Lithium glut? Maybe, but what about after 2020?

There’s been chatter here and there about how much recoverable lithium there is in the world, and whether our move toward electric vehicles powered by lithium-ion batteries will create a “peak lithium” scenario.

It all started with William Tahil of U.K.-based Meridian International Research, who back in January 2007 published a paper questioning whether the automotive sector’s expected embrace of lithium-ion technology for next-generation plug-in vehicles was a wise move. Tahil is a fan of the zinc-air battery, largely because “zinc is the only metal which can sustain large battery production in the volumes required by the global automotive industry.” Needless to say, Tahil’s first report whipped up a firestorm of controversy, as you’ll see from some of the comments in a past post here.

Geologist R. Keith Evans published his own report in March 2008 in response to Tahil. Evans’ conclusion: “Concerns regarding lithium availability for hybrid or electric vehicle batteries or other foreseeable applications are unfounded.” Tahil returned fire four months later with a July 2008 report, arguing that Evans failed to make a distinction between practically recoverable lithium carbonate and resources where lithium concentrations are too low to economically exploit. Evans’ document, wrote Tahil, “is not useful for the industrial and strategic planning purposes of the battery and automotive industries. It confounds geological lithium deposits of all grades and types with economically viable reserves that can be realistically exploited and relied upon as a dependable source of sustainable supply by the mass production scale of the automotive industry.”

Evans, keeping the debate alive, issued a quick retort. He argued that it wouldn’t take much of a price spike to economically recover lithium from spodumene deposits, which Tahil had ruled out. He added that other sources of lithium can also be extracted economically as the price of lithium creeps up, which will be necessary to unlock these reserves. “A rise from the current levels is probably necessary but the cost of carbonate in batteries is a very small percentage of the battery cost,” wrote Evans. “Where hectorites, geothermal brines, oil field brines and jadarite stand on the cost ladder remains to be determined.” Evans also called Tahil’s report “alarmist” and “ludicrious.” Ouch.

Of course, Tahil raises other concerns, such as energy security. It doesn’t make much sense, he argues, to move away from oil and all its geopolitical risk and toward lithium, which offers up another batch of geopolitical risk. China, for example, has its own lithium reserves but it’s unlikely to share that with the west. North America gets its lithium mostly from Chile and Argentina, and while Bolivia has huge reserves, that country is beginning to behave like Venezuela. In fact, according to TIME, both Toyota and Mitsubishi have been knocking on Bolivia’s door, hoping to get in on the lithium action, but nobody is answering. Mitsubishi has said that demand of lithium will outstrip supply in less than 10 years unless new sources are found. (Hat tip to Earth2Tech)

Perhaps Tahil’s assessment isn’t so ludicrous, after all. Besides, it’s not an issue of whether the resource exists, it’s a matter of who holds it, how much of it is accessible, at what cost, and at a given time. We saw what that perfect storm of factors did to the price of oil. And unlike oil, lithium batteries will be part of the cars when you buy them; we’re not talking fuel that you pump in later after the vehicle has been purchased. The question must be asked: How would a rapid, steep climb in the price of lithium affect automotive sales? Even if it was a short-term climb, it could have devastating effects.

Toronto-based TRU Group Inc., a leader in lithium resource research, issued a report last week — commissioned by Mitsubishi — which flicked at some of those long-term supply issues but didn’t seem overly concerned. In the short term, TRU said the economic downturn is actually creating a lithium glut. The market, it wrote, “will be pushed into oversupply this year through 2013. Global use of lithium will decline sharply by at least 6 per cent in 2009 and demand is unlikely to bounce back any time soon as consumers put off buying laptops or cell phones containing lithium batteries.”

Notice that there’s no mention of electric or plug-in hybrid vehicles in this period. The impact of those markets won’t begin to be felt until 2013, before which any introduction of the vehicles will be quite limited. Come 2015 the market will regain momentum:

The long range, however, remains bright because new and large uses for lithium will start having a major impact on demand within the five year horizon: Lithium use in electric vehicle batteries and lithium alloys for aircraft. TRU forecasts that demand will be strong and sustained in these two segments over the long term 2020. The industry does need at least one of the announced pipeline production projects to come into production and also could do with another new project as the market tightens around 2015-2017. New lithium producers still will need to be cost competitive with existing salt lake brine based producers in South America and China. Emerging technology may make some of the undeveloped medium sized (brine) lithium resources quite attractive. Certainly the industry through expansion and development of new resources will have no problem meeting demand.

The company said it would post its full report sometime on Tuesday.

So, does all this make you feel more comfortable with the lithium supply-demand situation? China and Chile certainly can’t complain. That said, this isn’t just about forecasting out to 2020. Lithium needs to support decades of growth in both the consumer electronics and automotive sectors, and while recycling of lithium will help, will it help enough?

