Australia’s lithium extractivism is costing the earth

Claire Burgess

AUSTRALIA’S LITHIUM EXTRACTIVISM IS COSTING THE EARTH

Claire Burgess

This is written by the earth, with support of kin who seek to remain anonymous, this work is to be dedicated to the frontlines and to non-human kin seeking to thrive against the odds.

‘WHITE GOLD’ AND CLEAN ENERGY

Lithium is a soft and silvery mineral that has been declared a critical mineral in the US, Japan, EU and Australia. Due to its use in batteries, lithium has been dubbed by those eager to invest in low carbon technologies as the ‘white gold’ of future energy markets. Lithium-ion batteries are used in electric vehicles (EVs) and backup storage for renewable energy grids. Depending on the battery composition and size, an EV battery contains between 8–12 kg of lithium. It is projected that by 2030, 74% of lithium demand will come from battery demands for electrification of transport. To meet the initial commitments for a 2 °C scenario by 2050, it is estimated that 53% of global deposits will be depleted.

Mining companies, investors and upstream manufacturers are capitalising on these emerging climate commodity markets — supported by a number of countries as a matter of national security. Countries are altering their policy landscapes to diversify from and compete with China for supplies and onshore manufacturing of battery-grade lithium and other ‘battery metals’. In Australia’s case, new partnerships are being formulated, representing a deliberate shift in trade relations away from China — which, in the case of lithium, means diversifying Australia’s exports of spodumene and refined metals. As a result the lithium market is widely fluctuating. Lithium prices rose by 500% through 2021 and early 2022. Whereas recently the price has dropped with reports of demand speculation and supply dynamics.

The complex array of challenges in securing the large amounts of lithium to reach the electrification goals, and within the context of continued trajectories of material-based consumer growth, are significant. Top energy technology companies have reported that securing lithium supply was an urgent security concern. Understandably, this is raising concerns for human rights and environmental groups, particularly in the regions where lithium reserves are located.

Australian-listed mining companies dominate the lithium extraction market and are scattered across the globe. Lithium is concentrated in the most significant quantities in China, Australia, Argentina, Chile and in smaller quantities elsewhere. Second to China, Australia has one of the world’s largest reserves of lithium. Domestically, just five Australian projects accounted for 55% of global extraction in 2021. This is in addition to the expansion of operations in regions such as the so-called ‘lithium triangle’ of Chile, Bolivia and Argentina, where an estimated 80% of global reserves are contained. The US, Canada, Europe and the African continent are seeing a plethora of new lithium projects from Australian companies.

This race to secure lithium is generating environmental and social impacts across the various hotspots often in sensitive ecosystems and upon vulnerable communities, which can be understood as the creation of green sacrifice zones.

Global Lithium Production and Reserves 2020. Source: U.S Geological Survey.

GREEN SACRIFICE ZONES: THE COSTS OF THE LITHIUM RUSH

Mining for lithium involves different types of approaches which each have impacts on environments and communities. To date, conventional means of extracting lithium have been either from hard rock mineral (spodumene) from pegmatite deposits, or from brine in salt lakes. According to analyst Fitch Solutions, 65% of global commercial lithium output in 2021 was from spodumene — mainly in Australia — and 35% from brines (Latin America and China). However, battery demand is sparking a host of projects developing new extraction techniques, namely sedimentary (clay) deposits and geothermal brines.

Brine in salt lakes — The ‘Lithium Triangle’ across Argentina, Bolivia, and Chile accounts for 55% of the global deposits of brine salt lithium and is poised to be the largest exporter of lithium well into the future, despite concerns associated with water depletion and Indigenous rights. The process of extraction involves drilling below the ground surface with large rigs, pumping up the brine, and cycling it through a series of evaporation ponds. An energy intensive process, lithium mining of salt lakes currently predominantly relies on fossil fuels. One tonne of lithium carbonate requires over 500,000 gallons (two million litres) of water. In Chile’s Salar de Atacama, where an estimated 30% of the world’s lithium reserves are located, over 1,700 litres of brine are sucked out of the ground every second. Available water has been reduced by 65% due to mining. This has been associated with ecological impacts, including a decline in populations of flamingos — a key species. Collapsing water tables have caused local water supplies to dry out, making livelihoods unsustainable and impacting on Indigenous cultural practices.

