Mines extract raw materials; for batteries, these raw materials typically contain lithium, cobalt, manganese, nickel, and graphite.
The “upstream” portion of the EV battery supply chain, which refers to the extraction of the minerals needed to build batteries, has garnered considerable attention, and for good reason.
Many worry that we won’t extract these minerals quickly enough to meet rising demand, which could lead to rising prices for consumers and slow EV adoption. There’s also concern that the US is missing out on economic opportunities, new jobs, and a chance to strengthen the supply chain.
More importantly, mining is routinely associated with human rights abuses and environmental degradation. Certain mines have used or are using child and/or forced labor to extract the minerals used in EV batteries; there are also many documented cases showing the devastating effects of mining on local communities and environments.
Across the world, there is particular concern about the negative impacts of new extractive developments on Indigenous communities. In the United States, the majority of nickel, copper, lithium, and cobalt reserves lie within 35 miles of Indian Country.
Below we explain the steps involved in the upstream portion of the EV battery supply chain, answer five questions about the challenges facing the mining industry, and describe what’s being done to address the industry’s negative impacts.
In the upstream portion of the supply chain, mines extract raw materials; for batteries, these raw materials typically contain lithium, cobalt, manganese, nickel, and graphite.
Because of the energy required to extract and refine these battery minerals, EV production generally emits more greenhouse gases per car than cars powered by fossil fuels. However, the average EV makes up for this difference in less than two years. Over a typical vehicle’s lifetime, EVs produce significantly less emissions than traditional vehicles, making them an essential tool to combat climate change.
Lithium-ion batteries, the kind that power almost all EVs, use five “critical minerals”: lithium, nickel, cobalt, manganese, and graphite.
The Energy Act of 2020 defines critical minerals as a “non-fuel mineral or mineral material essential to the economic or national security of the U.S. and which has a supply chain vulnerable to disruption.” There are around 35 minerals categorized as critical.
Critical minerals are found across the world, but most economically viable deposits are found in only a few places. For instance, much of the world’s cobalt is located in the Democratic Republic of the Congo while lithium is concentrated in South America and Australia. As a result of this geographic diversity, the supply chain for electric vehicles is truly global.
Yes. While demand for these minerals is already high and expected to grow significantly in the coming years, there are enough minerals to meet today and tomorrow’s EV needs.
The problem is that the upstream portion of the supply chain is unprepared to meet this demand. Today, although there are enough minerals, there are not enough operating mines.
Since it can take years to establish a mine, we need to move very quickly to ensure that supply can meet growing demand while also respecting the expressed needs of local communities. This work will require significant investment to do so: in the United States alone, we’ll need to invest $175 billion in the next two or three years to match China’s battery production.
Today’s mining practices can involve:
Child and/or forced labor: According to the International Labor Organization, more than 1 million children are engaged in child labor in mines and quarries; many receive little to no pay. These practices are a form of modern slavery.
Tailings storage are another form of mine waste that harms local environments and residents. Once a mineral has been extracted from the ore, the rest of the ore is disposed of. These leftovers are called tailings and are usually dumped in above-ground ponds held together by humanmade dams. When these dams collapse, they can cause deadly mudslides that destroy farmlands and nearby towns. Collapses can also pollute bodies of water that local communities rely on for food, agriculture, and income. Since 1915, more than 250 tailings dam failures have been recorded around the world, killing 2,650 people. In 2019, a single dam failure at a mine in Brazil claimed the lives of 270 people in a tragic instant.
Water pollution and depletion: Drilling and excavation can contaminate surface water and groundwater reserves. As Earthworks notes, many mines in the US have historically failed to control their wastewater, which has led to polluted drinking water, harm to local habitats and agriculture, and negative public health impacts. Globally, mines dump more than 200 million tons of mining waste directly into lakes, rivers, and oceans every year. Mining also requires huge amounts of water; more than 2 million liters of water are needed to produce one ton of lithium. Because mining often occurs in arid and semi-arid regions, this can seriously stress local water supplies for communities and ecosystems.
Gender discrimination across the mining industry: Despite women’s significant contributions to mining, their work has been less valued and less protected than that of men, according to the International Labour Organization, which also notes that in large-scale mining operations, women rarely make up more than 10 percent of mineworkers. In many countries women are expressly prohibited by law from holding certain positions at mines.
There are many factors that contribute to human rights abuses and environmental degradation, including:
Some mineral reserves are in conflict-affected and high-risk areas: Many of today’s operating mines are in regions labeled as a conflict-affected and high-risk area (CAHRA), which the Organisation for Economic Cooperation and Development defines as places “identified by the presence of armed conflict, widespread violence, or other risks of harm to people.” The presence of civil and international wars, insurgencies, political instability and repression, and corruption are some examples of factors that determine whether an area is considered conflict-affected or high risk. At the time of this writing, the European Union has identified 28 countries with CAHRAs.
