The Renewable Paradox: Materials

By Peter Milios | More Articles by Peter Milios

The shift toward renewable energy has seen governments around the world push to reduce the reliance on dirty fossil fuels, instead turning their attention to the materials that make up clean energy devices, such as wind turbines, solar panels, electric vehicle batteries and hydropower.

However, paradoxically, the materials at the forefront of the shift to clean, renewable energy have been associated with some serious threats to the ecosystems and humanity worldwide. This involves some of the techniques involved in mining them and by-products from these processes, as well as various instances of human rights being violated.

In today’s piece, ESG issues surrounding lithium, rare earths, cobalt, copper, and polysilicon will be discussed.


Recently dubbed as ‘white gold’, lithium serves as the key ingredient in the make-up of a lithium-ion battery – the current gold standard of all EV batteries.

Lithium’s light weight and high electrochemical potential allow for the battery to store large amounts of energy, and thus, have a greater battery life over its alternatives.

However, there are some serious environmental issues regarding the extraction methods of ‘white gold.’

Lithium can be extracted in two ways – through brines or spodumene.

Brine lithium extraction involves extracting salt-rich water filled with lithium to the surface into a series of large ponds whereby evaporation helps to leave a bunch of minerals, including lithium, behind.

Further processing of adding sodium carbonate and calcium carbonate to the brines then allows for the precipitation of lithium, separating it from the other minerals.

However, this process requires an extensive water supply.

Approximately 2.2 million litres of water are required to produce one ton of lithium. Per day, the production of lithium through evaporation ponds uses around 21 million litres.

Removing this much water raises serious environmental concerns relating to air, water, and soil pollution, as well as the depletion of water resources in many of the local communities in these lithium mining regions.

The majority of lithium from brines come from the “lithium triangle” in South America, referring to Bolivia, Argentina, and Chile

And they have felt the detrimental effects of this method.

Lithium mining activities in Salar de Atacama – Chile’s largest salt flat, have consumed roughly 65 per cent of the region’s water. This has had an immense impact on local farmers’ ability to grow crops and feed livestock.

In late 2021, Indigenous communities living around the area also raised their concerns, asking authorities to suspend the world’s second largest lithium miner, SQM, over breaches that the ecosystem was in “constant danger.”

“Our request is urgent and…based on the state of environmental vulnerability of the Salar de Atacama,” council president Manuel Salvatierra said in the letter.

“It is a paradox in Chile. On one side we are talking about decarbonisation, [to mitigate] climate change and the loss of biodiversity and on the other side we exploit the environment for resources to power the electric mobility revolution that supports climate change,” Chilean scientist, doctor and politician, Cristina Dorador states.

Claims have also been made that the chemicals added to the lithium brines have polluted the water streams.

In Chile, local residents within the lithium triangle have criticised mining companies for polluting their waters and covering the landscape in blankets of discarded salt.

In Argentina, residents of the Salta and Catamarca provinces have made claims that the operations of lithium mining companies have contaminated the streams that are used by humans and livestock and for the purposes of crop irrigation.

However, interestingly, some companies have developed methods of lithium brine extraction that are both quicker and gentler on the environment.

Australian lithium miner Lake Resources (ASX: LKE) partnered with Lilac Solutions to create a method of direct lithium extraction (DLE) whereby the lithium filled brines are pumped from the ground and placed into tanks which contain special ion exchange beads that latch onto the lithium over a few hours. The lithium concentrate then remains in tanks while all the excess water and minerals are pumped back into the ground, leaving for minimal disturbance to the environment.

The process also takes hours instead of traditional DLE methods of nine months to two years.

Let’s turn our attention now to spodumene, which refers to lithium that is found in pegmatites which are considered texturally complex igneous rocks.

There are spodumene deposits in Australia, Canada, the U.S.A, and Portugal.

Spodumene extraction requires traditional mining techniques, which involves the blasting, excavating, and crushing of many thousands of acres of land.

It also uses open pit mining, in which surface soil, rocks, and available vegetation are destroyed to access the lithium. It also eliminates topsoil and causes soil erosion.

The spodumene found in Portugal, particularly the Barroso Lithium Project, poses serious threats to the surrounding biodiversity.

Francisco Ferreira, CEO of Portuguese environment NGO Zero, believes there are technical concerns regarding the 800-metre quarry being so close to a populated village, stating that it will, “put the population and environment in risk of a disaster.”

However, as bad as mining the spodumene is for the environment, further processing and separating the lithium from the rock requires heavy chemicals, which also has detrimental effects.