Mined areas are reported to be scarred with mountains of discarded salt and contaminated waste ponds. Similar impacts have been noted in Argentina’s salt flat regions, where decades of lithium mining has also caused irreversible air and soil contamination, sparking local lawsuits and protests against companies. As in Chile’s Atacama, Argentina’s salt flats are in the grip of a significant expansion of mining development, aided by supply chain investments by major EV manufacturers such as Tesla and BMW.

Hard rock (spodumene) — Australia accounts for roughly 80% of the global lithium supply from hard rock pegmatite (spodumene) mineral deposits. The process of extraction via these methods is economically costly and highly destructive, involving energy intensive roasting that predominantly relies on fossil fuels, akin to fracking, coal mining or oil drilling. It involves drilling deep into the earth and the use of explosives to break up rock, followed by roasting the rock at high heat, crushing, and sulphuric acid leaching. These methods are energy, carbon and water-intensive, producing enormous amounts of waste — lithium extraction in Australia produces 94% waste rock. Refining is the most environmentally damaging stage of the process, due to the risk of chemical contamination.

Clay — Due to the uneven geographic distribution of lithium resources and associated concerns with securing access, exploitation of clay-based lithium resources have received increasing attention. A flurry of new exploration is arising in lithium-bearing clay deposits on the Oregon-Nevada border and Southwestern China. Calcination and acid leaching processes have been required to extract lithium for clay rocks. Several Australian mining companies are seeking to mine clay deposits across the globe, including the US and Serbia, with significant social and environmental implications. Impacts are due to the deposits often lying in vulnerable arid land ecosystems, farmlands and, in the case of Oregon and Nevada, overlapping with First Nations lands and sacred sites (see case studies below). Lithium extractivism of this type is emerging as requiring huge amounts of groundwater, potentially resulting in long term contamination and large quantities of waste.

Geothermal — Companies are increasingly interested in naturally occurring geothermal liquids which have been identified as a source of lithium that is ‘non-polluting’. Geothermal extraction is being presented as ‘Net Zero Lithium’ and a cleaner alternative to hard rock mining and fossil fuel dependent operations. The process requires drilling 2–3 kilometres into the earth and pumping hot geothermal brine to the surface. At 1–2 metres an hour, this would take 124 twelve-hour days of drilling with no assurance regarding whether the drilling will find geothermal aquifers. While they attempt to address the incredibly mineral and fossil fuel intensive nature of “clean” energy technologies, geothermal technologies present serious risks, including that of causing earthquakes. An Australian-owned company is exploring this method in Germany (see below for more information).

AUSTRALIA’S ENABLING LITHIUM MINING CONTEXT

The Federal Government has enacted major policy changes over the past several years to make Australia a ‘global critical minerals powerhouse’. Lithium is at the forefront of this ambition, due to the burgeoning hype for the mineral related to clean energy. Australia’s domestic market and its listed companies hold a dominant position across the various types of extraction. Lithium exports from mines in Australia increased from 39,700 tonnes to 55,000 in 2020. Australia hosts some of the world’s largest lithium operations in terms of production.

The Federal Department of Industry’s 2022 Critical Minerals Strategy provides policy support to lithium projects deemed to be of strategic importance to the Australian economy and significant for global clean energy supply chains. This has involved budget allocations favouring ‘integrated’ projects that support extraction, processing, and refining elements of the supply chain. For example, in Western Australia — the key mining state — a Future Battery Industry Strategy and research hub seeks to expand exploration and build manufacturing capacities for onshore processing. Several government research grants have also been awarded to key ‘integrated’ supply chain-focused companies like Lithium Australia for capturing new economic opportunities.

Australia’s economic policy context is supporting an expansion of onshore and international lithium projects. This is entwined with a change in the landscape of Australia’s cooperative trade agreements with other countries. The Quadrilateral Security Dialogue (Quad) alliance between Australia, India, Japan and the US, ratified in 2021, is prioritising securing future supply chains of key battery metals, including lithium. In March 2022, Australia signed a Memorandum of Understanding with India’s Ministry of Mines to identify new lithium and cobalt resources and strengthen the supply chain between the two countries in these metals. In addition, battery technology companies are forming alliances with mining companies, including offtake agreements with overseas car manufacturing firms, such as EV Metals Group’s Strategic Lithium Alliance. This is playing a role in the expanding footprint of Australia’s domestic lithium mining context.

