Tuesday, March 15, 2011

Lithium Supply: Avoiding a lithium dependence tnr.v, czx.v, lmr.v, rm.v, alk.ax, sqm, cgp.v, abn.v, ura.v, nup.ax, usa.ax, srz.ax, fmc, roc, lit, li.v, wlc.v, clq.v, res.v, ree, avl.to, nsany, f, gm, rno.pa, dai, byddf, hev, aone, vlnc

  We are monitoring the M&A situation in the Lithium market space here - everybody would like to find the next Orocobre just before Toyota was buying into it.

"Nothing is changing under the sun in the US Corp. so far - America is under the oil lobby stronghold and if you would like to understand the real situation, just talk to the junior miners in Lithium and REE sectors. Chinese, Koreans and Japanese companies are the only one on the road now, buying all available projects in Lithium and REE space.

  Facebook is great, but how are we going to drive in five years time? What are we going to eat for that matter with Oil above 150 dollars again?
There is almost no money available now in U.S. or Canada to advance the Lithium and REE exploration, apart from few names everybody is talking about now. The rest of the sector will be funded by the Asian interest in the end."


Avoiding a lithium dependence

Electric cars could remove our dependency on foreign oil, but could we find ourselves depending on other resources in equally short supply?

The complex electric motors and batteries in electric vehicles require some esoteric components and chemicals to make them work. One such chemical is the lithium used to produce the high-energy-density lithium-ion batteries. Although lithium only makes up 3% of the battery and the components are fully recyclable, the chemical holds the key to moving battery production forward.

Estimates vary on the amount of lithium in the ground, but auto executives have estimated that demand could exceed supply in a decade or so. No wonder, then, that auto firms are starting to get into the mining business. Toyota took a 25% stake in a joint venture with Australian mining firm Orocobre a year ago, with the intention of developing Argentinian supplies of lithium.

This isn't the only element in short supply. Supplies of the 17 rare earth elements on the periodic table are becoming very constrained thanks to restrictive trading policies by the Chinese government. Most of the rare earth elements used in the world today come from China, which has the richest reserves. The exotic elements are used in critical areas such as the creation of very strong, permanent magnets. These magnets are crucial to the production of highly efficient electric motors, as used in electric vehicles.

China cut export quotas for these valuable materials to sustain its own industries. As a result, prices have soared on the markets, making manufacturing costs higher.

With these challenges on the horizon, auto manufacturers face significant supply problems. They must either move away from dependency on these materials by developing others to replace them, or match constricted supplies of these materials to their production schedule. Luckily, the market for electric vehicles is still relatively small – but for how much longer? DB"
Enhanced by Zemanta
Post a Comment