Lithium revolution and Turkey’s potential in energy sector

The importance of lithium, sometimes referred to as “the oil of the future” or “white gold”, continues to grow with developing technologies. In particular, the growing interest in electric cars and autonomous robots in recent years has further highlighted the value of lithium as the primary substance of the energy storage units that these machines require.

Eti Maden, which converts boron ore from Turkey to lithium, opened its Lithium Carbonate Production Plant at the end of December 2020. The pilot plant, built as a result of entirely domestic research and development (RD) activities and intended to produce lithium from liquid waste generated during the processing of refined boron, would generate 10 tons of annual output at the initial stage of its operation. When fully operated, the plant is expected to meet half of Turkey’s total lithium requirements, producing 600 tons of lithium per year. The Ministry of Energy and Natural Resources of Turkey notes that this lithium production method is the first in the world to be used exclusively by Eti Maden. The construction contract for Turkey’s first lithium-ion battery production facility was signed in Kayseri in August 2020 and it was announced that the necessary preparations had begun.

- Positive impact of domestic lithium production on Turkish economy

Boron deposits in Turkey (which contains 73% of the world’s boron reserves) are found in Balikesir’s Bigadic, Kütahya’s Emet and Eskisehir’s Kirka districts, and these deposits contain unique quantities of lithium. However, this lithium contained in boron waste has not been used because the conventional processing method was not economical. As a result of the RD activities carried out by Eti Maden over the last three years, the production of lithium from liquid waste generated during refined boron production will begin. Lithium carbonate and marketable boron products will be produced using this process, which separates lithium and boron from each other in waste products. In recent years, Eti Maden has achieved significant successes in the cleaning products market by producing cleaning materials from boron products.

When the Eti Maden Lithium Production Plant starts to operate at full capacity, imports of lithium, costing $20 million annually, will stop. Turkey raised its installed capacity of boron products from 730 thousand tons in 2002 to 2 million and 753 thousand tons in 2020.

The production of lithium in Turkey can actually become a seminal step towards a breakthrough in all smart device batteries, first and foremost those for electric vehicles, portable electronic devices, small domestic appliances, tablets, and phones. On the one hand, the proliferation of electric vehicles, and on the other, the environmentalist policies that should be implemented due to climate change and the restrictions that prescribe the reduction of carbon emissions are expected to increase the demand for lithium, which is a storable and more environmentally friendly source of energy, both in Turkey and globally.

Turkey currently meets all its lithium needs through imports, and the plants opened in Eskisehir beginning to operate at full capacity would mean that half of Turkey’s lithium needs will be met domestically.

As lithium is planned to be extracted from existing waste products in these plants, which have been built with a renewable and recycling-focused approach to production, the need for storage space will decrease, saving a total of $1.3 million annually on the cost of waste storage. In addition, it is expected that 440 thousand cubic meters of liquid will be treated and recycled up to 90% annually by this method. Having clean water from waste would be another advantage of this investment.

Producing lithium from boron waste is expected to offer several advantages to Turkey. Among the benefits of lithium production at the initial stage are the creation of a new area of employment, an increase in the domestic rate of the devices that are produced in Turkey that use lithium, a decrease in the cost of importing lithium, the achievement of the production technology of the most valuable metal of the future, and the fact that this achievement would eliminate many barriers standing in the way of Turkey, thereby strengthening its hand in innovative international competitiveness. In addition, according to European media outlets, electric vehicles (EV) produced in Turkey powered by domestic batteries will give Turkey’s EV a major price advantage.

- Developments in EU regarding lithium

While cobalt, natural graphite and silicone, all of which are used in battery manufacturing, were included in the EU’s Critical Raw Materials (CRMs) list in 2017, lithium has also been added to the list updated in September 2020. The reports written and warnings made regarding the key role that lithium will play for the EU in the near future, and by extension, regarding the need for a continuous flow of lithium supply, which must be ensured for zero-emission mobility, are thought to have had an effect on this update. “Zero-emission mobility” is described as individuals traveling with zero carbon emissions, or the least possible amount of emissions. In this context, short distances must be traveled on foot or by bike, and if motor vehicles are to be used, carbon-free EVs must be preferred.

When evaluated together with the vision of the ‘European Green Deal’, which aims to achieve, by 2050, economic growth independent of resource usage and zero net greenhouse gas emissions, and plans to improve human health and quality of life while caring for nature and leaving no one behind, we see that the steps taken on lithium in the EU are one of the phases of the Green Deal, while these steps and the deal complement each other. According to Ursula von der Leyen, the president of the European Commission, the Green Deal will not only improve the quality of life and the environment, but it will also make businesses more innovative.

In addition, the EU launched the European Battery Alliance in 2017. The purpose of this alliance was declared to be providing low-emission mobility, as well as increasing the energy storage capacity of the union and boosting battery technology and production capacity, which are critical steps for the economic strategy of Europe. When the alliance was established in 2017, there was almost no battery cell production in Europe, with the EU’s share accounting for only 3% of the global market, leaving the EU dependent on suppliers. The European Battery Alliance aims to ensure that the battery production within the EU covers domestic demand until 2025. The alliance has attracted the industrial participation of 440 actors and secured commitments of nearly €100 billion so far. The EU is planning to create an integrated value-chain across the continent, from the processing of raw materials required for battery cells to production and recycling, and published its Strategic Action Plan for Batteries for that purpose on May 17, 2018.

- What’s happening with lithium in the world?

Countries taking action on lithium and battery production generally emphasize sustainability and a circular economy. Clean energy, low-emission mobility, increased energy storage capacities and maintaining production levels with minimum amounts of waste are defined as key components of this whole. Germany provides nearly €3 billion of funding for battery-related ventures. In the near future, Europe plans to produce the most innovative and environmentally friendly battery cells in the sector and to generate tens of thousands of new jobs along the value chain.

Although the lithium reserves in Portugal, Czech Republic, and Scandinavia are rich, the lithium extracted in Europe is sent to China for processing because Europe lacks the facilities necessary for lithium refinement. When the European Battery Alliance was established, Europe was five years behind Asia in the field of battery production. However, Europe has started to close this gap, with its acceleration efforts in this regard going back to 2017.

When it comes to the most important raw material of the future, lithium, China has not been standing idle, either. China is buying lithium companies in South America, where half of the global lithium reserves are located, while also strengthening its position in the market by creating the Union of Mining Companies with companies in lithium-rich countries. In addition to guaranteeing its raw material resources, China is also increasing its battery production capacity. At the moment, a range of Chinese companies are seeking to become the biggest battery manufacturers in the world. China, which had 50% of the world’s lithium-ion battery production capacity in 2013, started managing 60% of it in 2018.

If we pay attention to the technological and environmental trends, battery manufacturing and the lithium required for it are rapidly moving towards becoming very strategic products, essential for an independent industry. Similar to how oil was used as a strategic weapon with embargoes and supply and pricing policies in the past, lithium can most certainly be weaponized in a similar manner because it will have to be used in many fields, from the production of automobiles to autonomous robots and machines, in the future as well. Considering all of these developments, we can see that Turkey has made the right investments at the right time. Joining the race to compete in one of the most critical markets of the future in a timely manner and creating the capacity to manufacture high-tech products in a clean and sustainable manner are visionary moves that will propel Turkey forward.

By Prof. Elif Nuroglu

- The writer is the chair of the Economics Department at the Turkish-German University (TAÜ). Her research focuses on international economics, gravity model, empirical international trade, econometric modeling, empirical macroeconomics, artificial neural networks, and fuzzy logic approaches.