AUSTRALIAN DOMESTIC LITHIUM EXTRACTION FOOTPRINT

Australia’s lithium mining footprint is rapidly expanding across the country, beyond the traditional areas of extraction. Based on mapping of the existing projects, a total of 25 companies are currently undertaking a combined 37 active lithium mining operation areas. Of those, 30 pertain to exploration areas which in most cases consist of multiple concession holdings per project. Ten lithium projects are included on Austrade’s 2020 Critical Minerals Projects List. Of these, four are operating, three are in construction, and three are at exploration or feasibility stages. One project has been granted Major Project Status (MPS) by the Federal Government: Core Lithium’s much-hyped Finniss mine in the Northern Territory (see case study). A lithium refinery in WA has also been given MPS status. An MPS designation allows companies to accelerate approval processes and avoid particular laws and regulations.

Significant social, cultural, and environmental impacts are occurring across 7 project areas that have publicly available information. The common concerns across the projects pertained to livelihoods (farming, tourism, local economic activities), water access and water contamination, natural environment impacts including native vegetation clearing and contamination. Regarding Indigenous rights, impacts related to cultural heritage, inadequate consultation, failure to respect the right to say no to projects on Indigenous lands, failure to respect Indigenous local economies was another key concern. In three projects concerns regarding vulnerable species habitats and one project had significant concerns associated with contamination and environmental impacts from waste disposal. The details of this are described below.

Most major project expansions are happening in Western Australia, in areas already impacted by decades of grand-scale metals mining, such as the Western Pilbara and the Kalgoorlie-Goldfields region. Liontown Resources proposed an open pit that was set to impact on a culturally significant water body and the company agreed to an underwater alternative after negotiations with local TO’s. Cultural heritage and water rights are key concerns in this region. The Pilbara region’s history is fraught with violations against Indigenous communities, ranging from dispossession and exclusion to cultural heritage destruction (for example Juukan Gorge, where Rio Tinto infamously destroyed a sacred site in 2020). Without careful consideration, a mining boom in this region is likely to reproduce past conditions of inequality and ecological damage.

Greenbushes, near Perth, is the world’s largest hard rock lithium deposit and project. The operation is run by Tailson Resources, a joint venture comprising Chinese-based Tianqui Lithium Corporation and US-based Albermarle Corporation.

In 2019, a grassroots collective, the Dardanup Environmental Action Group, launched a community opposition in relation to expansions and increased needs for waste disposal near the town of Dardanup. Concerns from the community regarded the removal of native vegetation, groundwater contamination, and threats to livelihoods associated with prime farmland and tourism in and around the Ferguson Valley. A community member was quoted in the media as saying: “We don’t benefit from the lithium boom, we just end up with this toxic scar on the landscape”.

No Tailings! Image source: Sydney Morning Herald.

This area also contains a sacred site of the First Nations Noongar people — the Blackwood River and its tributaries. In anticipation of expansions of ore extraction around Greenbushes, a new refinery at the industrial port of Kwinana, near Perth, was opened in 2021.

Another grand-scale lithium project intending to expand further is Pilbara Minerals’ Pilgangoora. Pilbara Minerals, which ships ore from Port Hedland, sold spodumene to China for record prices in 2021. In 2017, three billion litres of diesel fuel were imported into the Pilbara each year, primarily for powering the transportation operations of the mining industry. Woodside’s new Scarborough gas project seeks to contribute to reducing the mining industry’s emissions, yet the project is equivalent to building 15 new coal power stations.

Just northwest of Perth, community members in the small township of Toodyay are concerned about the impact of a proposed nickel, copper, rare earths and lithium mine on a nature reserve. The 26km mineral deposit has been branded as a ‘world class green metals’ project, and Chalice Minerals’s 2600-hectare concession covers both farmland and the Julimar State Forest, a nature reserve well known for recreation and tourism. A grassroots community network, the Avon Hills and Mining Awareness Group, are concerned about the project on grounds of its impacts to the environment and wildlife, local businesses, agricultural production, and Indigenous cultural heritage sites. Community concerns, including appeals and a petition, have delayed the project’s drilling permit application.

