the next years.
It’s a niche investment, but one that could have significant implications for the rapidly growing electric car market. The founders of this small company seek to improve a very specific part of the lithium supply chain: converting raw lithium into battery material.
Lithium is used in batteries for electric vehicles because it is the lightest metal and has the highest charge-to-weight ratio, which is important when building a battery for transportation. Over the past decade, the number of electric vehicles has expanded rapidly, exceeding 10 million electric vehicles on roads globally, according to the International Energy Agency. As the demand for electric vehicles continues to grow, so will the demand for lithium.
Growth in the number and size of batteries for electric vehicles will be responsible for more than 90% of lithium demand by 2030, according to Andrew Miller, chief operating officer for Benchmark Mineral Intelligence, an intelligence company that analyzes the market for batteries. of lithium ion in its process within the supply chain of electric vehicles.
Demand is expected to grow from roughly 354,000 tons of lithium carbonate in 2020 to 2.57 million metric tons by 2030. That demand could be difficult to meet not because the amount of lithium is limited (which too), but because There are not enough resources to convert that lithium into the necessary derivative used by the battery industry, Miller says.
‘Magic’ with lithium
Mangrove aims to help remove that bottleneck. In a simple (and inaccurate) way, this firm intends to extract the lithium and put it almost directly into the batteries, reducing processes, costs and shortening times.
“There is great demand for competitive technology to produce lithium compounds for batteries,” explains Céline Büchel, senior research analyst in chemicals, minerals and mining at market research firm IHS Markit. “It is necessary to create new forms of production to meet the huge demand for battery-powered vehicles. “
“The heart of the process”
There are five segments of the lithium market: mining and extraction; chemical processing; manufacture of battery components; battery mount; and end-use production, where batteries are placed in mobile phones, laptops, electric vehicles, and the like.
Mangrove’s technology focuses on stage two, chemical processing. “We are the heart of the process,” he assures the CNBC Mangrove CEO Saad Dara. “We take the raw lithium and refine it into a suitable battery product.”
The first version of what would become Mangrove began in 2013 as Dara’s graduate project at the University of British Columbia, where she earned her Ph.D. in chemical and biological engineering.
In 2017, Dara and his colleagues obtained money from the Canadian federal government to pursue water desalination and chemical production and turned that technology into a company, which was first called Mangrove Water Technologies. (It is still running a desalination project in western Canada.)
A company that wants to be revolutionary
In 2018, a major lithium producer in South America became interested in learning about Mangrove’s equipment and seeing if it could process lithium chloride, a specific form of lithium that is extracted from the ground in mining, into lithium hydroxide. This external interest sparked Mangrove and spurred the launch of this electrochemical process that refines lithium in a way that, according to the company, it is more efficient from an energy point of view than conventional processes.
“The problem you have with lithium mining and processing in general is that it is quite inefficient,” explains Ian Hayton, a materials and chemicals analyst at research and consulting company Cleantech Group. “With the current lithium extraction process, you probably only get about 50% of the lithium from actual brine or hard rock.” With the Mangrove technology, it would be used 90%, says Dara.
Dara also explains that the raw material used in the industrial process remains separated from the product in chemical processing, leading to a higher quality product.
“We work with a method in which the lithium hydroxide or carbonate that is being produced does not interact with other chemicals. It does not come into contact with other things. And then you are creating a high quality product for batteries,” he says.
“Our investment in Mangrove stems from our analysis of the growth of electric vehicles, a massive increase in demand for lithium and the potential supply and cost constraints arising from this rapid increase in demand,” he assures the CNBC Carmichael Roberts, Co-Chair of the Investment Committee at Breakthrough Energy Ventures.
“When Mangrove can successfully implement its solution, will represent a 40% reduction in the cost of lithium hydroxide in battery grade and will improve the (internal rate of return) for brine production and refining projects, allowing them to be ready faster and at a lower cost, “he added.” This will be really important. “
The promise of lithium impressed Zheng Chen, a professor at the University of California, San Diego who works on recycling processes for lithium-ion batteries, an expert who has no direct connection to the company.
“The ability to directly produce high-purity lithium carbonate and lithium hydroxide is impressive,” says Chen. But he says doing this process on a large scale can be tricky.
“They seem to have shown a reasonable scale, but can they operate to produce high purity lithium salt on a 10,000 ton scale at a competitive cost at the same time? If they can, it will be a game changer for the industry,” Chen said.
Mangrove is not Breakthrough’s only investment in this sector. In October, the firm announced an investment in Lilac Solutions, a lithium extraction technology company that increases lithium production from brine resources.
Mangrove, for now, only has seven employees and a pilot plant that is operating in Vancouver. The firm will use the Breakthrough money to build an industrial-scale commercial plant. Dara says the company wants to have customers who give it a profit by the end of 2022.
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