Mines extract raw materials; for batteries, these raw materials typically contain lithium, cobalt, manganese, nickel, and graphite.
The “upstream” portion of the EV battery supply chain, which refers to the extraction of the minerals needed to build batteries, has garnered considerable attention, and for good reason.
Many worry that we won’t extract these minerals quickly enough to meet rising demand, which could lead to rising prices for consumers and slow EV adoption. There’s also concern that the US is missing out on economic opportunities, new jobs, and a chance to strengthen the supply chain.
More importantly, mining is routinely associated with human rights abuses and environmental degradation. Certain mines have used or are using child and/or forced labor to extract the minerals used in EV batteries; there are also many documented cases showing the devastating effects of mining on local communities and environments.
Across the world, there is particular concern about the negative impacts of new extractive developments on Indigenous communities. In the United States, the majority of nickel, copper, lithium, and cobalt reserves lie within 35 miles of Indian Country.
Below we explain the steps involved in the upstream portion of the EV battery supply chain, answer five questions about the challenges facing the mining industry, and describe what’s being done to address the industry’s negative impacts.
In the upstream portion of the supply chain, mines extract raw materials; for batteries, these raw materials typically contain lithium, cobalt, manganese, nickel, and graphite.
Because of the energy required to extract and refine these battery minerals, EV production generally emits more greenhouse gases per car than cars powered by fossil fuels. However, the average EV makes up for this difference in less than two years. Over a typical vehicle’s lifetime, EVs produce significantly less emissions than traditional vehicles, making them an essential tool to combat climate change.
Lithium-ion batteries, the kind that power almost all EVs, use five “critical minerals”: lithium, nickel, cobalt, manganese, and graphite.
The Energy Act of 2020 defines critical minerals as a “non-fuel mineral or mineral material essential to the economic or national security of the U.S. and which has a supply chain vulnerable to disruption.” There are around 35 minerals categorized as critical.
Critical minerals are found across the world, but most economically viable deposits are found in only a few places. For instance, much of the world’s cobalt is located in the Democratic Republic of the Congo while lithium is concentrated in South America and Australia. As a result of this geographic diversity, the supply chain for electric vehicles is truly global.
Yes. While demand for these minerals is already high and expected to grow significantly in the coming years, there are enough minerals to meet today and tomorrow’s EV needs.
The problem is that the upstream portion of the supply chain is unprepared to meet this demand. Today, although there are enough minerals, there are not enough operating mines.
Since it can take years to establish a mine, we need to move very quickly to ensure that supply can meet growing demand while also respecting the expressed needs of local communities. This work will require significant investment to do so: in the United States alone, we’ll need to invest $175 billion in the next two or three years to match China’s battery production.
Today’s mining practices can involve:
Child and/or forced labor: According to the International Labor Organization, more than 1 million children are engaged in child labor in mines and quarries; many receive little to no pay. These practices are a form of modern slavery.
Tailings storage are another form of mine waste that harms local environments and residents. Once a mineral has been extracted from the ore, the rest of the ore is disposed of. These leftovers are called tailings and are usually dumped in above-ground ponds held together by humanmade dams. When these dams collapse, they can cause deadly mudslides that destroy farmlands and nearby towns. Collapses can also pollute bodies of water that local communities rely on for food, agriculture, and income. Since 1915, more than 250 tailings dam failures have been recorded around the world, killing 2,650 people. In 2019, a single dam failure at a mine in Brazil claimed the lives of 270 people in a tragic instant.
Water pollution and depletion: Drilling and excavation can contaminate surface water and groundwater reserves. As Earthworks notes, many mines in the US have historically failed to control their wastewater, which has led to polluted drinking water, harm to local habitats and agriculture, and negative public health impacts. Globally, mines dump more than 200 million tons of mining waste directly into lakes, rivers, and oceans every year. Mining also requires huge amounts of water; more than 2 million liters of water are needed to produce one ton of lithium. Because mining often occurs in arid and semi-arid regions, this can seriously stress local water supplies for communities and ecosystems.
Gender discrimination across the mining industry: Despite women’s significant contributions to mining, their work has been less valued and less protected than that of men, according to the International Labour Organization, which also notes that in large-scale mining operations, women rarely make up more than 10 percent of mineworkers. In many countries women are expressly prohibited by law from holding certain positions at mines.
There are many factors that contribute to human rights abuses and environmental degradation, including:
Some mineral reserves are in conflict-affected and high-risk areas: Many of today’s operating mines are in regions labeled as a conflict-affected and high-risk area (CAHRA), which the Organisation for Economic Cooperation and Development defines as places “identified by the presence of armed conflict, widespread violence, or other risks of harm to people.” The presence of civil and international wars, insurgencies, political instability and repression, and corruption are some examples of factors that determine whether an area is considered conflict-affected or high risk. At the time of this writing, the European Union has identified 28 countries with CAHRAs.
