Visualizing the Global Demand for Lithium
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Visualizing the Global Demand for Lithium

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The following content is sponsored by Scotch Creek Ventures.

Visualizing the Global Demand for Lithium

Visualizing Global Demand for Lithium

Lithium is one of the most in-demand commodities in the world today.

With the ongoing shift to electric vehicles (EVs) and clean energy technologies, governments and EV manufacturers are rushing to secure their supply chains as demand for lithium soars.

But while China has a strong foothold in the lithium race, the U.S. is lagging behind. This infographic from our sponsor Scotch Creek Ventures highlights the rising demand for lithium and the need for a domestic supply chain in the United States.

What’s Driving the Demand for Lithium?

Global lithium production more than doubled in the last four years to 82,000 metric tons in 2020, up from 38,000 metric tons in 2016. Here are some of the factors driving the lithium rush:

  1. More EVs on the Road:
    EV sales have been accelerating in recent years. Between 2016 and 2020, annual electric car sales increased by 297%, up from around 750,000 to nearly 2.9 million cars last year.
  2. Falling Battery Prices:
    Declining lithium-ion battery prices are allowing EVs to compete more aggressively with gas-powered cars. Since 2013, battery costs have fallen 80% with a volume-weighted average of $137/kWh in 2020.
  3. Rise of the Battery Megafactories:
    More battery manufacturing capacity means more demand for the critical minerals that go into batteries. As of March 2021, there were 200 battery megafactories in the pipeline to 2030, and 122 of those were already operational. According to Benchmark Mineral Intelligence, if all 200 battery megafactories were operating at full capacity, their annual demand for lithium would be 3 million tonnes. That’s almost 37 times the 82,000 tonnes produced in 2020.

Although the demand for lithium is rising globally, its supply chain from mines to batteries relies on a only few critical nations.

China’s Lithium Dominance

In 2020, Australia, Chile, and China collectively made up 88% of global lithium production. After mining, the lithium supply chain involves refining, processing, and packaging the lithium into batteries—and the majority of this occurs in China.

In 2019, China produced 80% of the world’s refined battery chemicals, in addition to 73% of lithium-ion battery cells. What’s more, of the 200 battery megafactories in the pipeline to 2030, 148 are in China. As a result, China is far ahead of other countries in the race for lithium and batteries.

On the other hand, the U.S. is heavily reliant on imports for its supply of lithium, with only one lithium-producing mine in the country. As demand increases, this lack of production could threaten U.S. energy independence in the future. To address this and gaps in the supply of other critical minerals, U.S. President Biden also signed an executive order aiming to build secure supply chains for strategic minerals.

But where is lithium in the United States?

Nevada: The Lithium State

Nevada is known as the Silver State for its rich history of silver mining. Today, it’s the only source of lithium production in the U.S.

Clayton Valley and Kings Valley, two of the country’s largest lithium deposits, are in Nevada. The country’s only producing mine, Albemarle’s Silver Peak Mine, produces around 5,000 tonnes of lithium every year in Clayton Valley. Furthermore, the region is among the world’s richest closed-basin brine deposits based on grade and tonnage.

In addition to a rich lithium deposit, mining companies in Clayton Valley can also reap the advantages of Nevada as a jurisdiction. These include access to infrastructure, a skilled mining workforce, and proximity to a battery manufacturing base with Tesla Gigafactory 1. But that’s not all—in 2020, the Fraser Institute gave Nevada the top spot for mining investment attractiveness globally.

Meeting Lithium Demand for Energy Independence

As countries work to expand EV adoption, critical battery metals like lithium are becoming geopolitically significant, and their supply could redefine energy independence going forward. For this reason, the U.S., EU, and Canada all have lithium on their list of minerals that are critical to national security.

The U.S. needs to build a domestic lithium supply chain from the ground up, and Nevada has the potential to support it with lithium in Clayton Valley. Scotch Creek Ventures is developing two lithium mining projects in Clayton Valley to supply lithium for the green future.

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ESG Data: The Four Motivations Driving Usage

ESG controversies can damage a company’s value, but ESG data may be able to help manage this risk. What are other reasons for using ESG data?

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ESG Data: The Four Motivations Driving Usage

Data is key to the environmental, social, and governance (ESG) revolution. Access to granular ESG data can help boost transparency for market participants. Unfortunately, 63% of U.S. and European asset managers say a lack of quantitative data inhibits their ESG implementation.

Being clear on the potential application of this data is equally important.

  • Investors and banks can use ESG data for risk assessment, to spot opportunities, and to push companies for change.
  • Companies can publish their own ESG data, quantify progress on their ESG goals, and use data to inform decisions.
  • Policymakers can use ESG data to inform regulatory frameworks and measure policy effectiveness.

This graphic from ICE, the second in a three part series on the ESG toolkit, explores four primary motivations of ESG data users.

1. Right Thing

The objective: Having a positive social or environmental impact.

For investors, this can involve screening out companies that conflict with their values and selecting companies that align with their ESG objectives.

As another example, it can involve comparing the social impact of municipal bonds. One way investors can measure social impact is through scores that quantify the potential socioeconomic need of an area, using metrics like poverty and education levels. Here are the social impact scores for three actual municipal bonds issued in Florida.

StateBond IssuerSocial Impact Score
(Higher = larger potential impact)
FloridaIssuer #176.5
FloridaIssuer #266.6
FloridaIssuer #343.2

Issuer #1’s bond is projected to have a community impact that is nearly twice as high/positive as Issuer #3’s bond.