Economic dependence on artisanal and small-scale mining (ASM): Unlike large-scale mining, ASMs are operated by individuals, families, and/or groups and are often informal and completely unregulated, which leads to little to no health, safety, or environmental protections. They do not always use modern equipment; some rely on tools like shovels and pickaxes. As the European Union notes, in some cases, ASMs are controlled by armed groups, who use the extracted resources to finance conflicts.
Outdated mining laws: Current US laws governing mining do not address the complex challenges facing the sector. For instance, the General Mining Law of 1872 remains the most prominent mining regulation today in the United States. Governing the extraction of critical minerals on federal lands, it has not been meaningfully updated since President Ulysses S. Grant signed it more than 150 years ago to promote westward expansion. It does not require mining companies to pay federal royalties to taxpayers and includes no environmental protection provisions. Laws such as these do not reflect the complexities of today’s mining practices; it’s especially important that they require free, prior, and informed consent of Tribal nations, who often bear the brunt of mining’s negative impacts.
A lack of tools to monitor mining practices: Without good governance or transparency from organizations, there’s no way to definitively know how most mines treat their workers or affect the surrounding environment. Journalists have been largely responsible for uncovering human rights abuses and environmental degradation. We often rely on assurances from mining companies, which often prove to be inaccurate or incomplete. That’s why we need third-party tools to monitor mining practices: we must have data from trusted sources to meaningfully address destructive operations and hold bad actors accountable while continuously requiring responsible practices.
Activists, advocates, policymakers, employers, governments, and others are working to integrate environmental justice in the EV battery supply chain by:
Onshoring/reshoring/friend shoring efforts: Though far from a complete solution, investing in EV supply chain capacity within the United States and its allies will help diversify supply and limit exposure to human rights abuses and detrimental environmental impacts. When upstream supply is concentrated in a few countries, downstream purchasers have little leverage over their suppliers’ human rights and environmental practices. In general, the United States and its allies have strong oversight over human rights concerns and high-quality environmental protections, although there is always room for improvement. The goal here is not self-reliance, however, but rather greater diversity and competition, helping put pressure on all countries to adhere to improved standards.
Leading efforts to update legislation: At the time of this writing, the Biden administration is convening an Interagency Working Group on Mining Regulations, Laws, and Permitting, which will provide recommendations to Congress on how to reform mining law to include provisions that protect the environment, involve local communities, and reduce the time, cost, and risk of mine permitting. Likewise, the Initiative for Responsible Mining Assurance (IRMA), has provided recommendations to the Department of State’s Clean Energy Resources Advisory Committee regarding what should be included in these updates. The US Department of State’s Minerals Security Partnership has also recently announced principles marking a public commitment to full integration of environmental, social, and governance standards into its work.
Improving EV supply chain transparency: “Battery passports” can help manufacturers certify where battery minerals are sourced and verify that these sources are following globally recognized ethical practices.
Convening stakeholders to drive action. IRMA brings together industry, affected communities, governments, and others to provide an independent third-party verification and certification against a comprehensive standard for all mined materials that provides “one-stop coverage” of the full range of issues related to the impacts of industrial-scale mines.
Automakers are also making commitments to ensure that materials are ethically sourced. For instance, Ford requests that suppliers source raw mined materials from entities committed to and/or certified by IRMA.
Although the upstream portion of the EV battery supply chain faces many challenges, we can address them with investment, improved laws and regulations, and public awareness. These steps will help ensure that we have the batteries we need for an electrified transportation future without harming people or the planet.
Posted by IndustrySelect on Wednesday, March 15, 2023
Looking for detailed profiles of U.S. battery and electronics companies? Reach 13,000+ U.S. electronics companies and their 38,000+ decision-makers with the Electronic & Other Electrical Equipment Industry Database from MNI.
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The largest battery manufacturers offer you a wealth of sales and marketing opportunities. As a bright spot in manufacturing, they promise continued growth.
MNI, compiler and publisher of the industrial data that powers IndustrySelect, produces comprehensive profiles of the nation's manufacturers, including battery manufacturers. According to MNI's survey of hundreds of U.S. battery companies, these are the latest statistcs on the industry:
● The U.S. serves as home to 292 battery companies, providing 34,891 jobs. Despite the contraction you may lament in other markets, this is a job expansion of 3.55%.
● U.S. battery manufacturers report average sales of $52 billion.
