37 Centre for Economics and Business Research due to EVs could in the future push up the costs, making EVs and also other products more expensive, where these raw materials are essential input factors. According to an UNCTAD report, the expected boom in mining for the rawmaterials used to make rechargeable batteries poses environmental and social risks that must be urgently addressed. “Most consumers are only aware of the ‘clean’ aspects of electric vehicles,” says Pamela Coke-Hamilton, UNCTAD’s director of international trade. “The dirty aspects of the production process are out of sight.” This is because while the majority of the consumers live in industrialized nations, the lion’s share of the raw materials is concentrated in a few developing countries. 49 A prime example of the environmental risks from increasing demand for EVs is found in the salt flats in the Andean regions of Argentina, Bolivia, and Chile, where more than half of the world’s lithium resources lie. Lithium mining requires huge amounts of groundwater to pump out brines from drilled wells, and some estimates show that almost twomillion litres of water are needed to produce one ton of lithium. In Chile’s Salar de Atacama, lithium and other mining activities consumed 65% of the water, causing groundwater depletion, soil contamination and other forms of environmental degradation, forcing local communities to abandon ancestral settlements. From a social dimension, the rising demand for such materials raises concerns over the working conditions for those involved in their extraction. The DRC, which was responsible for 71% of global cobalt production in 2019 and just over 50% of worldwide reserves lends itself as a useful example. Large-scale or industrial mining is responsible for over two thirds of cobalt production in the DRC, with the other third supplied by artisanal mines. While some of this artisanal mining is formal and registered, most is not and is often associated with unethical labour practices. 50 Lithium Shortages Boston Consulting Group (BCG) have recently estimated that the global supply of lithium is set to fall short of demand for the first time by 2030, with the gap set to expand rapidly to 24% in 2035.51 The BCG report predicts that expanding mining projects and increased recycling will enable global lithium supply to continue exceeding demand until at least 2025, and possibly 2030. However, it states that the most likely case-scenario in 2030 is a 4% shortfall between supply and demand. This relative rise in demand is expected to be driven directly by the growing use of lithium-ion batteries across the world. Lithium is the most critical raw material for the manufacture of EVs, but there are also other minerals that need to be mined to make and EV vehicles, including as nickel, manganese, and cobalt. 49 https://unctad.org/news/developing-countries-pay-environmental-cost-electric-car-batteries 50 https://www.iisd.org/articles/trade-electric-vehicle-raw-materials 51 https://www.edie.net/acute-lithium-shortages-forecast-by-2035-as-battery-supply-chains-expand/
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