Lithium-ion batteries may be small and, for the most part, hidden within electrical devices, but they form a vital part of everyday life. Many of the technologies that we depend upon on a daily basis, including smartphones, tablets, and computers, would simply not function without them. Similar batteries are also being used in applications ranging from drones to medical devices to gardening equipment. (Eurasian Resources Group and First Cobalt Corp. supply cobalt to companies that use it in the production of lithium-ion batteries.)

The most important end-use of li-ion batteries is undoubtedly electric vehicles (EV). Global sales of electric cars rose by 43% year-over-year to more than 3 million in 2020, despite overall car sales slumping by a fifth during the pandemic. EVs are set to change the course of global carbon consumption, and as such, lithium-ion batteries will be a key enabler of the journey toward future sustainability.

In the coming decades, we will see demand for core battery materials such as lithium, cobalt, nickel, and graphite substantially increase, with the growth of the new energy vehicle (NEV) market a key factor in this trend.

Furthermore, environmental sustainability and NEVs are central to countries’ post-pandemic economic stimulus plans, as governments across Europe and Asia have introduced packages focused on green recovery. Key metals, mined responsibly, will be the bedrock of this global economic recovery. However, we must be mindful of several challenges in ramping up the supply of battery materials.

First, due to long lead times of new projects and the large amount of capital required, battery materials will likely see an increase in price over time. Technological advancements and economies of scale can help to lower mining costs in the long term, but since the most accessible raw material projects have already been commissioned, new deposits will cost more to develop in the near future.

Stronger supply chain security will also be key to the future of the battery industry. The Democratic Republic of Congo provides close to 70% of annual mined cobalt output and the vast majority of cobalt mined for battery materials. As such, the DRC is set to remain the main supplier of these metals.

However, when it comes to the battery materials processing sector, China’s dominance, which is estimated to have reached 80% of the industry this year, may well be challenged in the future.

Europe and North America have already started taking steps to attract battery cell manufacturers, and the next move will be supporting battery materials processing capacity. With this in mind, Western governments should reward domestic battery materials projects to level the playing field with China.

Strengthening value chain transparency, while supporting circularity and recycling efforts, will be crucial in ensuring an environmentally, socially, and economically viable value chain.

The aim going forward should be the acceleration of responsible sourcing and sustainability practices through solutions such as blockchain, which can be used to verify ESG compliance and the provenance of the materials. Addressing these goals is central to the Battery Passport, one of the Global Battery Alliance’s core initiatives that will provide transparency on a given battery’s sustainability and environmental impact. (ERG is a founding member of the Global Battery Alliance, which consists of major businesses, international organizations, and NGOs working together to facilitate a more sustainable battery supply chain.)

Over the next century, batteries will become ubiquitous. We can expect the Internet of things to become even more widely rolled out, including in remote locations, ensuring that all physical objects can successfully exchange data with other devices over the Internet. Batteries will be key in powering the sensors that communicate data, even beyond the reach of the electricity grid.

Robotics also presents many opportunities for the use of batteries, as automation becomes increasingly common and robots begin to replace humans for performing highly specific and often dangerous tasks in an efficient and safe manner.

Battery technology will continue to revolutionize the way we live as it takes a central role in enabling clean and renewable power, and increasingly shapes our energy storage strategies.

Michael Insulan is vice president of commercial at First Cobalt Corp.

Benedikt Sobotka is CEO of Eurasian Resources Group and co-chair of the Global Battery Alliance.