Lithium’s great story: 80 years in the making
This is not the first time people have been excited by lithium.
The great mass of the investing public has only been on top of the lithium story for little more than a year yet the story has been there for some time, in one form or another. In 2009, for example, Foreign Policy journal, in an article by David J Rothkoff, had a headline reading “The Great Lithium Game”.
He began: “In Asia, Europe, and the United States, people are getting excited by the electric car – for good reason”. He went on to argue that the ”major fly in the ointment for the electric car is the battery”. Seven years ago there was just starting to be interest in the concept of the lithium-ion battery, then being used in cameras, cellphones and computers, as the solution to electric car storage.
Rothkoff got is right in predicting that lithium was likely to be the commodity in the years immediately ahead. He also raised another interesting point, and one that is becoming a very live issue right now.
At that stage, it was estimated that three-quarters of the world’s known lithium reserves were located in the Atacama Desert, a region shared by Chile and Bolivia. Chile, by its defeat of Bolivia in the War of the Pacific that raged between 1879 and 1883, ended up grabbing the chunk of Bolivia that sat on the Pacific coastline (making Bolivia a landlocked nation), and that lost territory is host to a great deal of lithium. So it is interesting that last year the International Court of Justice ruled it can hear Bolivia’s case for the return of its access to the sea, and that case is expected to last between one or years before there’s an ICJ decision (although whether Chile would abide by an unfavourable ruling would have to be seen). In 2009 Rothkoff thought conflict between the two Latin American states would likely send consumers looking for less efficient batteries than lithium-ion ones, probably the nickel-metal hydride battery.
(That no longer seems a concern; rather, as my colleague John Petersen has explained in great detail, the main threat to the lithium-ion battery is lack of supply of cobalt.)
By 2010, the New York Times was on the story, noting that for may years “few metals drew bigger yawns than lithium, a lightweight element long associated mostly with mood-stabilizing drugs”. The story by 2010, though, was all about lithium’s role in powering hybrid cars, with Toyota already backing an Argentine brine project. At that stage, about 60 mining companies were involved in projects in Argentina, Serbia (what happened to those?) and Nevada.
Lithium started to register as an industry in the 1930s, when mining was under way in the US and simple processes made lithium into compounds in glassmaking and alkaline storage batteries. In the Second World War, there was a boom with lithium hydride being used as a source of hydrogen gas.
The US had produced 175,000lb of lithium compounds in 1939, and that total grew during the war, but the business fell away after the end of the war. In 1948 demand started booming again, so that by 1952 the market had grown to 2,175,000lb. At the time London’s The Financial Times attributed this growth to lithium’s use in atomic power and rocket fuels. (Interestingly, that 1954 article was more focused on spodumene rather than Latin America’s brine: the paper identified the main potential sources of lithium as the Black Hills of Dakota, the Kings Mountain district of North Carolina and parts of Canada).
There was a 1953 report in various US newspapers that lithium compounds were being used at the rate of 3,300,000lb, the biggest uses being use radio and television tubes, ceramic glazes, air-conditioning and refrigeration, and defence and pharmaceuticals. The reports noted that 36 companies in the Long Lac and Port Arthur mining districts of Ontario were involved in lithium projects, and another 25 in northwest Quebec.
The story of lithium was a long time hatching, even if you look only this present century; it has in common with rare earths and graphite a long history before the markets began to notice and take interest. And in each case that realisation is followed by a feeding frenzy.
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