Mining Mad: Global Shift to Renewables Drives Lithium Demand​


By Violet O'Gorman​

The Story

This year has been a bumper year for metals such as lithium and copper, which started with “a string of mining IPOs in London” (Reuters). In the US, the Biden presidency recently announced its intention to “boost domestic recycling of batteries to reuse lithium and other metals” (Reuters).

The reports come amid debate on the future of mining for metal such as Lithium – deemed “the magic metal needed to power batteries, drive electric cars and hasten a greener future” (The Times). Lithium is commonly used for battery storage of renewable electricity – which is crucial to a future global green society, so that energy could be stored from peak times to cover for intermittent shortages of renewable power.

The demand for Lithium “is set to explode with the rise in renewables technology, but years of under-investment threaten to leave supply short” (Financial Times). In recent years, this has led to both the US and the EU listing lithium as a critical raw material. Though lithium plays a huge role in the distribution and storage of renewable energy, ironically, traditional mining methods for lithium have huge environmental impact - using a huge amount of water, and potentially causing issues such as water shortages and pollution.

Impact on Businesses and Law Firms

Investment in both lithium mining, and in other, greener, methods of lithium extraction has increased. In the UK, Cornish Lithium recently “completed the construction of a low-carbon lithium extraction test site to bolster the UK’s domestic EV supply chain” (Placetech), hopefully allowing for domestic lithium extraction from 2025. The company is reportedly also planning an IPO next year. Plans for recycling lithium have also seen increasing investment; Biden is reportedly keen to open several more recycling plants in the US, whilst in the UK, “research funded by the government […] is trying to find new ways of recycling lithium-ion” (Wired).

It is likely that law firms operating in the commodities sector will seek advice from clients for listings, M&A, and research into metals. In October 2020, Tesla announced it had “secured its own lithium mining rights in Nevada”, and was planning “to use a new, ‘very sustainable way’ of extracting the metal” to help “cut its [EV] battery costs by 50%” (Lexology). On projects like this, law firms will be needed to advise companies on the risks of straying from their usual domain - in Tesla’s case, cars – to invest into their supply chain. Furthermore, law firms with a strong international presence, or offices abroad – for example in South America - might fare well from this boom, as clients seek their expertise about the supply chain both domestically and abroad