Lithium fields and evaporation ponds in the Atacama desert in Chile, South America. freedom_wanted/AdobeSock.com

Lithium, often referred to as ‘white gold’, is one of the most desirable minerals since it’ll fuel the energy transition that the US is now committed to achieving. ‘The element’s high electrochemical potential makes it a valuable component of high energy-density rechargeable lithium-ion batteries’, according to a report from the US Department of the Interior. Ernest Scheyder, author of The War Below: Lithium Copper and the Global Battle to Power Our Lives, has gone so far as to say that lithium is the ‘perfect anchor’ for lithium-ion batteries.

Indeed, figures published by the US Geological Survey show that today almost 90 per cent of lithium global production is used to manufacture batteries for electric vehicles or energy grid storage. According to the International Energy Agency (IEA), the demand for lithium could be forty times higher in 2040 than in 2020, and the existing mines and those currently under construction may only cover half of these needs.

Currently, lithium is mostly extracted in Australia and Chile and processed in China. Despite large potential resources – perhaps up to 14 million metric tons according to the US Geological Survey – the US hosts only one brine operation mine in Nevada. This, the Silver Peak mine, produces less than one per cent of global production. This situation therefore raises concerns for America’s security of supply.

The Biden administration has stepped up efforts to promote investment in US lithium production. Moreover, the country’s Department of Energy is funding lithium-based projects through the US Bipartisan Infrastructure Law. However, some potential lithium developers say the country’s environmental regulations are discouraging further mining development due to the complexity of the framework, which is composed of a multitude of requirements and participants, thus delaying the authorisation process.

A stringent framework

In the late 19th century mining was largely encouraged to support America’s economic development. The General Mining Law of 1872, under which the mining of lithium is governed on federal lands, is a living legacy of this period. Under this law, anyone can claim free access to exploration and development of ‘valuable’ minerals found on federal public lands. Holders of these mining claims for minerals such as lithium don’t pay royalties to the federal government.

While the law doesn’t include any environmental considerations, regulations enacted subsequently require major mining projects to receive various permits and approvals under environmental protection standards. Claimants are now required to submit a plan of operation for the approval of the Bureau of Land Management or the Forest Service to prevent ‘unnecessary or undue degradation of the land’. Furthermore, federal agencies are required to prepare environmental impact statements pursuant to the National Environmental Policy Act. Financial guarantees are required to cover the full cost to reclaim the operation.

The National Mining Association, a national trade organisation, doesn’t question the importance of this framework but claims that imposing multiple permit requirements from various agencies hinders the development of mining projects. It argues the permitting process takes an average of seven to ten years in the US, making it ‘among the longest in the world’.

Legal challenges from individuals or environmental organisations opposing lithium projects are also a factor of unpredictable delay. The Thacker Pass project in Nevada was able to start its construction phase in March 2023, following complaints and litigation brought by environmental groups, tribes and ranchers. The Rhyolite Ridge, another lithium project in Nevada, is still undergoing environmental review after a wildflower growing on the site was added to the Endangered Species Act list in 2022.

It’s difficult, however, to determine precisely the main causes of permitting delays. Sometimes they may occur due to technical difficulties, a loss of investors’ interest because of the change in commodity prices, or the lack of a clear regulatory structure from states. Legal challenges may also be initiated for reasons other than those relating to the environment, such as due to the religious or cultural significance of a site.

The right stuff

Nevertheless, it seems possible to address the industry’s concerns about the timeliness of lithium mining development projects without diminishing environmental standards.

Firstly, the location of a mining operation must be carefully chosen to avoid sensitive areas and cannot only be dictated by the finding of a promising deposit. Mining permits should be delivered while taking into consideration a possible conflict arising from use of the land and the necessary preservation of natural resources or endangered species. A planification on a large scale could help identify the adequate locations where lithium exploration could be promoted.

