Mineral demand is growing and will continue to grow, driven by demand for mineral-intensive applications from aircraft engines to electric vehicle batteries. To meet this heightened mineral demand, the mineral supply must also increase—by a lot. Benchmark Mineral Intelligence estimates that at least 384 mines of lithium, nickel, cobalt, and graphite are needed to meet projected demand by 2035. Can such a tremendous supply of minerals come online in time? Technology—namely, large-scale commercialization of existing technologies—can help increase the mineral supply by enabling the profitable extraction and processing of minerals that were previously unprofitable to extract and process.
An example of technology increasing the mineral supply can be seen in the nickel industry. Nickel deposits are generally of two types: sulfides and laterites. Historically, mining companies have largely targeted sulfide deposits over laterite deposits because sulfide deposits tend to have higher profitability due to valuable byproducts (e.g., copper, cobalt, platinum group metals), cheaper processing, and locations in jurisdictions with relatively low investment risks like Canada and Australia. The lower processing costs are from the ability of sulfide ores to be concentrated at the mine site and then shipped to centralized processing facilities, helping offset the higher costs of mining sulfide ores.
As nickel sulfide deposits were depleted, mining companies sought to develop nickel laterite deposits in developing jurisdictions like Indonesia, but they have struggled to process laterite ore profitably at scale for supplying high-purity nickel markets. Previously, Western companies attempted to use high-pressure acid-leaching (HPAL), yet their processing plants went over budget, had delayed construction timelines, and failed to ramp up and meet nameplate capacity. However, Chinese companies, namely the China ENFI Engineering Corporation, successfully commercialized HPAL technology after years of effort, essentially unlocking immense nickel laterite reserves that could then enter the nickel market. This situation is particularly evident in Indonesia where Chinese companies—often supported by ENFI—have built and are building many HPAL facilities to process Indonesia’s laterite ore.
The reason behind Chinese companies’ HPAL success is neither novel processing technology nor equipment. HPAL technology is broadly the same today as it was when first commercialized at Moa Bay in Cuba in 1959, and modern HPAL equipment is similar to the equipment used by second-generation plants built in the late 1990s. Successful wide-scale HPAL deployment by Chinese companies is attributable to iterative improvements over multiple HPAL projects and the use of established industrial parks, just like China’s immense scaling of nickel pig iron production in Indonesia. The original Chinese-led HPAL project at Ramu in Papua New Guinea took six years to ramp up to nameplate capacity, while a recent Chinese joint venture HPAL plant—PT Halmahera Persada Lygend on Obi Island in Indonesia—took one year to meet nameplate capacity.
Conversely, non-Chinese companies that have built HPAL plants generally build only one, which usually struggles operationally. For example, Vale’s Goro HPAL plant commissioned two years behind schedule, was $3 billion over the original capital expenditure budget, and failed to meet nameplate capacity. The Japanese company Sumitomo Metal Mining is the only non-Chinese company to have built more than one HPAL plant, and it has built two HPAL plants in the Philippines—two lines at Coral Bay and one line at Taganito—with both plants reaching over 90 percent of the nameplate capacity processing rate within three years. Increasing the supply of other minerals will also require iterative efforts to achieve evolutionary gains in executing technically challenging mineral projects, like direct lithium extraction projects.
Other technologies could significantly increase the future mineral supply, such as technologies that can process—at scale—shredded end-of-life batteries called black mass. As more electric vehicles reach their end-of-life, more end-of-life batteries and thus their battery chemicals (e.g., lithium, nickel, cobalt, manganese) will become available. Current and planned facilities to process this black mass could significantly grow mineral supplies in the long run, but the combination of a rapidly growing battery market, increasing battery life, changing battery chemistries, and growing potential to reuse batteries in a second-life market means that recycled materials will not likely form the majority of the feedstock supply for several decades. Other potential sources of feedstock that could significantly increase the mineral supply include seabed minerals like polymetallic nodules, although the feasibility of profitably extracting such resources at scale with a high degree of social acceptance remains questionable.
Governments like the United States are funding the commercialization of technologies that could expand the mineral supply. For example, the US Department of Energy’s Loan Programs Office—through the Advanced Technology Vehicles Manufacturing (ATVM) loan program—has offered conditional loan commitments up to $2 billion to Redwood Materials and $375 million to Li-Cycle for building battery recycling facilities. As of March 2024, the ATVM program has approximately $47 billion remaining in direct loan authority. The US Department of Energy’s Title 17 Clean Energy Financing Program can provide loan guarantees for innovative critical mineral projects, and it has $72 billion remaining in loan guarantee authority.
The US government should prioritize commercializing existing technologies rather than discovering novel technologies. For example, instead of disbursing millions of dollars to research how bacteria and proteins can refine rare earth elements, the US government should allocate those funds to build rare earth refining facilities that use existing solvent extraction technology. The US government could also consider ways to facilitate the transfer of commercial technology from foreign mineral companies—including Chinese companies—to US mineral companies, such as requiring foreign mineral companies that receive funding for US mineral projects to partner with American companies.
Moving forward, global mineral demand will continue to grow, and mineral shortages may occur absent significant increases in the mineral supply. However, large-scale commercialization of technologies—like HPAL—that can profitably extract and process minerals can help bridge the projected supply gap. Governments, especially the United States, should prioritize funding for the commercialization of existing technologies that extract and process minerals. These technologies can help increase the mineral supply, but whether they increase the mineral supply to adequate levels to meet projected demand remains to be seen.
