As the world gradually moves toward renewable resources like wind, solar, and geothermal energy, more and more batteries will be needed to store the electricity they create. Lithium is, and will continue to be, an essential mineral for handling the world’s energy stores. Lithium-ion battery demand is expected to grow by about 27 percent annually to reach around 4,700Gwh by 2030. The majority of demand will come from electric vehicles, with a moderate demand increase for energy storage solutions. This is why it is so important that lithium is extracted as efficiently as possible while improving and increasing refining bandwidth, and it’s this part of the manufacturing process that has significant bottlenecks.

Growing Challenges and Opportunities

Tesla (TSLA) CEO Elon Musk reminded investors in June 2022 of a growing challenge in the US when it comes to the electric vehicle industry: securing refined lithium for EV batteries. Lithium is abundant, Musk noted. The challenging part, he said, is processing it to the point that it can be used in battery cells. “You have to refine the lithium into battery-grade lithium carbonate and lithium hydroxide, which has to be extremely high purity,” Musk said.

Currently, China dominates the processing of many critical minerals, including lithium. China still controls more than half of the world’s lithium processing and refining capacity, while the U.S. has recently controlled just 1%. Some experts are concerned that there won’t be enough battery-grade lithium to go around as automakers accelerate the production of electric models in the coming years. The scramble for the crucial metal has incentivized numerous startups to get into the lithium space and cement themselves in the EV supply chain. It’s also pushed car companies to go straight to the source and secure their own supplies through partnerships. 

“The choke point is much more on refining capacity than it is on mining. Lithium is actually very common throughout the world, including in the US,” Musk said on Tesla’s earnings call. “It’s much more a question of where the refining capacity is and if the refining capacity can keep up.”

Musk explained, “It is basically like minting money right now. There’s, like, software margins in lithium processing right now,” he said. “So I would really like to encourage, once again, entrepreneurs to enter the lithium refining business. You can’t lose.”

The U.S. Department of Energy (DOE) has also weighed in on the matter, noting:

“Lithium is relatively abundant, and there are sources of supply in relatively friendly countries; however, the challenges of keeping up with expected rapid increases in demand and the concentration of lithium refining in a small number of countries contribute to supply concerns.”

The Fast Track Action Subcommittee of the National Science and Technology Council (NSTC) of the Executive Office of the President has listed lithium batteries as critical and emerging technologies (CETs) in a February 2024 report in conjunction with other advanced technologies that are potentially significant to U.S. national security.

Reliability Programs Solving Lithium Refining Challenges

On how to address the supply challenges associated with the production of battery-grade lithium hydroxide, we spoke to industry expert Mohammad Rahman, a Global Reliability Engineer leading reliability programs at a global lithium company. Rahman is responsible for ensuring the continuous supply of this essential material, which supports the green energy transition and the advancement of electric vehicles and renewable energy storage solutions. Drawing on the skills he has developed over his distinguished career across various industries, Rahman aims to maintain and increase the capacity of the lithium supply.

“Ensuring production output while maintaining high purity is challenging, and the only way to achieve it is through a rigorous reliability program,” Rahman explains. “The real challenge is preventing the introduction of machinery impurities into the finished product. Often, magnetic impurities caused by equipment failure compromise the product, forcing us to rework and ultimately miss production targets. The goal is to stay ahead of the failure curve, meaning we must predict and prevent failures before they occur.”

He continues, “We are implementing various predictive technologies, including IIoT (Industrial Internet of Things) solutions and reliability-centered maintenance at our operational sites worldwide, to address these challenges.” Acknowledging the realities of industrial operations, Rahman adds, “Equipment failure and downtime are inevitable, but the key is to learn from these experiences and continuously calibrate our programs as we move forward and embrace the next industrial revolution.”

With the United States increasingly reliant on lithium for battery production, the supply chain will likely struggle to keep up with future demand, underscoring the importance of Rahman’s efforts in the lithium industry. He aims to enhance visibility into day-to-day operations and maintenance activities through metrics and KPIs. By making these metrics and KPIs more transparent and accessible, stakeholders can better understand their impact on reliability and profitability, enabling more informed decision-making and improved outcomes.

Rahman is also leveraging new technologies like artificial intelligence (AI) and the IIoT to further boost productivity in the lithium industry and other green energy sectors, enhancing overall equipment effectiveness, increasing uptime, and ultimately establishing a reliable and sustainable green energy infrastructure.

As demand for resources like lithium remains high and is expected to grow, talented and dedicated individuals like Mohammad Rahman will be essential in ensuring that critical systems can keep up with this demand, helping to lead society toward a more energy-independent future.