Kristi Disney Bruckner, Law and Policy Director at the Initiative for Responsible Mining Assurance (IRMA), says she would ‘recommend that governments undertake a strategic environmental and social assessment process with robust input from stakeholders and rights holders to determine where mining will be allowed and where it will not, to respect environmental and social values, and to inform integrated national and subnational development plans’. She underscored the necessity of input and continuous engagement processes that ‘respect mine-affected communities and uphold the Free, Prior, and Informed Consent of Indigenous rights holders’. Timely consultation with stakeholders is both crucial to a company’s social licence to operate and essential to ensure the long-term legitimacy of a new mining policy.

Current proposals to instate royalties or leasing contracts for lithium extraction could help fund the preservation of natural resources and wildlife habitats or compensate local communities for any disturbances. Increasing the amount of reclamation bonds or ensuring improved funding of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)’s superfunds by mining companies could also bolster support from populations who are affected by a project.

Mining will never be a zero environmental impact activity. However, some techniques for lithium extraction, such as recirculating water systems, recovery from geothermal brines or through electrochemical methods, are emerging to mitigate its effects and balance the long-term benefits for the energy transition with the immediate costs for ecosystems. The standard of the ‘best available technology’ for pollution abatement will probably change accordingly.

As Patrick Donnelly, the Center for Biological Diversity’s Great Basin Director, set out to the Joint Interim Standing Committee on Natural Resources in Nevada, his organisation supports ‘domestic lithium extraction as well, if it is done in the right places and with the right techniques’. Moreover, one could add ‘and with the right agency support’. Following presidential and congressional direction to review laws and regulations that could hinder mineral development in the US, an interagency working group of experts was launched in 2022. It concluded that the Mining Law of 1872 should be reformed and made some recommendations to streamline permitting in the short-term. Amongst them, it urged remedy of the ‘under-engagement’ between prospective miners and the federal agencies, which are under-staffed and lack resources. Bills are now pending in Congress to modify the permitting process and to limit last-minute legal challenges against permits.

‘Just’ extraction

For lithium extraction to be successfully undertaken in the US, it’ll be essential that the mistakes of the past don’t continue into the future. And perhaps the foundational element here is to ensure that the wealth being extracted is shared in a meaningful way with affected communities and rightsholders at the mine site level. The historical pattern of the exportation of wealth away from communities and rightsholders while the burden of the impact is shouldered almost entirely by these sectors is no longer tenable.

There’s one more element to consider: November’s US presidential election. If President Joe Biden wins, the federal government’s commitment to electrifying the energy grid will continue, as will the emphasis on batteries. However, if former President Donald Trump wins, it may be completely different. But despite Trump’s dismissal of the climate crisis and his lack of support for the energy transition, experts interviewed in a recent New York Times article suggest that by the time Trump ends federal support programmes, ‘the market may have reached a level where it would keep growing without government help’.

Currently, there’s no better option to replace lithium in electric batteries and recycling will not be sufficient to answer the global demand. The US shouldn’t, however, leave the environmental burden of mining to other countries and nor should the country lower its green and social requirements to incentivise domestic extraction projects. Some solutions to address the specific issue of permitting delays are underway, so that the energy transition will hopefully not come at the cost of the protection of the environment – or the other way around.

Amory Lovins, energy supply expert and co-founder and Chair Emeritus of the Rocky Mountain Institute think-tank, captured the essence of what must lie ahead when he wrote, ‘[d]iscussions of battery materials […] must consider not just simplistic demand projections or worrisome mines, but the whole system – end-to-end, linear-to-circular, and fully engaged with innovation, economics, and trade.’

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Don C Smith is Editor-in-Chief of the IBA Journal of Energy & Natural Resources Law and an associate professor of the practice of law at the University of Denver Sturm College of Law. He can be reached at don.smith@du.edu.

Louise Seiler is a graduate student at the University of Denver Sturm College of Law. She will earn a Master’s Degree in Environmental Law and Policy in 2024. She can be reached at louise.seiler@du.edu