Column: Electric dreams turn into a nightmare for battery metals
A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
Agence France Presse reports Argentina is promoting the idea of an OPEC-like cartel for itself, Bolivia and Chile – which together control 85% of the world’s reserves of lithium – to manage prices and limit overproduction.
A ton of lithium, worth around $2,500 in 2004, now sells for more than $6,000 and its greatest use is expected to be in electric vehicles: if electric cars achieve a 5% penetration rate by 2020, 60,000 tons of lithium will be needed to fill the demand according to one analyst but recycling would reduce demand for virgin materials.
“In the near future and with our production at such a high level, Bolivia, Argentina and Chile will control the lithium market,” said Rodolfo Tecchi, the director of the technology and science promotion division of the Argentine Ministry of Science and Technology.
“They could do it with a sort of OPEC-like arrangement,” he added.
On Monday Wall Street Cheat Sheet argued Lithium poses problems similar to those associated with oil:
According to researchers at the Argonne National Laboratory, worldwide demand will not exceed 8 million tons, well within the recoverable 12 million tons of reserves estimated by the U.S. Geological Survey. The issue has more to do with our rising demand for electric vehicles. In 2009, worldwide Lithium production reached 120,000 tons. If electric cars achieve a 5% penetration rate by 2020, 60,000 tons of Lithium will be needed to fill the demand.
Linda Gaines, transportation systems analyst, states in the Argonne Spring 2011 research review:
With optimistic electric vehicle market penetration scenarios mapped out to 2050, Gaines and her colleagues found that the lithium supply should not be an issue any time soon.
“In the case of materials for lithium-ion batteries, it appears that electric-drive vehicles can be supported for decades with known supplies of lithium, even at an aggressive rate of growth,” Gaines said.
The recovery of lithium and other materials through battery recycling would help lessen the production demand for virgin materials.
Reuters reported last week on why lithium-ion batteries die so young:
What’s going on in the battery that makes it give up the ghost? The short answer is that damage from extended exposure to high temperatures and a lot of charging and discharging cycles eventually starts to break down the process of the lithium ions traveling back and forth between electrodes.
Image of a fresh brine pit at Sal de Vida, Argentina is from Lithium One Inc.