According to research report by Javier Rioyo, Sergio Tuset & Ramón Grau, titled, “Lithium Extraction from Spodumene by the Traditional Sulfuric Acid Process: A Review,” the most common method from lithium extraction from spodumene globally is via the sulfuric acid process, in which the acid is used to separate the lithium from the rock.

The report outlines how this process generates a huge amount of waste residue and requires high-temperature pretreatment, which is highly energy intensive.

And at the moment, due to the fact that energy costs have soared, the overall process has become quite expensive.

In addition, the sulfuric acid process can introduce impurities into the leaching solution requiring additional purification stages.

Leaching in this context is the process whereby lithium is treated with chemicals to convert it into soluble salts.

Currently, all of the spodumene concentrate mined in Australia is shipped to China where it is refined in battery grade lithium chemicals. Overall, China controls the midstream battery chain.

In the world, China controls approximately 59% of chemical refining, 61% of cathode manufacturing and 73% of battery manufacturing.

There have also been reports of chemical leaking from the lithium spodumene mines.

In 2016, in the Liqi River in China, dead fish were found floating in the water, as toxic chemicals were leaked from the Ganzizhou Rongda Lithium mine. Cow and yak carcasses were also found, as they had died from drinking the contaminated water.

Rare Earths

The term “rare earths” refers to 17 chemically similar elements numbers 57 through 71 on the periodic table), scandium, and yttrium. The light rare earth elements consist of elements 57 through to 64, and heavy rare earth elements consist of elements 65 to 71.

They are in the make-up of many current technological devices, including aerospace, satellites, mobile phone screens and computer monitors.

In addition, they will be fundamental to the shift toward renewable energy.

Rare earth elements like neodymium (Nd), praseodymium (Pr), dysprosium (Dy), samarium (Sm), gadolinium (Gd), terbium (Tb), dysprosium (Dy), and holmium (Ho), are imbued with a powerful magnetism that will allows for a quicker turn in movement to create energy.

Making them perfect for devices like wind turbines EV batteries.

There are two primary methods for rare earth mining.

The first involves removing the topsoil, and then creating a pond where chemicals are added to the extracted earth to separate the rare earth elements. This is a common form of rare earth extraction, as the chemicals quite easily dissolve the rare earths. However, the ponds, filled with a bunch of toxic chemicals, may leak into groundwater when they are not properly secured and can sometimes affect entire waterways.

The second method encompasses drilling holes into the ground using polyvinyl chloride pipes (PVC) and rubber hoses to pump a mixture of chemicals into the earth, which also creates a pond with similar issues.

Overall, for every ton of rare earth, 2,000 tons of toxic waste are produced.

Scientists say under-regulated rare earths projects can produce wastewater and tailings ponds that leak acids, heavy metals, and radioactive elements into groundwater, and they point out that market pressures for cheap and reliable rare earths may lead project managers to skimp on environmental protections.

And in China, rare earth extraction and processes are particularly bad.

On a side note, China controls approximately 70-90% of global rare earth element production.

The largest rare earth mine in the world, in the Chinese city of Baotou, has a pond next to the mine to contain the rare earth waste. However, this pond doesn’t line up properly and the sludge is seeping into the groundwater and moving towards the river, from which millions access their drinking water. This could have a devastating impact, as the waste products released contain thorium – which causes pancreatic and lung cancer.


Cobalt is another fundamental part of the EV battery movement.

Currently, EV batteries can have up to 20kg in each 100 kilowatt-hour (kWh) pack. At the moment, cobalt makes up approximately 20 per cent of the weight of the cathode in a lithium-ion battery.

Cobalt is essential to the battery because it ensures that the cathodes do not overheat or catch fire. It also helps to extend the overall life of the batteries.

However, its mining has come under a lot of scrutiny.

The Democratic Republic of the Congo produces roughly 70% of the world’s cobalt, and for years severe human rights issues including child labour and artisanal mining have been breached in the mining operations.

The Democratic Republic of the Congo government indicates that 20% of the cobalt, which equates to roughly 10% of global production, is produced from small mines.

UNICEF estimates that there are It is estimated that there are up to 150 000 artisanal miners in the area, including approximately 40,000 children who wash and sort ore before it is sold.

“There’s a whole range of human rights violations connected to cobalt mining in the DRC, generally stemming from the fact that it’s just a very poorly regulated activity by the Congolese government,” says Mark Dummett, head of business, security, and human rights at Amnesty International.


