Critical minerals in the battery value chain
From mining and processing to recycling
Growing demand for batteries is increasing pressure on the supply of critical raw materials needed for electric vehicles, battery energy storage systems (BESS), and other applications supporting the transition to a low-carbon economy. Building a resilient battery value chain requires responsible extraction, efficient processing, smarter resource use, and greater recovery of materials throughout the life cycle.
Understanding the entire battery life cycle – from mining and mineral processing to battery production, use, and recycling – is essential for developing resource-efficient, resilient, and commercially viable value chains. As reliance on batteries grows for transportation and renewable energy storage, improving how materials are sourced, processed, used, and recovered will become increasingly important.
Mining: the start of the battery life cycle
The journey of a battery begins with extracting essential minerals containing lithium, cobalt, nickel, manganese, phosphorus, iron, copper, and graphite. These materials are critical to the performance of lithium-ion batteries (LIBs).
As battery demand grows, the mining industry faces pressure to expand responsibly and sustainably. The industry needs to move toward more responsible practices, integrating principles of circularity and applying sustainable extraction methods.
Converting raw materials into battery-grade chemicals
After extraction, battery minerals undergo chemical and metallurgical processing to obtain battery-grade chemicals.
Nickel, cobalt, and manganese are used in high-energy-density cathode materials (NCM) for high-end, long-range EVs. Another variant is NCA, where aluminum is used instead of manganese. Iron and phosphate are used in LFP batteries, which are gaining popularity due to their lower cost and increasingly competitive energy densities, helping enable price parity with traditional cars.
Lithium, which is required in both of these two most widely adopted battery types, is extracted from brine deposits or hard rock (spodumene). Natural and synthetic graphite are the most common anode materials.
Sodium-ion batteries are emerging as a complementary technology to lithium-ion batteries, particularly for stationary storage, entry-level electric vehicles, and cold-climate applications. They typically replace lithium, nickel and cobalt with abundant sodium but require an altogether different and partly undeveloped battery-materials supply chain.
Production of battery pre-materials
The battery-grade chemicals are then used to create Precursor Cathode Active Materials (pCAM).
In NCM/NCA precursor production, nickel, cobalt, and manganese or aluminum sulfates are mixed, followed by co-precipitation of a mixed metal hydroxide or carbonate. This process is critical to the uniformity and performance of the final cathode active material (CAM).
In CAM production, pCAM is blended with lithium and subjected to high-temperature calcination to form the correct crystal structure.
On the anode side, synthetic graphite is produced from petroleum coke in a high-temperature graphitization process where the necessary crystalline structure is formed, while natural graphite concentrate from mining operations undergoes flotation, shaping, coating and purification steps. Bio-based anode carbon sources are also actively being developed.
Battery manufacturing and battery applications
Battery manufacturing plants, or gigafactories, produce batteries on a large scale. These projects are highly complex and capital-intensive, requiring multiple interrelated processes, including slurry preparation and mixing, electrode coating and drying, calendaring and cutting, cell assembly, electrolyte filling, formation, and aging. Specialized equipment and clean room solutions are essential for maintaining low moisture and contamination levels.
The produced cells are then assembled into modules and packs for various applications. Global battery demand in 2025 was 1.6 TWH (29% YoY growth), and the deployment split was dominated by transportation (75%), followed by energy storage systems (20%) and consumer electronics (5%). 1
End-of-life recycling
When batteries reach the end of their life, recycling through hydro- and pyrometallurgical processes, preceded by disassembly and mechanical separation, is crucial for reclaiming valuable materials for reuse.
Technologies are advancing rapidly, particularly for NCM batteries, while LFP battery recycling remains relatively underdeveloped due to its lower material value. Second-life applications, where EV batteries are repurposed for less demanding roles (such as BESS), are also gaining traction.
Closing the loop: toward a circular battery economy
Building a more circular battery economy means making better use of resources throughout the entire value chain. This includes extending battery lifespan, maximizing material recovery and recycling, reducing the use of toxic chemicals, and minimizing energy use and waste generation.
Key strategies in this transition include:
- Alternative processing: The production of battery materials is resource-intensive, requiring large amounts of water and energy. Ongoing research focuses on optimizing processes to reduce unwanted by-products and energy consumption.
- Vertical integration: Connecting mining, refining, battery materials, cell and pack production, and end-use applications can improve cost efficiency and product quality control.
- Design for recycling: Range is one limiting factor for the widespread adoption of EVs, which means that energy density has been prioritized over recyclability in battery design. However, as energy density improves, the emphasis may shift toward recyclability to facilitate easier disassembly and higher material recovery.
- Efficient recycling processes: Advancing recycling technologies, especially for LFP chemistry batteries, can enable the recovery of more materials with less energy and fewer by-products.
- Tracing and sustainable sourcing: Ensuring that battery materials are sourced responsibly requires attention to environmental and social considerations. Concepts such as battery passports can digitally track relevant battery sourcing information.
- Reducing the use of scarce materials and toxic chemicals: Developing alternative materials can reduce reliance on limited and harmful resources.
- Government policies and industry standards: Policies and standards play a vital role in driving the circular economy. Incentives for recycling, regulations on disposal, and support for research into sustainable technologies are all important enablers.
Turning market challenges into future opportunities
The battery market has entered a more mature but still expanding phase within the last few years. Global deployment continues to grow, led by electric vehicles and increasingly by stationary energy storage. At the same time, substantial manufacturing overcapacity – particularly in China – continues to intensify competition, lower prices, and drive consolidation across the value chain. The current market situation is not at all a retreat from electrification, but a transition from rapid capacity-led expansion to disciplined industrial execution.
Successful operations now depend less on securing capacity alone and more on achieving scale, vertical integration, high utilization and yield, reliable ramp-up, and differentiated new products. Cost-efficient LFP chemistry is gaining share in both mobility and stationary storage, while nickel-rich chemistries remain important where high energy density is required. Supply concentration and geopolitical uncertainty are also accelerating strategic partnerships, traceability, and regional industrial policy support – especially in Europe and North America.
