Lithium's uncertain future overshadows electronic device, EV markets

By: Steve Thursday July 31, 2014 0 comments Tags: battery technology, electric vehicles, lithium


Editorially speaking with Steve Porter

Lithium, a substance increasingly used to power cell phones, laptops and electric vehicles, appears to be key to unlocking a future of ever more powerful and longer-lasting electronic devices and a transformed transportation system.

Just last year, researchers at the University of Illinois at Urbana-Champaign announced they had developed a new lithium-ion battery technology potentially 2,000 times more powerful than comparable batteries and able to be charged 1,000 times faster than conventional lithium-ion batteries.

And just this week (July 30), a team of Stanford University researchers - including former U.S. Energy Secretary Steven Chu - announced they had achieved the "holy grail" with a new lithium battery design that could boost the range of an electric car to 300 miles.

Breakthroughs in lithium battery technology and a constantly growing demand for the metal is driving up its price and unleashing a race to corner the known market.

In mid-July, Louisiana-based Albemarle Corp agreed to purchase New Jersey-based Rockwood Holdings -- previously the world's largest lithium producer -- for $6.2 billion.

It was by far the largest deal in the history of buying and selling lithium, dwarfing the previous record purchase of Australia's Talison Lithium Ltd. - owner of the world's largest open-pit lithium mine - by a Chinese company for $673 million in 2013.

Albemarle is now without question the leader among  just four companies that control about 90 percent of the lithium world market.

That near monopoly is good news for the major lithium producers, with lithium's demand expected to double within the next decade, growing by 7 to 10 percent annually.

But is it good news for the consumer?

Market analysts generally agree that supply-and-demand for lithium is currently fairly balanced, but that could change dramatically in the next few years -- especially as automakers increasingly respond to the public's desire to dump the pump and get more clean electric vehicles on the road.

Boulder-based Navigant Research recently released a report, "Electric Vehicle Batteries," saying worldwide revenue from lithium-ion batteries for consumer electric vehicles will grow from $5.7 billion this year to more than $24 billion in 2023.

With an obvious growing demand for a relatively scarce supply and just four companies controlling 90 percent of the market, it might be time to ponder how high the price of lithium could go during the next decade and what - if anything - can be done about it.

Certain factors make it difficult if not impossible to predict that price increase. Will there be a radical shift away from lithium technology due to some unexpected non-lithium-based battery breakthrough?

Will the public's desire for electric vehicles continue to be stymied by a lack of EV charging infrastructure?

And will new reserves of lithium be found that will assure a plentiful supply of the stuff? Just last year, it was announced that a lithium deposit had been discovered in southwest Wyoming that could potentially produce 18 million tons of lithium.

For now, availability of low-cost lithium appears to be in balance with demand. But it will be interesting to see what happens as worldwide demand for personal electronic devices and electric vehicles continues to skyrocket while a shrinking number of bottom-line corporations controls its sources.

About the Author: Steve