Looks like our Juniors will be busy developing Lithium deposits for these babies to run and Next Big Thing is taking off in Canada.Hybrid and electric cars need a boost.
By Joe Castaldo
Joe Castaldo is a staff writer for Canadian Business. He joined the magazine in January 2007 and has written about a variety of topics, including management issues and investing. For Canadian Business Online Joe writes about clean technology — companies, tech developments, and environmental policy and investing. More stories by this author >>
Lithium ion batteries have become the standard power source for the next generation of hybrid and electric vehicles. The technology is the best option so far for storing energy without taking up too much space or adding excess weight — and at a price manufacturers say will be affordable for the masses. But there might be a limiting factor to this paragon of power: lithium is a natural resource like any other. "There are concerns out there about whether there's enough lithium to support this new industry," says Ying Wu, a senior analyst with Lux Research Inc. in New York, which focuses on emerging technologies.
The recession has slowed down development of both hybrid and electric vehicles, but Lux is still projecting growth in energy storage. It estimates the market for batteries for plug-in hybrids will expand to US$756 million by 2013, and to US$539 million for pure electric vehicles; lithium ion batteries will account for nearly all of the market. That could put a strain on a commodity whose use right now is limited mostly to glass, and batteries for laptops and cellphones. The battery is already the most expensive component of plug-ins and EVs. (The battery pack for the Chevy Volt costs about US$8,000.)
The need for lithium has prompted some companies, such as Tokyo-based Mitsubishi Corp., to investigate untapped reserves in Bolivia, which contain 5.4 million tonnes of the element, according to the U.S. Geological Survey. That's nearly half of all the known lithium in the world, and more than is in Chile, the world's largest producer.
But supply worries may still turn out to be unfounded. "Companies are concerned, but they're wrong," says Edward Anderson, president and CEO of TRU Group Inc., a research and engineering consulting firm with offices in Toronto and Tucson, Ariz. TRU released a study earlier this year projecting lithium use to 2020 and found there will be no supply constraints — provided new production comes online. Bottlenecks will start in 2012, and demand will outstrip supply by 2019 without new sources of production. Still, Anderson says the attention on Bolivia and the country's salt lake, Salar de Uyuni, has been unfounded. "Not enough work has been done to say that Uyuni is a large resource or not," he says. Instead, new lithium supply is likely to come from other South American countries, such as Argentina, where a company called Rincon Lithium is developing an extraction project, and from China, where two plants are now in production. Companies in both countries are having problems, Anderson concedes, but he is still optimistic — at least in the short term. "If Rincon comes on stream and the Chinese correct their problems, there should be reasonable balance through about 2017," he says. The market will then tighten, even with new production, and what happens after 2020 is anybody's guess, Anderson says.
By that time, new technology could supplement or replace lithium ion. Wu points to zinc-air fuel cells, but that is a very early-stage technology — more of a science project than a marketable product. And in any event, supply concerns over lithium seem premature until the batteries are perfected and costs come down. No one knows if the technology will catch on, and quantifying future demand is tricky. "It's more of an issue of getting the technology out on the market so we can verify people want to buy these vehicles," Wu says. "Right now, it's hard to tell if demand is going to be 10,000 or one million vehicles a year."
By Joe Castaldo
Joe Castaldo is a staff writer for Canadian Business. He joined the magazine in January 2007 and has written about a variety of topics, including management issues and investing. For Canadian Business Online Joe writes about clean technology — companies, tech developments, and environmental policy and investing. More stories by this author >>
Lithium ion batteries have become the standard power source for the next generation of hybrid and electric vehicles. The technology is the best option so far for storing energy without taking up too much space or adding excess weight — and at a price manufacturers say will be affordable for the masses. But there might be a limiting factor to this paragon of power: lithium is a natural resource like any other. "There are concerns out there about whether there's enough lithium to support this new industry," says Ying Wu, a senior analyst with Lux Research Inc. in New York, which focuses on emerging technologies.
The recession has slowed down development of both hybrid and electric vehicles, but Lux is still projecting growth in energy storage. It estimates the market for batteries for plug-in hybrids will expand to US$756 million by 2013, and to US$539 million for pure electric vehicles; lithium ion batteries will account for nearly all of the market. That could put a strain on a commodity whose use right now is limited mostly to glass, and batteries for laptops and cellphones. The battery is already the most expensive component of plug-ins and EVs. (The battery pack for the Chevy Volt costs about US$8,000.)
The need for lithium has prompted some companies, such as Tokyo-based Mitsubishi Corp., to investigate untapped reserves in Bolivia, which contain 5.4 million tonnes of the element, according to the U.S. Geological Survey. That's nearly half of all the known lithium in the world, and more than is in Chile, the world's largest producer.
But supply worries may still turn out to be unfounded. "Companies are concerned, but they're wrong," says Edward Anderson, president and CEO of TRU Group Inc., a research and engineering consulting firm with offices in Toronto and Tucson, Ariz. TRU released a study earlier this year projecting lithium use to 2020 and found there will be no supply constraints — provided new production comes online. Bottlenecks will start in 2012, and demand will outstrip supply by 2019 without new sources of production. Still, Anderson says the attention on Bolivia and the country's salt lake, Salar de Uyuni, has been unfounded. "Not enough work has been done to say that Uyuni is a large resource or not," he says. Instead, new lithium supply is likely to come from other South American countries, such as Argentina, where a company called Rincon Lithium is developing an extraction project, and from China, where two plants are now in production. Companies in both countries are having problems, Anderson concedes, but he is still optimistic — at least in the short term. "If Rincon comes on stream and the Chinese correct their problems, there should be reasonable balance through about 2017," he says. The market will then tighten, even with new production, and what happens after 2020 is anybody's guess, Anderson says.
By that time, new technology could supplement or replace lithium ion. Wu points to zinc-air fuel cells, but that is a very early-stage technology — more of a science project than a marketable product. And in any event, supply concerns over lithium seem premature until the batteries are perfected and costs come down. No one knows if the technology will catch on, and quantifying future demand is tricky. "It's more of an issue of getting the technology out on the market so we can verify people want to buy these vehicles," Wu says. "Right now, it's hard to tell if demand is going to be 10,000 or one million vehicles a year."
I would like to add to the comments of Mr. Edward Anderson on the subject of lithium availability.
ReplyDeleteAn update of a National Research Council Report prepared in the 1970's estimates global reserves and resources of lithium of approx. 30 million tonnes (equivalent to approx. 160 million tonnes of lithium carbonate, the principal feedstock for the lithium used in lithium ion batteries).
These estimates were used by both FMC and Chemetall in their presentation at a recent lithium conference in Chile but SQM, the thrid major chemical producer used the higher figure of 190 million tonnes of carbonate (35.7 million tonnes Li). Chemetall also pointed out that reserves and resources at current and proposed operations total 74 million tonnes of carbonate.
With lithium ion battery demand being 0.6 kg per kWh, one million tonnes of recovered lithium is sufficient for about 550 million Chevrolet Volts.
Chemetall also pointed out that at a battery cost of 500 Euro per
kW/h the carbonate cost in the battery is less than 1% of the total cost.
If, therefore, sources with production costs higher than at current operations have to be developed to meet a massive increase in demand the impact on battery costs will be minimal.
Mr. Anderson is also correct in his comments on the Salar de Uyuni. The resource has a low concentration of lithium, the brine has a high magnesium content which complicates recovery and net evaporation rates are significantly lower than at the Salar de Atacama in Chile, currently, the world's leading source.
Despite all the journalistic hype surrounding its possile development ("The Saudi Arabia of Lithium" etc.) it contains only one eigth of the currently known resources.