For companies, doing the right thing can include assessing their progress on ESG goals and benchmarking themselves to peers. For example, gender and racial representation is a growing area of focus.

2. Risk

The objective: Managing ESG risks, such as climate and reputational risks.

For investors, this can involve back-testing or analysis around specific risk events before they materialize. Here are the risk profiles of two actual municipal bonds in California. The shown bonds are practically identical in many ways, except their wildlife score.

 Issuer #1Issuer #2
Current Coupon Rate5.0%5.0%
Maturity DateAug 01, 2048August 01, 2048
S&P RatingAAAA
Price to Date (Call Date)Aug 01, 2027Aug 01, 2027
Price122.0122.0
Yield1.0%1.0%
Wildfire Score (Higher = more risk)3.62.7

Managing ESG risk can also involve analyzing a company’s policies and governance for weaknesses. This is important as an ESG controversy can have long-lasting effects on the valuation of a company.

In one study, companies with ESG controversies dropped more than 10% in value relative to the S&P 500. They hadn’t fully recovered a year after the incident.

3. Revenue

The objective: Targeting outperformance through ESG analysis.

Selecting companies with strong ESG data can align with long-term growth trends and may help boost performance. For heavy emitting industries, research indicates that European companies with lower emissions trade at much higher valuations. The chart below shows companies’ price-to-book ratio relative to the Stoxx 600* sector median.

 UtilitiesEnergyMaterials
Above Median Emission Intensity (Bad)1.91.12.0
Below Median Emissions Intensity (Good)2.71.92.1

*The Stoxx 600 Index represents large, mid and small capitalization companies across 17 countries of the European region: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

Energy companies with low emissions trade at a valuation nearly two times higher than energy companies with high emissions.

4. Regulation

The objective: Understanding and complying with relevant ESG regulation.

The International Sustainability Standards Board has announced a global reporting proposal aligned with the Task Force on Climate-related Financial Disclosures (TCFD). In addition, a growing number of jurisdictions will require organizational reporting that aligns with the TCFD.

  • Brazil
  • European Union
  • Hong Kong
  • Japan
  • New Zealand
  • Singapore
  • Switzerland
  • UK

Not only that, a European Union regulation known as Sustainable Finance Disclosure Regulation (SFDR) came into effect in 2021. It seeks greater transparency in disclosures from firms marketing investment products. Even firms located outside the EU could be impacted if they serve EU customers. In total, the market cap of these non-EU companies exposed to SFDR amounts to $3.2 trillion.

Matching ESG Data with Motivation

There will be growing demand for transparent data as ESG investing flourishes. To remain competitive, investors, policymakers, and companies need access to ESG data that meets their unique objectives.

In Part 3 of the ESG Toolkit series sponsored by ICE, we’ll look at key sustainability index types.

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The Hierarchy of Zero Waste

In a world that generates 2 billion tonnes of waste every year, waste management has become a global concern. Here are some strategies to help guide zero waste policies.

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The Hierarchy of Zero Waste

Many cities have set ambitious zero waste targets in the upcoming decades.

The idea is to have communities where waste generation is avoided, and products are shared, reused, or refurbished.

This graphic, sponsored by Northstar Clean Technologies, shows the main strategies and hierarchy to guide zero waste policies.

What is Zero Waste?

In a world that generates approximately 2 billion tons of waste every year, waste management has become a global concern. Thus, countries and cities are increasing efforts to reduce or even eliminate waste when possible.

The Zero Waste International Alliance defines zero waste as “the conservation of all resources  by means of responsible production, consumption, reuse, and recovery of products, packaging, and materials without burning and with no discharges to land, water, or air that threaten the environment or human health.”

Becoming a zero waste community, however, is a complex task.

Currently, Sweden recycles 99% of locally-produced waste and is considered the best country in the world when it comes to recycling and reusing waste. However, such results only came after almost 40 years of recycling and reuse policies.

In line with this, here are seven commonly accepted steps you can use to achieve zero waste:

1. Rethink, Redesign Products

The global population consumes 110 billion tons of materials each year, but only 8.6% is reused or recycled. In a zero waste society, single-use products are avoided and products are designed with sustainable practices and materials.

2. Reduce

Consumption must be planned carefully to reduce the unnecessary use of materials. Consumers must choose products that maximize the usable lifespan and opportunities for continuous reuse. Companies must minimize the quantity and toxicity of materials used.

3. Reuse

The value of products is maintained by reusing, repairing, or refurbishing for alternative uses.

4. Recycle

Products are diverted from waste streams and recirculated into use. Resilient local markets are developed, allowing the highest and best use of materials.

5. Material Recovery

Component materials like cement, metals, or asphalt are recovered from mixed waste and collected for other applications.

In the U.S. alone, around 12 million tons of asphalt shingle tear-off waste and installation scrap are generated from roof installation each year. Currently, more than 90% of this is discarded in landfills. This material can be repurposed to create new products like liquid asphalt, fiber, and aggregate.

6. Residuals Management

Waste is biologically stabilized and sent to responsibly managed landfills.

7. Unacceptable

The production of materials that are not recoverable and can negatively impact the environment must be avoided.

Reducing our Climate Impact

Reducing, recycling, and recovering materials can be a key part of a climate change strategy to reduce our greenhouse gas emissions.

According to the U.S. Environmental Protection Agency, about 42% of all greenhouse gas emissions are caused by the production and use of goods, including food, products, and packaging.

Even though 100% zero waste may sound difficult to achieve in the near future, a zero waste approach is essential to reduce our impact on the environment.

Northstar Clean Technologies aims to become the leading recovery and reprocessing company for asphalt shingles in North America.

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