● This industry enjoys greater international distribution than manufacturing as a whole, 54% to 29%, respectively.
● At 32%, the South houses the greatest number of these companies. The Midwest comes up second with 27%. The west is home to 2% and the Northeast to 17%. Wherever you’re headquartered, this industry offers prospects.
Related: Key Facts & Statistics on the U.S. Electronic & Electrical Equipment Industry
You’ll find that this massive industrial segment can be categorized into numerous sectors. These include:
● Consumer electronics often use rechargeable batteries. The two most common types are lithium-ion and lithium polymer. Lithium-ion cells are rigid and display familiar designations such as AA and AAA. They find use in smaller items such as remote controls and battery packs for laptop computers. Lithium-polymer batteries are more flexible and can be produced in thinner forms. They are often preferable for larger devices.
● The automotive sector contains several subsectors. Lithium-ion batteries power electric and hybrid vehicles. Lead-acid batteries spark the ignition of fossil-fueled cars and trucks. Wet-cell batteries serve as a secondary system charged by a car’s alternator. Nickel hydride batteries also find automotive uses.
● Stationary energy storage plays a vital role in renewable energy systems, power grids and backup systems. Many in the industry view batteries as a transition, but they are the present solution, and you can expect them to be needed for some time.
● Industrial or commercial batteries find many applications in aerospace, defense, and medical instruments. As with automotive, this sector uses many types of batteries. The designation refers to use rather than chemistry.
● Nickel-cadmium batteries are rechargeable. Power tool and medical device manufacturers use them to energize their products.
The vast market served by the largest battery manufacturers suggests rich prospecting fields for a large variety of suppliers.
1. East Penn Manufacturing Co.
You will find this company in Lyon Station, Pennsylvania. It penetrates many marketplace sectors, including automotive, marine, commercial, industrial and stationary uses. The Lyon facility employs 7,800 workers. This manufacturer sells under the brand names Deka and Lynx. The company maintains the single largest lead-acid battery manufacturing site.
2. Tesla, Inc.
If you visit the Tesla facility in Sparks, Nevada, you’ll find a workforce of 3,000 producing lithium-ion batteries and automotive components. Brands include Powerwall and Powerpack. This factory received considerable press coverage and calls itself Gigafactory 1.
3. Clarios Advanced Solutions, LLC
You can call on this manufacturer in Milwaukee, Wisconsin. The staff of 1,200 produces lithium-ion batteries and systems for hybrid and electric vehicles. They also manufacture lead-acid batteries and storage batteries. This company’s batteries power one in three of the world’s cars.
4. SK Battery America, Inc.
This company in Commerce, Georgia, delivers more than batteries. The 1,000 workers turn out whole electric vehicles, including the Ford F-150 Lightning and the Volkswagen ID. You may also hear this business called SK Innovations.
5. Stryten Salina, LLC
This company in Salina, Kansas employs 950 workers to turn out automotive batteries. The brands include Champion, Exide, Absolyte, Centra and Fulmen.
6. SK Battery America, Inc.
This company maintains a second plant in Commerce, Georgia, on the same road but at a different address than the one previously cited. The listed products are the same, but it employs 940 workers, fewer than the other facility.
7. Ultium Cells, LLC
The manufacturer makes lithium batteries for electric vehicles. The 800-employee company is a joint venture between LG Energy Solutions and General Motors.
8. A123 systems, LLC
This company, in Livonia, Michigan, produces lithium-ion batteries for electric vehicles. A staff of 600 works on systems for buses, low-voltage hybrids, plug-ins and motor sports. The company touts an ultraphosphate technology for better starts in cold conditions.
9. Enersys, Inc.
This manufacturer in Richmond, Kentucky, employs 525 to produce industrial specialty reserve batteries. It takes pride in placing its products everywhere, from satellites to submarines. The batteries are also powering 5G.
10. Clarios, LLC
The 500 employees of Clarios, LLC in Holland, Ohio, make lead-free batteries for start-stop, hybrid and electric vehicles. You might want to keep in mind that Clarios considers itself to have the broadest portfolio of batteries.
Are you looking to build your prospect list with contacts at battery manufacturers and electronics manufacturers? In these fast-moving industries, you need the most up-to-date information on company locations, positions and executive emails.
An IndustrySelect subscription can provide these and the services you need to ride the wave of these developing markets. IndustrySelect provides comprehensive profiles of the nation's 400,000 manufacturers and one million executives, including key contacts in the electronics industry. To learn more about using IndustrySelect to generate the reliable, high-quality leads you need, try a free demo of IndustrySelect, pre-loaded with 800 free leads to get you started!