Raw materials: On the hunt for hidden treasures

It’s a literal hot commodity: the water that Vulcan Energy pumps from the depths of the earth in Landau, western Germany, has a temperature of 170 degrees Celsius. After initial filtering of the highly saline liquid, it is sent almost 130 kilometers to the north, to the Frankfurt-Höchst industrial park. Here, the processing continues with the help of an electrolyzer. Hydrochloric acid and, after further drying, lithium hydroxide monohydrate are produced. The latter is a valuable raw material for a vital technology of the future.

Vulcan Energy’s ambitious goal: car batteries made in Germany. In January of this year, the German-Australian company announced successful production of its first batch. If the quality is right and the business successfully raises financing, it plans to start commercial production in 2027. It anticipates an output of 24,000 tons of lithium hydroxide monohydrate a year. That would be enough to provide half a million electric vehicles with the necessary energy storage capacity. “That’s not the only thing we need in Europe,” says Christian Freitag, Chief Commercial Officer of Vulcan Energy, “but it will help to create more self-sufficiency with regard to this raw material.”

Access to the relevant raw materials is a concern for companies, policymakers and society as a whole. But progress is being made in many areas. The spectrum ranges from increased recycling of raw materials and research into possible substitutes with similar properties (see article on page 27) to the exploitation of new raw material deposits. “The aim is to minimize the European Union’s dependency as far as possible,” says Tim Brückmann, Coordinator for Environment and Sustainability at DKE.

The current situation is serious. The outlook: ominous. The EU currently has a list of 34 “critical raw materials,” from arsenic, with its highly conductive properties, to tungsten, which is valued in aviation and telecommunications technology for its high density. Half of these materials are defined as “strategically relevant” – in other words, they are particularly important for developing green and digital technology or for ensuring stability in the defense and aerospace sectors. The electronics and electrical engineering industry, the primary consumer for many raw materials and a key supplier to many of these sunrise industries, is at the heart of this issue and is working on finding solutions.

These are needed more than ever. Commodity price fluctuations are nothing new, but companies in the past have always found ways to adjust. That era is now over. Firstly, the global appetite for raw materials is increasing as technology and digitalization advance ever faster. Energy storage devices, solar technology, hydrogen electrolysis and AI chips, for example, are completely dependent on certain materials that are only available in comparatively small quantities. For example, the International Energy Agency (IEA) recorded a 30% increase in demand for lithium between 2022 and 2023 alone. Demand for nickel, cobalt, graphite and rare earths rose by between eight and 15 percent.

Secondly, many industrialized countries are now taking a much more critical view of the ecological and social realities surrounding the extraction of raw materials. In South America, for example, lithium is often extracted by pumping groundwater containing minerals into huge reservoirs, where it evaporates. In these already dry regions, the vegetation around these mining projects withers. In villages close to mining areas in China, there are reports of disproportionately high numbers of cancer sufferers. And in the cobalt mines in the Democratic Republic of the Congo, children are said to be repeatedly risking their lives.

Thirdly, competition for these resources has become tougher. More countries either want to use the raw materials themselves, or have much stricter controls on who can use what is mined within their borders. Russia, a leader in nickel, titanium and palladium, has been waging a war of aggression against Ukraine for the last three years. Almost two years ago, China placed strict export controls on gallium and germanium, hugely important metals for semiconductor production. “It’s about economic policy and geopolitical instrumentalization,” says Simon Glöser-Chahoud, Professor of Corporate Sustainability and Environmental Management at the Technical University (TU) Freiberg. Prosperity is at stake; a study by management consultants Roland Berger together with the Federation of German Industries (BDI) has calculated that the German economy could lose up to 115 billion euros in added value if China were to cease supplying lithium.

The EU is countering this threat with the “Critical Raw Materials Act,” which was finally adopted in March 2024. Among other things, it stipulates that ten percent of the annual consumption of strategic raw materials should be produced within the EU. The challenge is that mining, particularly of raw materials such as metals that are needed for new technologies, has been neglected for decades in large parts of Germany (see interview). “The challenge is to reactivate this type of industry and integrate it into the value chain,” says Glöser-Chahoud.

It can take one, two or even three decades to identify deposits, approve extraction sites and start production. “Mines take years to establish – and decades to become profitable,” says Glöser-Chahoud. The “Critical Raw Materials Act” aims to shorten these approval cycles and provide funding for important projects. Things are already happening on the ground. In Pöhla in Saxony, for example, the mining of tungsten, fluorspar and tin is scheduled to start in 2027. Several dozen other projects are in preparation in Saxony alone, many of which aim to develop lithium.

Vulcan Energy, which uses the lithium-rich brine of the Upper Rhine Plain, is familiar with these challenges. The company expects to invest around 1.4 billion euros in preparation to start operating the commercial plant in 2027. Extensive discussions must be held with local residents before drilling is carried out – there is often a great deal of skepticism about mining projects. “The success of these projects relies on constant transparency,” says Vulcan Energy manager Freitag. His company brings a convincing additional argument to the table; the hot liquid is also used to operate a geothermal power plant – and thus bring carbon-free energy to the region via a sustainable supply of district heating.

The enterprise is not without risk, however: it is not always possible to reliably predict whether and to what extent certain raw materials will be needed in a few decades’ time. It is also clear that technology’s growing demand for raw materials cannot be met by production within the EU, not least because there are simply no relevant deposits in this region of the world. For example, the EU currently sources 100 percent of its heavy rare earths from China.

Despite its misleading name, the raw material europium also belongs in this category. This shiny, silvery, soft metal is used, for example, in flat screens and lighting, but also in lasers and electronic measuring devices. A team of researchers at the Swiss Federal Institute of Technology (ETH) in Zurich has now succeeded in extracting the valuable material from old fluorescent lamps. The scientists are using tetrathiometalates, which enable a comparatively simple separation of the rare earth metal. “This allows us to obtain europium in just a few simple steps – and in quantities that are at least 50 times higher than with previous separation methods,” says doctoral student Marie Perrin.