As we come to terms with the worldwide effects of the coronavirus pandemic, the reverberations caused by it are reshaping our society’s perspective on a wide range of affected areas. The stock market gave back most all of its gains since 2016. The worlds of sports and tourism have come to grinding halts. Social events and public gatherings have been either postponed, canceled, or switched to online. To exacerbate the situation, there’s no clarity on when normalcy will be restored.
The COVID-19 pandemic has caused an economic panic around the world. Businesses and financial markets are encountering setbacks prompted by the inherent uncertainties stemming from the pandemic. The need for innovative problem-solving has peaked—with necessity calling out all outside-of-the-box visionaries to step up and forge the “new” era of normalcy that’s upon us.
Fortunately, an open source of helpfulness from a global community of divergent sources is spreading hope as solutions are cropping up to address the problems stemming from travel restrictions and social distancing required to restore order. Technology is at the forefront of various disaster-mitigation agendas, with numerous activities switching to virtual from physical environments in real time. Telehealth programs are being fast-tracked to bring aid to people online that otherwise would not be reached. Employees worldwide are working at home through their personal computers.
Worldwide there are more than 800 million students in 107 countries who can’t go to school. So, education institutes are ramping up online curriculums to make up for the closures. Coursera, an online educating service provider, is offering counseling to assist schools shifting to online teaching. Cisco, Google, Log Me In, Microsoft, and Zoom also are offering helpful services.
In the business community, certain logistics problems can’t be addressed by switching delivery systems to virtual platforms. The situation we’re experiencing could reveal problems in a supply management chain, and without an alternative solution, these problems could escalate to insurmountable. The ability to coordinate the activities required to plan, control, and execute the flow of a product, from materials to production to distribution, in the most economical way is challenging even under normal circumstances. While the variables differ among industries, the objective remains the same.
China’s Impact on the Li-Ion Supply Chain
For example, industries that need lithium-ion batteries to keep their business models intact, such as U.S.- or EU-based renewable-energy firms and electric-vehicle manufacturers, are businesses with supply-chain management dilemmas spurred on by the pandemic. These businesses must have an ample inventory of batteries to maintain their production levels. With 67% of lithium-ion batteries in the market manufactured in China, these travel restrictions have exposed a critical vulnerability in the supply-chain management systems for Li-ion batteries.
Most of the minable materials for production of the Li-ion supply chain, which include nickel, cobalt, lithium, and graphite, are mined in China. More than 50% of lithium (51%), cobalt (80%), and graphite (100%) come from China. To date, three major lithium-ion battery companies have issued warnings, citing the coronavirus putting a significant problem on their logistics.
Along with having to deal with an economic rival in China, firms that depend on their supply-chain management and logistics are facing unprecedented challenges to remain operational. The pandemic has exposed the need for local, critical material supply chains, particularly with the demand for lithium batteries growing as the development of the electric-vehicle industry and worldwide electrification ramps up.
Filling the Gap Through Recycling
In the U.S. and the E.U., where domestic supply isn’t available from the primary sources, leveraging secondary resources, such as from a U.S.-based recycling of Li-ion batteries, is an alternative that would reduce costs and solve the availability issue—even during a global health security threat—due to better proximity. The technology to offer this solution stems from achieving high-recovery rates of lithium, cobalt, and nickel. Buying recycled Li-ion batteries provides a solution to diversify and localize critical materials supply chains. It’s also a relatively more sustainable source of these materials in comparison to primary resources.
The technology behind the recycling of lithium-ion batteries ensures the best of quality-control standards, making a secondary source a better choice for companies with operations in North America or the EU. A seller utilizing the best of services for recycled batteries ensures that its batteries are top quality by controlling the process. From the acquisition of the product to the handling of damaged batteries to the implementation of reverse and forward logistics, the highly regulated process maintains the highest level of safety standards and adheres to the guidelines of governing bodies.
Firms that rely on goods or materials from affected regions can’t simply switch out their required resources, but the mode of acquiring those resources is changeable. Navigating through a crisis may lead to a solution that may not have been considered previously.
Kunal Phalpher is Chief Commercial Officer of Li-Cycle Corp.