Outside of Western Australia, problematic projects are in the pipeline for a flood plain in the Northern Territory and a biodiverse area in Cape York, Queensland (see case study). In Victoria, Kangaroo island has been flagged as a potential lithium pegmatite resource, and is being explored by Lithium Australia; mining here will impact on the island’s rich wildlife and tourism industry. Lithium exploration is also occurring in northeast Victoria and northeast Tasmania. Drilling activities in Tasmania have attracted concerns from local environmental and tourism groups.

Across Australia, the identified socio-environmental issues of lithium expansion include: further intensification of resource industries in areas already vulnerable to over-use of water by existing mines (for example, in the Goldfields and Pilbara regions of Western Australia); water contamination risks with hard-rock lithium mining; threats to biodiversity, lack of right to say no, and aggressive tactics in regard to consultation and Native Title claims with traditional owners.

Below are two case studies which exemplify a number of these risks and impacts.

DOMESTIC CASE STUDIES

1. Cape York, Indigenous land rights and the lithium rush

An increase in lithium mining exploration permits from an increasingly dominant player in the global lithium market, Lithium Australia, are concerning Traditional land holder groups of the Cape York Peninsula, Northern Queensland. Communities who are located in around 4 million hectares of lands that have been ‘handed back’ to First Nations for management. But around half of this land is classified ‘freehold’, meaning that Traditional Owners have no decision-making rights in the issuance of mining permits. In recent years, seventy-one mining exploration permits have been granted in the region. There are concerns that the race to secure lithium in Cape York will continue to expand, with government departments and industries exploiting loopholes in the law to force Traditional Owners to come into ‘voluntary arrangements’ for concession of their land for mining.

The Olkola Aboriginal Corporation, who own and manage around 1 million hectares on the Cape, have plans for alternative futures to the use of their lands for lithium ‘green’ extractivism. These include the protection of core habitat for the endangered golden-shouldered parrot, or Alwal, which is an Olkola totem animal — as well as many other endangered species and vulnerable wetlands in the Aboriginal-managed Olkola National Park. Traditional groups are mobilising to demand an overhaul of the Native Title Act 1993, and legal battles are underway.

2. Core Lithium’s Finniss Project, Northern Territory

Core Lithium’s Finniss Project is an open pit spodumene mine and concentrator plant being developed on Cox Peninsula, south of Darwin Port — an area covered in lithium exploration tenements owned by various companies. Project development began in October 2021. The mine will have an initial life of only 4–7 years, though the company is exploring surrounding deposits to extend this. Despite its short-term nature, Finnis has gained attention from government and investors: it was granted Major Project Status in 2021, giving it access to federal government funding and streamlining, while in March 2022, an offtake agreement was signed with Tesla.

The project necessitates the installation of significant infrastructure — including a water supply dam, sediment ponds, waste rock landforms, a storage and maintenance area, internal access roads and drainage infrastructure. The NT Environment Centre (NTEC) has raised concerns, including impacts on groundwater in an area prone to cyclones, acid mine drainage, and a lack of company transparency about the mine’s closure and management plan. The NTEC, while stating the need for decarbonisation, acknowledges the risks associated with rushing projects without an adequate study of potential environmental impacts.

A May 2022 ABC report interviewed pastoralists concerned about lithium expansion by another company close to the Finniss site. Run-off has allegedly been observed around the Core Lithium site; local farmers also raised concerns about groundwater contamination in a high-rainfall region. There are also questions about regulation of water extraction, as the mining industry in the Northern Territory is exempt from requirements of the Water Act.

Core Lithium claims their negotiations with Traditional Owners of the Larrakia Nation where the six mining tenements are located are transparent and have followed due process. But there has been a recent dispute — in 2021, Kenbi Traditional Owners filed a lawsuit against the regional Native Title representative body over alleged mishandling of royalty agreements with the company. This was withdrawn in February 2022, a month before major works to develop the mine began.

Core Lithium’s Finniss project in March 2022. Image source: ABC News

AUSTRALIAN LITHIUM COMPANIES OVERSEAS — EXTRACTION FOOTPRINT

Australian companies are aggressively competing for lithium assets across the globe, with significant implications in South and North America, Europe and Africa. This section will detail the emerging context in each continent and delve into a number of case studies to illustrate emerging issues across each region. The remaining Asia-Pacific context will be presented before delving into the other regional continents.