Economic dependence on artisanal and small-scale mining (ASM): Unlike large-scale mining, ASMs are operated by individuals, families, and/or groups and are often informal and completely unregulated, which leads to little to no health, safety, or environmental protections. They do not always use modern equipment; some rely on tools like shovels and pickaxes. As the European Union notes, in some cases, ASMs are controlled by armed groups, who use the extracted resources to finance conflicts.
Outdated mining laws: Current US laws governing mining do not address the complex challenges facing the sector. For instance, the General Mining Law of 1872 remains the most prominent mining regulation today in the United States. Governing the extraction of critical minerals on federal lands, it has not been meaningfully updated since President Ulysses S. Grant signed it more than 150 years ago to promote westward expansion. It does not require mining companies to pay federal royalties to taxpayers and includes no environmental protection provisions. Laws such as these do not reflect the complexities of today’s mining practices; it’s especially important that they require free, prior, and informed consent of Tribal nations, who often bear the brunt of mining’s negative impacts.
A lack of tools to monitor mining practices: Without good governance or transparency from organizations, there’s no way to definitively know how most mines treat their workers or affect the surrounding environment. Journalists have been largely responsible for uncovering human rights abuses and environmental degradation. We often rely on assurances from mining companies, which often prove to be inaccurate or incomplete. That’s why we need third-party tools to monitor mining practices: we must have data from trusted sources to meaningfully address destructive operations and hold bad actors accountable while continuously requiring responsible practices.
Activists, advocates, policymakers, employers, governments, and others are working to integrate environmental justice in the EV battery supply chain by:
Onshoring/reshoring/friend shoring efforts: Though far from a complete solution, investing in EV supply chain capacity within the United States and its allies will help diversify supply and limit exposure to human rights abuses and detrimental environmental impacts. When upstream supply is concentrated in a few countries, downstream purchasers have little leverage over their suppliers’ human rights and environmental practices. In general, the United States and its allies have strong oversight over human rights concerns and high-quality environmental protections, although there is always room for improvement. The goal here is not self-reliance, however, but rather greater diversity and competition, helping put pressure on all countries to adhere to improved standards.
Leading efforts to update legislation: At the time of this writing, the Biden administration is convening an Interagency Working Group on Mining Regulations, Laws, and Permitting, which will provide recommendations to Congress on how to reform mining law to include provisions that protect the environment, involve local communities, and reduce the time, cost, and risk of mine permitting. Likewise, the Initiative for Responsible Mining Assurance (IRMA), has provided recommendations to the Department of State’s Clean Energy Resources Advisory Committee regarding what should be included in these updates. The US Department of State’s Minerals Security Partnership has also recently announced principles marking a public commitment to full integration of environmental, social, and governance standards into its work.
Improving EV supply chain transparency: “Battery passports” can help manufacturers certify where battery minerals are sourced and verify that these sources are following globally recognized ethical practices.
Convening stakeholders to drive action. IRMA brings together industry, affected communities, governments, and others to provide an independent third-party verification and certification against a comprehensive standard for all mined materials that provides “one-stop coverage” of the full range of issues related to the impacts of industrial-scale mines.
Automakers are also making commitments to ensure that materials are ethically sourced. For instance, Ford requests that suppliers source raw mined materials from entities committed to and/or certified by IRMA.
Although the upstream portion of the EV battery supply chain faces many challenges, we can address them with investment, improved laws and regulations, and public awareness. These steps will help ensure that we have the batteries we need for an electrified transportation future without harming people or the planet.
A supply chain transforms raw materials and components into a finished product that’s delivered to a customer. It is made up of a complex network of organizations and activities, such as raw materials suppliers, manufacturers, distributors, retailers and the customer.
Supply chain management is the orchestration between these networks comprising procurement, management and storage of raw materials and manufacturing, as well as the moving, delivery, and storing of finished goods and after-market services to create maximum efficiency, lower cost and net value.
Supply chains: From linear to network
To understand the importance of supply chains management, it’s worth first thinking about the importance of a supply chain at its most basic level.
Traditional supply chains follow a linear progression. The output of one step is typically the input of the next step. For instance, suppliers must send raw materials to the manufacturer before the products can be made. If there’s a problem at any step, the entire linear chain is disrupted.
Today’s supply chains, however, are more complex than linear models—they’re sophisticated supply networks that are more flexible and efficient. This helps meet customer expectations for a wide selection of customized, sustainable products and fast deliveries that meet individuals’ specific needs.