Bill Gates invests in Mangrove Lithium for the booming electric vehicle market

The Mangrove Lithium pilot plant in Vancouver, Canada.

Photo courtesy of Saad Dara, CEO of Mangrove Lithium

Bill Gates’ investment fund Breakthrough Energy Ventures recently invested $ 10 million in a seven-person start-up with no income and no clients, Mangrove Lithium.

This is a niche investment, but one that could have critical implications for the rapidly growing electric vehicle market, as its founders aim to improve a very specific part of the lithium supply chain: transforming lithium. raw material for batteries.

Lithium is used in electric vehicle batteries because it is the lightest metal and has the highest load-to-weight ratio, which is important when building a battery for transportation. Over the past decade, the number of electric vehicles has grown rapidly, exceeding the 10 million electric vehicles in circulation around the world, according to the International Energy Agency. Like demand for electric vehicles continues to grow, it will be the same for the demand for lithium.

The growth in the number and size of batteries for electric vehicles will be responsible for more than 90% of lithium demand by 2030, according to Andrew Miller, chief operating officer of Benchmark mineral intelligence, a market analysis company for the lithium-ion battery to electric vehicle supply chain. Demand is expected to increase from approximately 354,000 metric tonnes of lithium carbonate equivalent in 2020 to 2.57 million metric tonnes by 2030. (Lithium carbonate equivalent is the metric used to standardize the weights of various products. lithium products.)

This demand could be difficult to meet, not because the amount of lithium is limited, but because resources are limited to transform that lithium into a form that can be used by the battery industry, Miller said.

Mangrove aims to help remove this bottleneck.

“The competitive technology to produce battery grade lithium compounds is in high demand,” explains Celine Büchel, senior research analyst in the fields of chemistry, minerals and mining at market research firm IHS Markit. “New production capacities need to be built to meet the huge demand for battery-powered vehicles.

“The heart of the process”

There are five segments of the lithium market: mining and extraction; chemical treatment; manufacture of battery components; battery assembly; and end-use production, where batteries are put into cell phones, laptops, electric vehicles and the like.

Mangrove’s technology focuses on the second step, chemical treatment.

“We are at the heart of the process,” Mangrove CEO Saad Dara told CNBC. “We take the raw lithium and refine it into a battery-grade product”,

The first iteration of what would become Mangrove began in 2013 as Dara’s graduation project at the University of British Columbia, where he obtained his doctorate in chemical and biological engineering.

In 2017, Dara and her colleagues secured money from the Canadian federal government to continue water desalination and chemical production and transformed this technology. in a company, which was first called Mangrove Water Technologies. (He is still pursuing a desalination project in Western Canada.)

In 2018, a South American lithium producer questioned whether the Mangrove team could turn lithium chloride, a specific form of lithium mined from the ground in mines, into lithium hydroxide. The investigation prompted the start-up to pursue an electrochemical process that refines lithium in a way the company says is more energy efficient than conventional processes.

“The problem you have with mining and processing lithium in general is that it is quite inefficient,” Ian hayton, materials and chemicals analyst at the research and consulting firm Cleantech Group. “With the current lithium mining process, you probably only get about 50% of the lithium from actual brine or hard rock.”

Mangrove technology recovers 90%, says Dara.

Dara also explains that the raw material, or the raw material used in the industrial process, remains separated from the product during the chemical treatment, which leads to a better quality product.

“We operate in such a way that the lithium hydroxide or carbonate that is produced does not interact with other chemicals.

That’s a lot of promises, but Breakthrough Energy Ventures delivers.

“Our investment in Mangrove stems from our analysis of the growth of electric vehicles, a massive increase in demand for lithium and the resulting potential supply and cost constraints,” Carmichael Roberts, co- head of the investment committee of Breakthrough Energy Ventures.

“When Mangrove is able to successfully deploy its solution, it will represent a 40% reduction in the cost of battery grade lithium hydroxide and improve the [internal rate of return] for brine production and refining projects, getting them online faster and more cheaply, “he added.” It will be a very big deal. “

The Promise of Lithium Impressed Zheng chen, a professor at the University of California at San Diego who works on lithium-ion battery recycling processes but has no connection with the company.

“The ability to directly produce high purity lithium carbonate and lithium hydroxide is impressive,” Chen said. But he says scaling up could be a challenge.

“It looks like they’ve shown a reasonable scale, but can they work to produce high purity lithium salt on a 10,000 ton scale with financial rewards at the same time? If they can, it will be a game changer, ”Chen said.

Mangrove isn’t Breakthrough’s only investment in space. In October, the company announced a investment in Lilac Solutions, a lithium mining technology company that increases lithium production from brine resources.

Mangrove has seven employees and a pilot plant that is operating in Vancouver and will use Breakthrough’s money to build an industrial-scale commercial plant. Dara says the company aims to have paying customers by the end of 2022.

The lesser of two evils

Mangrove’s value proposition is a poignant reminder that even a laudable goal, like phasing out fuel-guzzling vehicles to meet global emissions reduction targets, can have unintended consequences.

This is because the extraction of lithium uses a ton of energy and water, and can ravage the earth.

“The lowest impact is probably still reached if you think about the transport of having [electric vehicles] compared to gasoline vehicles, although there is a negative impact on lithium extraction, ”Hayton told CNBC. “So there is the question of trying to minimize the amount of extraction that you do. And I think it’s important. And then also, minimize the impact of this mining operation. “

Another potential solution is to increase lithium recycling.

“But even if you were just recycling materials all day, we still don’t have enough stock of materials for the vehicles we need. So there has to be mining,” Hayton said.

To have the least impact on lithium extraction, you need to maximize the efficiency of lithium production, said Hayton.

“Anyone who improves that lithium yield from 50% to 90% is absolutely huge,” said Hayton, adding that Mangrove had a certain advantage because the company has been around for a while.

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