Copper is the unspoken hero in the renewable energy sector.

It has superior thermal and electrical conductivities that increase the energy efficiency of countless energy-driven systems that rely on electric motors and transformers.

As a result, it is used in renewable energy systems to generate power from solar, hydro, thermal and wind energy across the world.

In an issue paper from the Organisation for Economic Co-operation and Development (OECD), Dr. Mike Holland outlines that it is the lack of well-regulated jurisdictions that are the cause for the negative impacts of copper mining.

He outlines that for copper oxide ores, the copper is leached with sulphuric acid. The resulting copper sulphate solution is then stripped of copper via a solvent extraction and electrowinning (SX-EW) plant and the acid returned to the process.

However, if this is not properly regulated, substantial amounts of contamination of land and waterways can occur.

For example, in Peru, the La Oroya copper project was linked to significant contamination with arsenic, cadmium, and lead. Remediation works have been carried out, but their success is unknown.

In addition, in 2014, the Buenavista copper mine in Mexico released sulphuric acid into a 40 mile stretch of the Sonora River, impacting the drinking water and agriculture supply for 20,000 people.

In 2015, mine operators of the Konkola copper mine in Zambia were sued by local residents with respect to contamination of drinking water supplies and of agricultural land. An estimated 93 000 tonnes of industrial waste are generated in the area annually, with the mine regarded as the major polluter.

There is also a high risk where informal processing is conducted, with a particular concern over the dismantling and processing of e-waste, including the burning of insulation from wires. The emissions released can include lead and dioxins, which may affect the workers in the mines.


Polysilicon is a high-quality form of silicon that is an essential material component in the solar photovoltaic (PV) manufacturing industry. Thanks to its low heat tolerance and semiconductor properties, along with the ability to allow for a high-power density, it is the primary material and foundation building block for silicon-based solar panels.

However, if not regulated properly, the production process can create a range of toxic substances and gases.

Currently, China controls approximately 80% of the global polysilicon production, and the lack of strict regulation has resulted in multiple explosions and leakages from polysilicon factories.

In addition to this, polysilicon production has been linked to child labour.

 A few weeks ago, at the Conservative Political Action (CPAC) conference in Sydney, Environmentalist Michael Shellenberger stated, “the reason the Chinese were able to make solar panels so cheaply is because they use Uyghur Muslims that are housed in concentration camps.”

BBC reports that human rights groups estimate that more than a million Uyghurs have been detained in internment camps in the Xinjiang region of China.

U.S. House of Representatives, and other Republicans on the House Oversight Committee, also raised concerns about the situation.

“If we are not vigilant in our efforts to ensure that no solar panels or components made with slave labour are being purchased with federal dollars from FEMA or other U.S. agencies and used on similar solar projects, it is possible the United States could be directly funding the genocide and abuse occurring in China’s Xinjiang region,” the letter said.


The past 18-24 months have seen governments all over the world rush to aid the renewable sector – such as providing assistance for wind turbines, EV battery, hydropower, and solar panels. In doing so, jurisdictions are aiming to achieve net-zero emissions, as they are shifting from ‘dirty’ fossil fuels.

However, it is important to note that although the end product delivers clean results and aids this movement, the processing, mining, and production of the essential components of the make-up of such devices are often harmful to the surrounding ecosystems and humanity.

The main driver of these problems is that many of these materials are processed and manufactured cheaply in China or less developed countries, where rules surrounding human rights and the waste by-products from chemical processing tend to be more loosely regulated.

The U.S. and Europe have made it clear they want to shift from China.

In August, the U.S. passed a $1 trillion infrastructure bill, which looks to provide copious amounts of funding to all players in the EV supply chain, to incentivise the onshoring of renewable energy production.

Then, just last week, the Biden-Harris Administration, a part of the Infrastructure Bill, through the Department of Energy (DOE) revealed that a list of 20 companies operating in the U.S. EV supply chain were awarded with grant packages totalling US$2.8 billion.

The EU last month announced a legislative proposal of the Critical Raw Material Act, aimed at ensuring more resilient supply chains, whilst also reducing its dependency on China for the production of raw materials.

As more jurisdictions begin shifting operations from China and less developed nations, there should be a commensurate reduction in the ESG issues regarding the mining, processing, production and waste of these materials.

About Peter Milios

Peter Milios is a recent graduate from the University of Technology - majoring in Finance and Accounting. Peter is currently working under equity research analyst Di Brookman for Corporate Connect Research.

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