Lithium, Electric Cars, and the New Battle for a Natural Resource

Recently, Bloomberg news reported that a Senator in Chile insisted that his country be more pro-active in taking control of its vast lithium metal deposits (September 30, 2009). So, why would Chilean Senator Nuñez suddenly be so passionate and possessive about the lithium lying in his country... and, better yet, why is this news? Maybe there's been a dramatic rash in cases of manic-depressive disorder since our last lunar eclipse. Has this caused lithium demand for psychopharmacological purposes to peak like never before? Or, with expected temperature rises from global warming, perhaps people have been scurrying to their nearest Home Depot, grabbing as much (lithium-based) heat-resistant glass as possible. Well, actually, the Senator's actions are more likely related to the remarkable rise in lithium demand for their essential role in building... electric cars. How's that, you ask?

Well, more specificlally, a great deal of lithium is needed for the vast production of the lithium-ion batteries currently being utilized for the expanding market of electric cars. And, unless you've been stuck under the transmission of your internal-combustion engine for the past several months, you know that the latest full- and hybrid-electric cars are just about ready to break out of their exclusive niche auto shows and roll into the showrooms of your local car dealerships. As developed countries' concerns for green technology and energy independence peaked in the past few years, both start-up electric car companies and the established big cheeses have pushed their pedal to the metal in creating efficient, progressive, and (almost) cost-effective electric vehicles to sell to the everyday American family.

We began using much smaller lithium-ion batteries for mobile phones and laptops around ten years ago. The advantage of the lithium-ion battery over traditional lead/acid or zinc batteries is its rechargeable nature and its high energy-density and electrochemical potential. According to some estimates (australianlithium.com, others), a typical lithium-ion cell can generate approximately 3 volts while a lead/acid battery cell generates 1.5 volts. Companies such as Boston Power, A123 Systems, and South Korea's LG Chem have researched, developed, and improved innovative changes to the lithium chemistry of these batteries, as well as the electronics that control them, over the past few years. They have done so with hundreds of millions of dollars in funding backed by such conglomerates as General Electric, General Motors, NEC, and Chrysler.

The results. General Motors will roll out the most talked-about of these lithium-ion battery-based all-electric cars, the Chevrolet Volt (or Ampere, as sold in Europe) in local showrooms in late 2010. According to the latest estimates by U.S. News & World Report (accessed October 10), the price will be at $40,000, with a $7,500 federal tax rebate available after that price. Mitsubishi's all-electric i-MiEV will also go on sale next year, but, first, only in Japan. The Economist estimates Mitsubishi's model to have a price tag of $49,000, which could be cut nearly in half by the time the car goes on sale overseas. The Tesla Roadster was one of the first full-scale electric cars to go on sale for the general market, in 2007. The Roadster can reach 60 mph in just four seconds and boasts a top speed of more than 130 mph. The "general market" is a term used more loosely for the Tesla car as it costs a mere $121,000, not typical spending for the American family adjusting from Aerostar to SUV to plug-in electric mobile.

In addition to the Volt and i-Miev, other electric cars are expected to arrive from Toyota (unsurprisingly), Fiat, Renault-Nissan (the "Leaf" may launch in 2010), and Daimler. Although the American public may not trade in its entire fleet of internal-combustine vehicles for all-electric ones as fast as some of us traded in our Clunker Cars for cash earlier this year, there will be a gradual paradigm shift across the automobile purchasing landscape over the next twenty years, according to various studies and estimates.

As Yahoo News reported, Renault chief Carlos Ghosn believes that by 2020, electric cars will make up more than 10 percent of the entire car market, and that with the company's strategic alliance with Nissan, Zero Emissions vehicles are the group's top strategy in the ongoing battle against CO2 emissions. Oliver Wyman consultancy, in a study released last month (September 2009), believes the market share will jump to 16 percent by 2025 and climb further after that, while IDTechEx, a research consultancy form Cambridge, England, states that electric vehicles will penetrate the market rapidly to constitute 35% of the cars made in 2025. And, if we continue manufacturing the batteries needed for these electric cars similarly to the way we manufacture these batteries today, that's a whole lot of lithium that will be needed in the beginning of the supply chain. No wonder some in Chile's government are anxious to pounce on this resource.

Lithium - now considered a "strategic mineral" - can primarily be found in the bone-dry Atacama Desert that covers parts of Bolivia, Argentina, and the aforementioned Chile. There are some lithium reserves in the United States, China, and Australia. However, according to the United States Geological Survey (USGS), nearly half the world's known reserves are located in Bolivia, and just two brine operations in Chile currently dominate the world market. SQM and Rockwood Holdings are the two mining enterprises very much enjoying the spoils of this lithium rush at the moment with their envious excavation operations in this Atacama Desert in northern Chile.

The increase in demand for lithium with lithium-ion-battery-based electric cars has some of the public concerned about a potential "Lithium Cartel" akin to the current OPEC oil group that has caused many fits, price problems, and resource struggles over the past century or so. As Norman Hardie of Toronto, Canada recently wrote in a published letter to The Economist (September 17), "Although lithium is relatively abundant the largest reserves are found in Bolivia, and Russia has sizeable deposits. We should give the issue more consideration before we swap a dependence on oil for a lithium cartel led by Hugo Chávez's friends." Well, while Bolivia's President Morales may say hostile things at times about his slightly larger neighbor to the north, Chile always tries its darndest to make economic, trade, and political alliances with the United States a top foreign policy priority. It will be quite interesting to see how the race for this resource pans out.

And, actually, in a recent August article of Scientific American online, some researchers have discovered that these lithium-ion batteries powering our laptops and electric cars might be better improved by adding a compound containing boron and flourine. Oh no. Well, now then, I guess we have to get a jump on the vast Boron reserves of Turkey and the Flourine reserves that are found.... actually, everywhere. Can't we all just quietly humm in our zero emissions family-size go-carts and get along?

Sources:

Australian-Lithium.com. "About Lithium: A Vital Component of the Electron Economy." http://www.australian-lithium.com/about-lithium.html, 2009.
The Economist, "The electrification of motoring. The electric-fuel-trade acid test." 5 September 2009.
Matt Craze and Michale Smith, "Chilean Senator Proposes Government Control of Lithium Deposits." Bloomberg. 30 September 2009.
U.S. News & World Report: Rankings & Reviews. "2010 Chevy Volt." http://usnews.rankingsandreviews.com/cars-trucks/Chevrolet_Volt/
Mitsubishi Motors. i-MiEV. Innovations. http://www.mitsubishi-motors.com/special/ev/4innovations/index.html
Tesla Motors. http://www.teslamotors.com/
Simon Boehm, "France launches 'battle of the electric car'". AFP, Yahoo News. 1 October, http://news.yahoo.com/s/afp/franceautoenvironmentelectricsector
Christoph Hammerschmidt, "E-cars have a long way to go to become competitive, researcher says." EE Times, Deutschland. http://eetimes.eu/germany/219700477
Dr Peter Harrop and Raghu Das, "Hybrid and Pure Electric Cars 2009-2019." IDTechEx consultancy, http://www.idtechex.com/research/reports/hybrid_and_pure_electric_cars_2009_2019_000227.asp
USGS. Minerals Resources Program. Lithium. http://minerals.usgs.gov/. 2007
The Economist. Letters. "A levy on the Chevy." 17 September 2009.
Jenny Mandel, "Building a Better Lithium-ion Battery." Scientifc American, reprinted from Greenwire. 24 August 2009, http://www.scientificamerican.com/article.cfm?id=electric-cars-lithium-ion-battery-boron-fluorine