That said, unlike oil/gas/diesel, the battery is part of the car and can easily be swapped out with different chemistries. By 2020, who knows what chemistries will lead the energy-storage race? To quote GM vice-chair Bob Lutz: “People keep saying we’ve used up the whole periodic table on battery composition and that lithium-ion is about as good as it gets. I don’t believe that.”

Besides, it’s not only new chemistries that could come along,  so could technologies that blend different chemistries and energy-storage systems. I’ve got a piece today in MIT Technology Review about a new energy-management system developed by Indy Power that can take two or more different batteries/storage systems and balance them off against each other in a way that optimizes both performance and system life. The system is flexible, allowing multiple combinations with only a software upgrade. It means a car could be designed in the future that blends a little bit of lead-acid, a little bit of lithium-ion, with a touch of ultracapacitor.

If it could be manufactured for less than a 100-per-cent lithium-ion vehicle, if it got better performance, and if the life of each battery system was extended as a result, this could be the way to go…

And, of course, there’s always that dark horse EEStor.

8 thoughts on “Lithium glut? Maybe, but what about after 2020?”

  1. Clever to add an EEStor tag as it probably increases hits for an article by ten fold. :-)

    If EEStor does deliver this year, the Li-Ion battery space is going to be a blood bath as some major investments become near worthless over night.

  2. For those interested in lithium reserves and resources please be aware of the Industrial Minerals sponsored symposium (Lithium Supply and Markets, 2009) in Santiago, Chile, commencing on Jan. 26 to Jan. 30th. 2009

    and those interested in (lithium) car battery manufactures please be aware of the forthcoming 26th International Battery Seminar and Exhibit and the 13th International Battery Materials Recycling Seminar and Exhibit both at Fort Lauderdale, Florida on March 16-18th 2009

  3. It sounds like you answered most of the questions you raised within the article- Lithium is a small part of the battery, so even a 5-fold increase in Lithium would not affect battery prices that much- prices that will still go down as manufacturing processes improve in efficiency with mass production. It may cost more to extract, but not on the order of trying to extract oil from shale- there is sufficient Lithium in North America so that battery makers will not be held hostage like we are to oil from OPEC. And, as you also pointed out, a world recession and lack of mass-produced EV’s will leave a glut of Lithium for a few years anyhow.
    And even if Lithium did become a problem, we could still use other battery technologies, including newer, advanced Lead-Acid, if we had to. Perhaps the hybrid Lead-Acid/Capacitor batteres of Axion and CSIRO are some of what you have in mind.
    And who knows- perhaps EESTOR will also arrive sometime between now and 2015;-)

  4. Ah- just read your companion article in Technology Review, where you link to the CSIRO story from January of last year- I had forgotten that was your article as well;-) I saw a couple of months ago, that CSIRO has a contract now with East-Penn Deka Battery in Pennsylvania to manufacture their UltraBattery here in North America- it would be interesting to see a follow-up story on this battery technology with East-Penn. I know I have commented on this before (at least on other blogs;-), but I think car manufacturers are missing the boat by focussing so much just on Li-Ion- I think, at least for a few years until Li-Ion comes down in price, that a good EV could be produced using one of these Advanced Lead-Acid batteries.

  5. My understand was lithium was always intended to be a temp solution. By 2020 there should be something that won’t just help power a car but only be needed to power it. I thought that was the goal all along?

  6. That answer is clearly hydrogen. It’s now becoming a ‘no-brainer’.

    Hydrogen can be created from ANY other energy source ( solar, wind, hydro, fossil…)
    We will never run out of hydrogen.
    You can fill up a car tank in a minute ( compare that with a couple of hours of charging a battery )
    Batteries lose their efficiancy and are unreliable when tring to determine capacity ( worse: losing power at half capacity or less).
    Toxicity: Even if we combust hydrogen ( instead of a fuel cell ) the resulting byproduct is mostly water vapor. Batteries=disasterously toxic

  7. I am not sure about Lithium only being a temporary solution- it may well be the solution- at least for many years to come, and perhaps in a different variation. For example, what is needed is a battery that will last the life of a car, be able to retain most of its power during its lifetime, and be able to be quick-charged. If a battery could be quick charged in 10-15 minutes, than building out an infrastructure to handle that type of electrical output would not be that hard. There are some current Li-Ion variations that may fit this bill, including Lithium-Iron-Phophate (from A123, Valence and BYD in China- also seen as LiFePO4)) and Lithium Polymer (from Enerdel and Altairnano, I believe, along with others). But if these do not, there is a good chance that another variation of the Li-Ion will. This is not say that there won’t another solution- whether a different type of chemical battery, or different type of energy storage- yes, like the ultracapacitor from EESTOR that may or may not come;-)

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