Lithium: production by Project, 2018

RANK	PROJECT	LEAD COMPANY	COUNTRY	RESERVES (TONNES)	GLOBAL SHARE
1	Greenbushes	Chengdu Tianqi Industry Grp Co, Albemarle Corp.	Australia	108,316	22%
2	Wodgina	Albemarle Corp., Mineral Resources Ltd.	Australia	69,499	14%
3	Mount Marion	Mineral Resources Ltd., Ganfeng Lithium Co. Ltd.	Australia	55,693	11%
4	Salar de Atacama	Sociedad Quimica y Minera	Chile	50,400	10%
5	Salar de Atacama	Albemarle Corp.	Chile	37,681	8%
6	Mt Cattlin	Galaxy Resources Ltd.	Australia	22,319	5%
7	Salar del Hombre Muerto	Livent Corp.	Argentina	21,597	4%
8	Pilgangoora	Pilbara Minerals Ltd.	Australia	21,044	4%
9	Salar de Olaroz	Orocobre Ltd., Toyota Tsusho Corp., Jujuy Energia y Mineria	Argentina	12,413	3%
10	Yichun	Yichun Tantalum Co Ltd	China	11,293	2%

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Data Source: S&P Metal and Mining Database

 

*lce = lithium carbonate equivalent

HOW DOES EV BATTERY PRODUCTION IMPACT HUMAN RIGHTS, LOCAL GOVERNANCE, AND

ECONOMIC DEVELOPMENT IN MINERAL- PRODUCING COUNTRIES?

The growth in demand for the mineral components of EV batteries has the potential to boost public revenues and economic development in countries that are home to these mineral resources, and governments in mineral-rich countries are assessing opportunities to take advantage of a potential boom. Mineral extraction has also been associated with human rights and governance challenges, however, and mining of EV battery materials is no exception. In recent years, mining operations around the world have been linked to human rights impacts such as long-term health risks and dangerous conditions for workers, child labor and underpayment, forced evictions, police detentions and armed conflict.22 These problems do not permeate all mining projects, of course, and the global mining industry has taken steps in recent years to enhance its approach to health, safety, security and community relations.23

These acute human rights impacts link in many cases to a deeper set of governance challenges that have allowed corruption to persist and made it difficult for many citizens in resource- rich countries to access the economic opportunities associated with the mining sector. Many mineral-rich developing countries lack adequate policy frameworks, accountability processes, and government capacity to enforce strong protections for citizens and manage the sector in the public interest.24

Certain risks are particularly connected with mining for minerals used in EV batteries. Specifically, the heavy concentration of global cobalt reserves in the Democratic Republic of Congo (DRC, where more than half of global cobalt production originates) has dramatic impacts on the human rights risks associated with the battery supply chain due to significant governance challenges in the country. Unregulated artisanal cobalt mining (i.e., small-scale mining performed by groups of individuals using hand tools) in the DRC is linked to regular risk of injury and death due to mine collapses, lung disease from particle inhalation, and  child labor concerns, with weak enforcement of health and safety standards or child labor rules.25 International observers and NGOs have reported that state agents belonging to Congolese state entities have been involved in corrupt practices and failed to enforce child labor requirements, and they have linked public officials to rogue elements of security forces that control artisanal mine sites and trading centers.26 However, a small number of more formal artisanal mine sites are making notable progress in improving conditions. Meanwhile, numerous NGOs and journalists covering industrial mining of cobalt have identified large-scale public corruption wherein public officials have steered financial benefits from the Congolese population into the hands of privileged elites. One type of scheme involves the granting of stakes in mineral licenses at below-market value to well-connected intermediaries, who then sell them for a profit and distribute kickbacks to top officials. This practice has sparked investigations of major mining companies from the U.S., Canadian and British governments.27

Concerns regarding the lithium sector are not as widely reported as for cobalt. Overall, the quality of mining sector governance varies widely among countries with large known lithium reserves. The 2017 Resource Governance Index, which measures transparency and accountability in public management of the sector, assessed several countries with reserves that rank among the world’s largest. Among the findings, researchers concluded that Chile (second in global reserves) exhibited “good” overall performance, and Australia (third-largest)

 

 

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and Mexico (sixth-largest) exhibited “satisfactory” governance. However, in some cases indigenous residents of lithium mining areas have protested mining operations over inequality and lack of consent in siting operations.28 Natural resource governance in Bolivia—which is not currently producing commercial lithium, but hosts some of the world’s largest reserves and may be a significant future source—could pose significant challenges; the Resource Governance Index did not assess the Bolivian mining sector, but Bolivia has experienced significant political turmoil and analysts have raised concerns about the governance and viability of mineral projects in the country.29

The sustainability of the EV industry requires that industry actors, governments, researchers and civil society address the human rights and governance challenges associated with the extraction of battery minerals, while looking for win-win solutions that bolster global supply and promote development within the producer countries. This brief discusses below several initiatives that tackle these challenges. In considering the net impact of a transition from fossil fuels to electric vehicles, however, it is important to note that fossil fuel exploration and extraction has also been associated with some of the most severe problems of human rights abuse, conflict and corruption in the world.30 The average scores on the Resource Governance Index for oil-producing countries (47 out of 100) and mineral-producing countries (48 out of

100) are virtually identical, signaling that mis-governance remains a challenge in both sectors. A recent Organization for Economic Co-operation and Development (OECD) survey of officials from state-owned enterprises identified mining as the industry with the second-highest incidence of corruption, with 50 percent of respondents saying they had observed corrupt acts. The sector with the highest incidence of corruption was oil and gas, at 63 percent.31

 

 

 

BUILDING A SUSTAINABLE ELECTRIC VEHICLE BATTERY SUPPLY CHAIN                                                                                                                                                                  10

CENTER F OR LA W, ENERG Y & THE ENVIRONMENT | NA TURAL RE SOURCE GO VERNANCE INSTITUTE