ASIA-PACIFIC REGION (not including Australia)

Significant deposits and a well-established lithium mining industry exists in China. However, Australian companies are present and expanding in Thailand. Two companies are exploring in Thailand the main concerns for these projects relate to impacts on livelihoods (farming and tourism) as well as the impacts associated with clearing tropical forest areas particularly in Northern Thailand — which would particularly pertain to biodiversity. Contamination of waterways that are relied upon by local smallholders and village communities is another potential concern although limited information is available.

Thailand — Southeast Asia has supportive EV and battery policy, with a number of Australian domestic extraction companies seeking offtake agreements in various countries. At the extraction end of the supply chain, two ASX-listed companies are seeking operations in Thailand including Pan Asia Metals and Matsa Resources. Pan Asia Metals has three projects in the Mueang Mae Hong Son region, a mountainous province in northern Thailand which contains geothermal hot springs. Initially targeting projects in Myanmar, the company claims that the policy and licensing roadblocks in that country led to them seeking to capture lithium deposits in Thailand. They are pursuing three projects, one for geothermal and the other two for hard rock exploitation. Also in the same region, Matsa Resources has bought up 65 exploration concessions.

While there is little available information from community concerns regarding impacts, this area is known for its dominant mountain peaks that give birth to numerous streams, small rivers and forests. Numerous villages are located in this area with communities dependent on smallholder farming and tourism for their livelihoods.

A village household in Mueang Mae Hong Son region. Image Source: Web Archive.

SOUTH AMERICA

In South America, eight major Australian companies are exploring for lithium or expanding projects. All of these are operating in the so-called ‘lithium triangle’ which spans parts of Bolivia, Argentina and Chile. Latin Resources Ltd are in the lithium triangle as well as Brazil. Across these companies, there are 15 active projects as of early 2022, four of these being hard rock (in Brazil and central Argentina) and the remainder brine. Australian companies are operating and impacting on all three provinces across the lithium region that contain the great salt lakes where the brine is present. The key impacts in this region have been raised by Indigenous led groups who have led significant opposition since 2014. These include water depletion and contamination, disruption of ecosystems and key species, disrespect of Indigenous cultural practices, negative impacts on farming livelihoods in relation to soil and the failure to respect the right to say no.

Australia’s trade relationships with the key countries are significant to how land is accessed and project facilitation. Australia has two bilateral trade agreements with South American countries. These are with Chile and Peru — both focused heavily on mineral resources and the enabling of mining expansion. Chile is, to date, the world’s second largest lithium extracting country; however as the country undergoes a process of rewriting its constitution and potentially reorienting policies towards nationalising mining resources, Australian lithium investors are setting their sights on Argentina.

Map of the ‘Lithium Triangle’. Image source: The Economist

Argentina — Argentinian mining investment law and policy is more friendly to Australian investment than that of Chile and Bolivia, with allowance for duty-free equipment imports and fiscal adjustments including tax breaks and very low royalties. It also does not establish mechanisms for community consultation. Hence, all eight Australian lithium-focused companies in South America (including giants Rio Tinto and Allkem) are competing for resources here. They are crowded mainly in the three northern Argentinian provinces of Olaroz, Salta and Cajamarca, which hold 9% of the world’s total lithium reserves.

In December 2021, Rio Tinto agreed to acquire the Rincon brine extraction project in Salta Province for $US825 million. Meanwhile Allkem — created from a merger of Australian companies Orocobre and Galaxy Resources in 2021 — owns three large-scale projects: Olaroz and Cauchari in Jujuy Province, and Sal de Vida at Salar de Hombre Muerto in Catamarca Province.

Ten indigenous Atacameño communities are situated around the Salar de Olaroz, some directly within Allkem’s mining leases. The Olaroz project, which is being expanded to become what the company hopes to be one of the world’s largest evaporative lithium extraction operations, has been the epicentre of turmoil since extraction began in 2014. The company has applied socialisation tactics, offering jobs and dividing some community members against others who protest the impacts of mining activities on the water supply. Concerns have also been raised that in consultation stages the company did not pursue due process with regard to international conventions regarding free, prior and informed consent.