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Business News/ Technology / Biden’s Electric-Vehicle Push Hits a Speed Bump
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Biden’s Electric-Vehicle Push Hits a Speed Bump


Mining projects are being delayed after a plunge in prices for metals used in batteries.

Separation ponds at an Albemarle lithium mine in Chile. After discovery of a metal, it often takes years before mining companies begin production. Premium
Separation ponds at an Albemarle lithium mine in Chile. After discovery of a metal, it often takes years before mining companies begin production.

America’s transition to electric vehicles is running into an unexpected snarl.

A surprising crash in prices for lithium, cobalt and other metals used in EV batteries is hitting mining companies, which are suspending or delaying new projects and expansions. The disruptions are threatening to deepen shortages of those materials in coming years and hit the brakes on the Biden administration’s timeline for weaning the country off gas-powered cars.

“This situation is a bit dangerous because the mines aren’t going to get built," said Anthony Milewski, chief executive of nickel producer Nickel 28, who is a longtime investor in battery metals. “We should be building those mines now and we’re not."

Battery-grade lithium prices are down more than 60% this year, while nickel, graphite and cobalt have lost about 30%, according to Benchmark Mineral Intelligence. A big factor behind the declines: a weaker-than-expected economic recovery after Covid-19 lockdowns in China, the world’s largest consumer of metals.

The sliding prices mark a turnaround from when carmakers rolled out ambitious plans to switch their fleets to EVs and metal prices rocketed higher in what many analysts believed would be a yearslong supercycle.

The enthusiasm reflected the huge potential for growth: Electric vehicles accounted for 8% of U.S. auto sales in the third quarter, according to Cox Automotive. The Biden administration has said it wants half of all new vehicle sales to be electric by 2030. This year’s plunge in metal prices shows getting there won’t be a smooth ride.

Mines can take years between discovery of a metal and production, meaning the slowdowns could result in material shortages in coming years and leave carmakers scrambling for scarce supplies.

Already, mining projects have struggled to gain traction after facing local opposition, environmental concerns, red tape and other obstacles.

Livent, a Philadelphia-based lithium producer, recently posted disappointing quarterly earnings and said it was delaying an Argentine project expansion after facing construction challenges. Chief Executive Paul Graves said lithium projects around the world are being challenged by low prices.

“We continue to see production-expansion delays globally," he said on an earnings call.

Albemarle, the world’s largest lithium miner, also raised concerns that supplies won’t meet demand toward the end of the decade because mining companies don’t have the incentive to start projects. Earlier this year, Jervois Global suspended operations at its Idaho cobalt mine after prices for the metal collapsed.

For now, lithium supply and demand are relatively balanced. But by 2030, demand for the metal is expected to more than triple to 3.1 million metric tons and outpace supply by nearly 400,000 tons, according to Benchmark estimates. Cobalt and nickel are also expected to be in short supply.

Not all mining companies are worried about falling prices, given the volatile nature of commodity prices. Surging prices a couple of years ago caused producers to flood the market with supply, leading to a short-term glut in some materials that subsequently pushed prices down.

Jonathan Evans, CEO of Lithium Americas, which is developing a lithium mine in Nevada with GM’s backing, said he expects prices to rebound as demand inevitably increases. “If you think the world’s going to stay in its current state, that’s not going to happen," he said.

The Biden administration is working to ease pressures, too. It recently announced up to $3.5 billion would be available from the 2021 infrastructure law to boost production of batteries and battery materials. Evans said Lithium Americas is in talks for a low-rate loan from the Energy Department, which has a program that helps clean-energy companies avoid the higher rates banks might charge.

Other companies are also forging ahead. Exxon Mobil said last week it started to drill for lithium in Arkansas, a project seen as a long-term bet on EV demand. The Texas oil giant said it plans to start producing battery-grade lithium by 2027.

Milewski, Nickel 28’s CEO, said the steep fall in metal prices could also spark another phase of the boom-bust cycle. Falling prices can make EVs more affordable, which in turn could boost demand for batteries—and drive metal prices higher again.

“Low prices are a cure for low prices," Milewski said.

Write to Scott Patterson at

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