Tuesday, September 29, 2009

Lithium: Precious Metal TNR.v, CZX.v, SQM, ROC, FMC, AVL.to, RES.v. CLQ.v, WLC.v, RM.v, LI.v, F, BYDDY, NSANY, TTM, TM, FXI, FCX, LUN.to, HUI, XAU,




"Electric Mobility Revolution is happening, it is Lithium, it is safe and it is coming fast. We have met with designers and engineers, we have grilled Lithium batteries' developers and driven Tesla - Energy and Drive are Electric and Eco is the main theme at Frankfurt Motor Show this year."




Battery-powered electric vehicles may be heralded as the next big thing, but will lithium reserves that are already being devoured by consumer electronics be enough meet future demand? Rebecca Wright reports
Forget peak oil, could the next burning issue be peak lithium? If the hype surrounding electric vehicles (EVs) turns into reality then huge quantities of this element are going to be needed. And, as they race to secure future supplies, a battle looks set to commence between the automotive and consumer electronics industries.
General Motors has the Volt, Nissan the Leaf. In fact, nowadays it's hard to find a carmaker that doesn't plan to launch a battery-powered EV or plug-in hybrid in the next five years. Although the predicted take-up of these cars varies, from the modest one million sales per year in 2020 from market forecasters IHS Global Insight to Nissan's ambitious forecast of ten times that, it is clear that demand will increase considerably from the 5,000 sold in 2008. Meanwhile, global sales of conventional hybrid cars are expected to surpass the one million mark in 2010, double what was sold in 2008, and will continue to grow in popularity thereafter.
Just as lithium batteries now dominate most portable consumer electronic items such as laptops and mobile phones, lithium ion batteries look set to take over from the nickel metal hydride chemistries that are currently used in most hybrid and EV applications. This is for several reasons, not least the fact that lithium is not toxic, it has a high specific energy content and it is currently cheap and readily available.
But concerns have already arisen about the sustainability and availability of lithium. One of the most detailed studies to date in this area has been carried out by French consultancy Meridian International Research, in a series of reports entitled The Trouble with Lithium. One of the key findings was that if demand from the portable electronics sector continues to grow at 25% per annum, as it has done in recent years, by 2015 there will only be 30,000 tonnes of high-purity lithium left for the automotive industry. This, it says, would be sufficient for less than 1.5 million GM Volts or similar EVs worldwide. "Realistically achievable lithium carbonate production will be sufficient for only a small fraction of future plug-in hybrid and EV global market requirements. Therefore other battery technologies that use unconstrained resources should be developed for the mass automotive market," the report warns.
This sobering outlook is based on Meridian's estimates that global recoverable lithium reserves total only around four million tonnes. Although the US Geological Survey (USGS) estimates a reserve base of 11 million tonnes, Meridian claims that the majority of these either have unfeasibly high production costs or abysmal production rates.
Around 70% of the world's lithium deposits are located in the so-called Lithium Triangle, an area of salt flats on the borders of Chile, Bolivia and Argentina measuring less than 43,000km2 in surface area. Presently, over half of the world's lithium needs are mined from the Chilean salt lakes in that region, with a small quantity also coming from Argentina. The single largest lithium deposit in the world though lies in Bolivia's Salar de Uyuni salt flat, the largest in the world and an area that to date remains untouched. Described as the world's largest natural mirror, Salar de Uyuni is the brightest object on the Earth's surface visible from space, and is often classified as one of the seven Natural Wonders of the World. Bolivia's socialist president Evo Morales has so far blocked foreign companies from gaining access to its reserves, and instead is trying to nationalise all mining activities in the country. Either way, the ecological damage caused by large-scale mining of this unique ecosystem, which is a flamingo breeding ground, would be significant. "Mass production of lithium carbonate is not environmentally sound. Lithium ion propulsion is incompatible with the notion of the ‘Green Car'," Meridian declares.
The world's other lithium sources are no less controversial, with a sizeable proportion currently derived from salt lakes in and around Tibet, which is all mined by the Chinese. Meridian estimates China to have the potential to considerably increase its lithium production capacity in the future although it notes that this will almost certainly be reserved for its own EV industry. Although North America has some relatively small lithium mining activities of its own, mainly in Nevada, the reality is that the US and the rest of the world will become increasingly reliant on South American lithium production, which could have immense geopolitical implications, not least considering the already strained relations between Latin America and the USA.
