Digging it

The hunt for Germany's buried e-car treasure

Lithium-Erkundung im Erzgebirge
Core findings. Source: dpa

Germany’s centuries-old mining tradition in the Ore Mountains all but died after reunification in 1990. Indeed, the region is now best known for making nutcrackers.

But that could all be about to change thanks to a gold rush, or rather lithium and cobalt rush, dawning in the hills straddling Germany’s border with the Czech Republic. The metals are vital components of modern car batteries and the Ore Mountains have plentiful reserves of both.

Armin Müller, the head of Deutsche Lithium, a joint venture between insolvent solar-plant maker Solarworld and Canadian mining group Bacanora Minerals, secured mining rights for an ore seam that stretches from a mine at the village of Zinnwald to beyond the Czech border. “That’s lithium mica,” he said, standing in a gallery dug in 2017 at the end of a tunnel that’s almost 400 years old. He was pointing at areas in the white quartz that shimmered silver and black. In some stones it can be peeled off like flaky pastry, and lithium can be derived from it.

Suppliers are already warning that the world doesn’t have enough lithium and cobalt reserves.

Mining firms from Australia, Germany, Canada and the US are drilling for lithium and cobalt in dozens of locations in the Ore Mountains. In the next three years, automakers plan to roll out 350 new electric car models worldwide, according to consultancy McKinsey. E-car production is expected to surge to 5 million cars in 2020 from 1 million now. Some suppliers are already warning that the world doesn’t have enough lithium and cobalt reserves for that kind of output.

Lithium is most abundant in Australia, Chile and Bolivia, while cobalt, which is even rarer, is mainly mined in the Democratic Republic of Congo. But both metals are present in the Ore Mountains in gigantic granite bodies created underneath volcanos 300 million years ago. It is estimated that some 4 percent of the world’s lithium reserves lie in the ground somewhere between Dresden and the town of Aue. The problem is that no one knows exactly where.

Solarworld AG sucht Lithium im Erzgebirge
Careful. It's precious. Source: picture alliance / Jürgen Lösel

It could all have been so easy. In the Cold War days, mining company Wismut, a joint venture between communist East Germany and the Soviet Union, scoured the region for uranium to build nuclear weapons. In the process, it amassed a trove of core samples, cylindrical sections of rock obtained from exploratory drilling and used to figure out what treasures lie underground.

In 1990, after reunification, Wismut, then wholly owned by the German state, had a million meters of core samples in its stores — but threw most of them away a few years later to save on storage costs. This is now regarded as a huge mistake as those core samples would have spared mining companies the task of exploratory drilling that costs around €1,000 per meter. Today the samples discarded in the 1990s would be worth hundreds of millions of euros.

Deutsche Lithium was lucky. Mr. Müller found old mining documents that pointed to Zinnwald as a promising location for lithium. Last summer the company removed 100 tons of granite from the mine. “That stone is for the banks,” he said, pointing at rock samples with which he intends to prove that enough lithium can be extracted to make large-scale mining profitable.

He wants the banks to co-finance the projected €120 million ($149 million) investment in the new mine to be dug here at a depth of up to 300 meters. It’s due to go into operation in 2021. Under the plan, chemicals company BASF will refine the lithium at its plant in Schwarzheide, Brandenburg.

Mr. Müller estimates that there are some 100,000 tons of lithium under Zinnwald, enough for 20 million e-cars.

Mr. Müller estimates that there are some 100,000 tons of lithium under Zinnwald, enough for 20 million e-cars, plus a further 30,000 to 40,000 tons under the nearby village of Falkenhain, which he also plans to extract.

Mining firms are also looking for cobalt to lessen their dependence on the Democratic Republic of Congo where more than half the world’s supplies are currently being mined, often illegally and in atrocious conditions. Chinese traders have been buying up those supplies and are selling them primarily to Chinese automakers. VW has been trying for months to find a cobalt supplier — so far in vain.

So cobalt from the Ore Mountains could be an alternative for German automakers. The problem is, it’s especially hard to find because it’s usually hidden in veins that are 10 to 15 centimeters thick and stretch for hundreds of meters, said geologist Enrico Kallmeier.

The German Economics Ministry has launched a project to locate promising drilling sites by analyzing thousands of sediment samples taken from streams in the region to find out where valuable minerals have been flushed out of the ground, and by designing a 3D model of the Ore Mountains to help mining companies in their search.

Experts are also poring over Wismut’s archive of yellowed, musty lab reports and maps from the Cold War days, many written in Russian, showing which metals were found at what depths. At the time, the Soviet and East German chemists rarely examined the rock samples for lithium and cobalt. But in some cases they did, and those reports are gold dust now. The state of Saxony, where the Ore Mountains are located, is in the process of digitizing these and other geological documents to simplify future searches. Wismut is also digitizing its archive, an arduous process because they’re mostly hand-written.

Until that digital archive is complete, Wismut will continue to be inundated by calls and emails from German and foreign mining companies trying to find out where to dig — wishing it hadn’t thrown away its own treasure a quarter of a century ago.

A version of this story first appeared in the business weekly WirtschaftsWoche, a sister publication of Handelsblatt. Thomas Stoelzel and Martin Seiwert write for WirtschaftsWoche. To contact the authors: Thomas.Stoelzel@wiwo.de

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