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.