While carmakers have so far said little about the sustainability or political aspects of lithium, they do not appear worried about availability. "We will never run out of lithium. It's not like you have with precious metals, which are finite," says General Motors' man in charge of EVs, Frank Weber, pointing to the potential that exists to extract lithium from sea water, which has in the past been considered a virtually inexhaustible source of the metal. Critics – Meridian included – claim that this method of extraction would not only be prohibitively expensive and even more ecologically unsound than to mine the metal from precious ecosystems but that it would have to be carried out on a pharaonic scale before meaningful quantities of lithium were realised.
Nissan is equally blasé, sticking with the USGS's lithium supply estimates and apparently ignoring the implications for lithium demand that the billions of potential iPhone customers in China and India could one day have. "We estimate the global lithium resource to be around 11–14 million tonnes," the company says. "If, as we expect, the world EV market will be around 10 million units by 2020 there will be sufficient lithium stocks for approximately 350 years."
Tom de Vleesschauwer, associate director of consulting at IHS Global Insight confirms that none of the other major original equipment manufacturers appear to consider lithium supply – or lack off – as a cause for concern right now either: "Of course we have heard horror stories of limited supply and reliance on a few countries, but in reality the usage for plug-in hybrids and EVs will not be a huge drain on the lithium reserves out there." De Vleesschauwer points out that not only are the automotive and battery industries working on initiatives to recycle lithium from disused EV batteries and to create secondary markets for them, but it is still possible that other strong battery chemistries will emerge to sit alongside or even rival lithium ion.
It remains to be seen to what extent lithium will be in short supply in the future, but it would be surprising if some kind of battle did not ensue between the automotive and consumer electronic industries as each looks to secure its future needs. While an EV battery could require 3,000 times as much lithium as a mobile phone battery, there will be hundreds of millions more phones sold globally than EVs. The price of lithium is already on the rise – as of mid-2009, it was around $6,600 (€4,600) a tonne, compared to $2,500 at the start of the decade.
Meanwhile, it is starting to look increasingly like the EV may not be the panacea that the car companies have so desperately been searching for either. Despite all its bullishness over the supply of lithium and the promise we have been told that EVs and plug-in hybrids will bring, the automotive industry must surely be starting to ask itself now whether an environmentally-friendly car or fuel really does exist.
Lithium — the lowdown
A white/silver alkali metal, lithium is the lightest metal on earth. Although it occurs in many rocks and brine deposits, such sources are often of little commercial value because the lithium is in low concentrations or is of low grade. For this reason, lithium could be considered a comparatively rare element. To be suitable for use in car battery applications, lithium must be turned into high-purity (99.95%) Battery Grade Lithium Carbonate — an even rarer compound.
China's Green Cars
Whatever the state of global lithium reserves, it's a fair bet that the US, China and Japan will compete to secure supplies over the next decade. To compete with GM's Volt, Honda's Prius and Nissan's Leaf, Chinese battery and automobile manufacturer BYD is making a splash with its first plug-in hybrid and plans to release two all-electric models later this year.
Founded in 1995 in Shenzhen by chemist Wang Chuanfu as a rechargeable battery manufacturer, BYD targeted Sony and Sanyo as its competitors. By using inexpensive manual labour rather then pricy mechanised production, BYD reduced battery prices and, within five years, became one of the largest battery makers in the world. In 2003, Wang acquired Tsinchuan Automobile Company, and began developing the technology for EVs. By July 2009, BYD Auto was the top independent automotive brand in China, according to the Chinese Association of Automobile Manufacturers, with 33,860 units sold, 22,183 of which were its F3 sedan, making it the month's best-selling sedan in China.
But BYD sees a future in EVs and is confident that both its all-electric and dual-mode (plug-in electric with a back-up gasoline engine) will be able to compete with the models of better-known international companies. Listed on the Hong Kong Stock Exchange at a market value of €2.65bn, and with net profits for 2008 around $187m (€130m), BYD Company Ltd is on the up. Globally, its corporate profile was further bolstered when Warren Buffet bought 10% of the company in 2008. And BYD's transformation from cell phone battery maker to car maker to electric car maker in under 15 years shows an adaptability and innovative approach that suggests that, even in the event of a lithium shortage, BYD will find creative ways to deal with it."

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