How Does the Supply Market Look for Lithium?

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All this talk about new electric vehicles, hybrid technology and stimulus packages has us on a roll examining all of the metals going into these new technologies. But in addition to looking at the key metals, we want to understand the headlines behind them. And in some cases, better understand what the stories mean from a global sourcing perspective. Let’s take a look at lithium, as an example.

Lithium, the lightest of the metals, finds itself squarely in the middle of everything battery ” from electric vehicles, to portable electronic devices, to computers and many items in between. With demand growing at 4-5% annually, according to the USGS, and lithium officially not on the critical metals list (see yesterday’s post), all is merry in lithium land right? Well, that depends on what you read.

Just yesterday, Reuters came out with this story suggesting that any spike in demand could be fraught with difficulties. Basically, 50% of the world’s lithium deposits sit in Bolivia, run by Hugo Chavez’ friend Evo Morales. We even wrote a similar piece on this a couple of months ago.

Let’s review the numbers. According to the Reuters article, global lithium carbonate consumption reached 105,000 tons in 2008, while supply was 100,000 tons (lithium carbonate is what is used to make the compounds for batteries). According to the USGS, US reserves of lithium total 760,000 tons.  One kg of lithium equates to 5.3 kgs of lithium carbonate, according to this report from Rodinia Minerals, report NI 43-101 available here.

In another recent article, with a great overview of the lithium market, the author describes a region in Nevada, Clayton Valley as The US Saudi Arabia of Lithium.  According to the author, only a small portion of total production and resources has been accounted for. The article sites 2-22 million tons of lithium was “liberated in the water system of Clayton Valley. Only one US lithium brine miner is in Clayton Valley. Rodinia Minerals seeks to support the lithium battery demand by becoming a second lithium brine miner. But it’s unclear at this juncture how much of that 2-22million tons of lithium is actually viable (that research is on-going) in terms of development as an economical source of supply.

Whether any of this turns into medium term or longer term supply remains to be seen. In the meantime, let’s hope we can continue importing materials from Chile and Argentina and avoid the Bolivia route altogether.

–Lisa Reisman

Comments (5)

  1. chasqui says:

    I’m from Bolivia and I would beg you NOT to invest in my country. There are no institutions, simply organized political gangs whose only focus is to enrich themselves. It doesn’t matter if they from the left or right, they are all the same. Please wait until there is some semblance of institutionality and transparency before feeding the corrupt gov’t aparatus

  2. ron davis says:

    I have lived in Bolivia for 25 years and resent the anti Evo Moralaes tone taken by the mining interest publications. It is obvious they do not care about the welfare of the people of Bolivia.
    Anyone who is against uncontroled exploitation is a communist, right?
    What else is new?

  3. Keith Evans says:

    At a major lithium conference held in Santiago,
    Chile, in January, an update of a National Research Council report prepared in the 1970’s accounting for major later discoveries, estimated global lithium resouces and reserves at approx. 30 million tonnes (equivalent to approx. 160 million tonnes of lithium carbonate, the principal feedstock for the lithium chemicals used in lithium-ion batteries).
    The same estimates were quoted by two of the major current producers but SQM the third major producer estimated a higher total of 190 million tonnes (35.7 million tonnes Li). Chemetall pointed out that reserves at current and proposed operations totalled 74 million tonnes of carbonate. All three stated that Li-ion vehicle batteries required 0.6 kg carbonate per kW/h thus ranging from 1.2 kg in a mild HEV through 7.2 kg in a PHEV and 15 kg in an EV.
    (Estimating a battery price of 500 Euros/kWh and a carbonate price of 6 Euro/kg Chemetall stated that the carbonate cost in a battery represented less than 1% of the total). Looking at battery demand in another way, each million tonnes of recovered Li will be sufficient for 550 million Chevrolet Volts.
    Lithium reserves and resources are widely distributed geographically and geologically and recent journalistic hype to the effect that the development of the Salar de Uyuni is a prerequisite for the large scale electrification of vehicles is baseless. This particular salar contains only an eigth of the world resources.
    The large resources claimed for the Clayton Valley area are not in the estimates above.
    One final comment concerns the current supply/demand situation. Quoting again from the Santiago conference, chemical demand estimates ranged between 93,000 and 95,000 of lithium carbonate equivalents and production
    capacity approximates to 115,000 tonnes. Existing operations are capable of major expansion and a number of new projects are at various stages of evaluation.

  4. admin says:

    Keith, thank you for your comments and feedback. It sounds like you are confident that long term supply for Lithium is not an issue. I’d love to have you guest author something for MetalMiner! LAR

  5. TRU says:

    There is an authoritative long range lithium supply-demand forecast 2020 in a slide show posted on the TRU website. The demand projection is by end-use and the supply by state of development of various lithium projects including Bolivia’s Uyuni and lesser known Taijnar China (CITIC and QingHai). There is also a forecast for electric vehicles sub-segmented by type and lithium use in li-ion batteries. The paper was presented at the major IM Santiago Lithium conference in January 2009.

    http://www.trugroup.com/Lithium-Market-Conference.html

    The Salar Uyuni salt lake in Bolivia has been described at the world’s largest lithium resource for over forty years and early in 2009 the world press has continued to describe it as such. However, the potential for Uyuni has been greatly overstated given the state of knowledge we have of the resource. Lithium mining is difficult and the processing in the case of Uyuni will be tricky. Further deep drilling exploration is required before we actually can determine its true potential to produce lithium carbonate for batteries. At this time TRU’s estimate of the Uyuni lithium resource has a very wide range “ true it could be large (it even may be the world’s largest resource) but it also could turn out to be only a minor source of lithium!

    By the way, the need for Uyuni to be developed at all is also exaggerated. It would be comforting to have (good for the Bolivian economy) but it is not required nor is it urgent! More information at “

    http://trugroup.com/Uyuni-lithium.html

    TRU Group Inc – Lithium Consultants.
    May 15, 2009

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