Silica, or silicon dioxide, is a mineral with chemical formula SiO₂. Silica is a simple molecule and one of the most abundant minerals on Earth, constituting over 10% of the planet’s crust. However, silica occurs in a wide range of forms with very different properties and prices, from gravel to quartz crystals to amorphous glass. The result is that silica has a huge variety of applications in many industries, but can also be difficult to manage as a commodity due to the complexity and diversity of its production and supply chains.
Different silica deposits require different mining techniques (and are suitable for different applications), but in general, silica is extracted with standard mining and quarrying and equipment and methods such as open pit mining and dredging. Sand and gravel mining provides the majority of the worlds silica, but higher grade silica such as quartz is critical to many industries.
Silica consumers generally require a specific from of silica and thus must be matched with an appropriate source. Silica ranges in form from rock, gravel, and sand destined for construction sites, priced at under $5/ton to quartz crystals grown in laboratories for use in electronics, which can sometimes fetch prices of $1000/kg. The majority of the market is represented by silica priced under $100/ton, transportation and delivery costs place a high premium on local sourcing of material, resulting in much more localized markets served by a smaller number of companies.
Currently, there exist seven major regional silica markets: North America, Western Europe, Eastern Europe, Asia Pacific, Latin America, Middle East, and Africa. Such market fragmentation makes it difficult for buyers to find direct channels to suppliers.
Silica is all around us. Nearly every consumer product depends on silica at some point, whether in the manufacturing process or the final product. Roughly 95% of silica is used in the construction industry as the major component of concrete or glass. Silica is also critical to the energy sector, with more than half of U.S. crude oil production relying on usage of silica to increase well production output. Higher grades of silica are vital to electronics, from solar panels to cell phones.
Silica is inert and non-toxic, and consumer products made of or containing silica (such as glassware and electronics) are generally very safe to handle. However, in industrial settings exposure to silica dust can result in respiratory silicosis in both workers and residents in nearby communities. Silicosis is a major occupational lung disease globally, resulting in over 40,000 deaths per year.
Global production of industrial silica sand, which represents the largest portion of the silica market, was approximately 300,000,000 tons in 2019, with a much larger amount of lower quality construction and reclamation sand being produced. It is hard to track the total quantity of sand consumed, as there is a large black market for sand created by fragmented markets and poor supply chains.
Production of silica sand is currently rising at roughly 6% per year.
The global silica demand is expected to double every decade, with three primary segments: specialty, industrial, and sand silica are projected to be worth approximately $6 billion, $32 billion, and $14 billion respectively by 2025.
Lithium is an elemental metal in the same group as sodium and potassium, among others. Due to its reactivity, in nature lithium is found as salts and other compounds such as lithium chloride. In its pure form, lithium is a soft silvery metal with low density and high reactivity, especially to water. Lithium metal must be stored in an inert liquid such as mineral oil to avoid reaction with air.
The majority of lithium is extracted as lithium salts in brines obtained from mineral springs, pools and groundwater deposits. Some of the richest brine deposits exist under dry lakes, where minerals have become concentrated by evaporation. This brine is pumped to the surface where the water is allowed to evaporate, leaving behind lithium salt crystals which are collected and refined. To produce elemental lithium, a molten mixture of lithium chloride and potassium chloride is electrolyzed to yield chlorine gas and lithium metal.
Lithium can also be extracted from mineral deposits such as spodumene, although the requisite processing is more complex and costly than brine mining. Nevertheless, hard-rock lithium production is rapidly expanding due to demand, and represents up to a third of the global supply.
Lithium production is dominated by a relatively small number of large scale producers due to the specific geological conditions required for economically feasible sources. Due to the instability of lithium metal, it is usually distributed as a lithium compound such as lithium carbonate or lithium hydroxide.
Lithium’s unique properties make it useful in a vast array of applications. Roughly 90% of lithium is used in a few large scale industrial applications, primarily batteries (43% as of 2016) and ceramics and glass (28%) as well as lubricants, air treatment, and in metal and polymer manufacturing. The remaining 10% of lithium serves a vital role in a plethora of niche applications such as chemical synthesis, advanced optics, as a psychiatric medication, in nuclear reactors, and in life support systems for spacecraft and submarines.
In its elemental metal form lithium is highly reactive and corrosive. On exposure to water lithium metal reacts explosively, producing heat, caustic lithium hydroxide, and flammable hydrogen gas.
The risks of lithium compounds vary dramatically depending on the specific substance and how it is used. For example, tert-butyllithium is pyrophoric and small amounts can cause lethal injury, while lithium chloride was historically used as a sodium-free table salt until its relatively mild neurological effects were observed. Lithium-ion batteries can pose a fire risk, but they are generally considered reliable enough to be used in consumer electronics such as cell phones.
Global lithium production is roughly 100,000 metric tons per year, and global reserves of economically accessible lithium are estimated to be roughly 15 megatons. Annual lithium production is growing rapidly - between 2008 and 2018 lithium production increased over 300%. However, as brine sources are depleted producers must transition to more expensive sources such as mineral deposits. There are also pilot projects investigating alternative sources such as reclamation from used electronics, however they have yet to demonstrate economic feasibility. Lithium production is currently growing at around 9% annually.
While lithium usage is growing exponentially, consumption in 2019 fell short of production at roughly 50,000 metric tons, with the price dropping over 50%. The rapid growth of the electronics market has prompted many actors to bring large-scale operations online, exploiting brine pools and other easily accessible sources. As these sources are depleted, however, it is unclear how supply will keep up with demand. The market for lithium batteries alone is currently growing roughly 19% annually, expected to grow from $30 billion in 2017 to $100 billion by 2025.