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Lithium Economics

Revisiting Peak Lithium or Lithium in Abundance?

By Juan Carlos Zuleta Calderón

Open Access Article Originally Published: June 24, 2008

Editor's Note: We continue to publish the responses of the three principals in the "how-much-lithium-is-there-really" debate in an effort to reach a consensus on the true nature of lithium availability since the automotive industry now appears to be putting many of its 'eggs' in the lithium-ion battery basket. We are certain that this isn't the end of the discussion.

As Mr. Evans suggests in his  Lithium Reserve Rebuttal, my preference for Don Garrett's figures was apparently not justified. In my defense, I can only say that this had to do with my limited understanding of a rather alien issue to my profession.

Nevertheless, after reading William Tahil's new version of " The Trouble with Lithium," including his latest estimates of lithium resources, recoverable reserves, and potential chemical-grade lithium carbonate production to 2020, doubt remains in my mind as to the real value of Evans' data. It seems like the 30-year old reserve numbers he refers to have been now seriously challenged. I suspect he will have to devote some time to respond to this new attack, although the battleground may no longer be only geological. It now appears to pertain also to mining.

Since I declare myself a neophyte on both subjects, for the time being, at least until Tahil's victims of his recent strike react, I shall refrain from making further comments on them. I do have to make one point though regarding Evans' comment on the USGS figure of current demand for lithium. He says that this number "includes the tonnages of lithium contained in ores and ore concentrates sold to the glass and ceramic industries and thus nothing to do with chemical demand". If that is the case, I wonder why in the abstract of his paper he specifically compares this figure with both total reserves of lithium equivalent (or lithium carbonate) and total lithium reserves (or lithium carbonate) at active or proposed operations, including, in each case, lithium from ores, brines and hectorites. To be correct, therefore, Evans might well have compared his 16,000 tonnes Li with 20.1 million tonnes of lithium equivalent (approximately 152 million tonnes of lithium carbonate) to be extracted from brines and hectorites only.

One last comment concerns Evans' agreement with the two caveats in Tahil's approach I advanced in my paper. Here he erroneously refers to "other correspondents" as having made the point that adoption of lithium batteries will be gradual and that major battery breakthroughs could result in less use of lithium and thereby lighter batteries.

In his new version of "The Trouble with Lithium", Tahil refers only once to my article to put Bolivia's intention to produce 1,000 tons of lithium per month beginning 2013 into question and not precisely to respond to my comments. However, in an email sent to Bill Moore, others, and me on June 15, 2008, he makes clear that 1.4kg of lithium carbonate is required per kWh battery capacity and that the claim that either 0.43 or 0.46 kg of lithium carbonate per kWh is sufficient assumes an unachievable (83%) efficiency level and for that reason "is a canard". Thus here he touches, albeit slightly, my second point of criticism and gives me the opportunity to respond. But before I proceed to do so, let me return first to Tahil`s new reserves estimates which I found to be astonishing, to say the least.

In sum, he claims that a "more thorough consideration of the Salar de Atacama and Salar de Uyuni shows that global recoverable lithium reserves are only in the order of 4 million tonnes". This estimation of reserves lowers previously known figures substantially. This is most evident in the case of Atacama where USGS reserve base [1] and USGS reserves [2] numbers are reduced from 3MT down to 1MT of lithium content. Tahil here seems to suggest that what the USGS calls reserve base and/or reserves in Salar de Atacama, should be taken as resources [3].

Furthermore, in page 18 of his paper, Tahil defines resources as "the amount of metal claimed to be geologically present", and reserves as "how much of that resources in place one can realistically extract and produce". I wonder what the USGS has to say about these "new" definitions.

Tahil then follows the same approach to lower the reserve base of the Salar de Uyuni. He argues that the figures stated by Evans (5.5MT), Bolivian and other sources (9MT) or the USGS (5.4MT) correspond to "the total Lithium metal resource estimated to be contained in the Salar, not recoverable reserves". After explaining why the Salar de Uyuni, while being the largest single deposit of lithium in absolute size, is not the largest deposit of lithium in the world in terms of its economically recoverable lithium content, Tahil concludes that "the real exploitable reserve is therefore only in the order of 300,000 tonnes of Lithium, not several million tonnes".

The following factors describe Tahil's argument. First, the Salar de Uyuni has a high Mg: Li of 18.6:1, three times higher than the Salar de Atacama, which makes it more difficult to produce lithium.

Second, the concentration of lithium varies extensively in different parts of the salt lake and the area of highest lithium density (above 1000ppm) is a small area (280km2) in the southeast where the Rio Grande enters the salar, whereas the central halite (i.e. rock salt) nucleus of the Salar de Atacama is 1000-1400 km2 in area.

Third, the solar evaporation at Uyuni is 1,500mm per year, less than 50% of the rate at the Salar de Atacama, which again makes the extraction and production of lithium more costly.

And fourth, because the brine containing the halite layer of lithium in the Salar de Uyuni is "only 11 meters thick at the thickest point and only 2 m to 5 m thick in the area of high lithium concentration," rather than 35 meters as in the Salar de Atacama, the amount "of lithium available per unit of surface area is much lower" and a much larger area is required "to be exploited for an equivalent lithium production".

Based on the above considerations, Tahil sustains that "it is highly unlikely that anything like 60,000 tpy of LCE will be produced from the Salar de Uyuni in 2013" and that "a more realistic assessment might be 10,000tpy by 2015 and 30,000 tpy by 2020". To the extent that this contention questions severely the recently announced Uyuni project, I encourage the Bolivian authorities in charge of such a crucial endeavor not only for the country but for the whole world to respond in due course.

Tahil has again surprised the world. But there is still some reason to believe that his predictions should be taken with caution. This leads me once more to my two original criticisms of "The Trouble with Lithium", version 1 which appear to be relevant for version 2 as well.

To begin with, Tahil attacks lithium battery technology suggesting instead other batteries (i.e. ZnAir and Zebra NaNiCl / NaFeCl) as a more viable solution for the transition to electric propulsion in the global automotive industry, one of his arguments being that if lithium carbonate demand from the portable electronic sector maintains its current high growth rates during the next ten years, intense competition will arise between this sector and the automotive industry for supply of LiIon batteries. In my opinion, this conflict will have to be resolved in the market place. Given the importance of the automotive industry in the global economy, the dispute for lithium batteries is likely to be resolved in favor of this industry.

In this sense, the electronic sector may have to take recourse to the kind of batteries that Tahil is pushing so hard to be used for electric vehicles until the supposed shortage of lithium is taken care of with the aid of course of technological development. If those batteries are so good, then why cannot they be commercialized first in the electronic sector? Besides, as I mentioned in my original paper, during the transition to electric propulsion lithium will not be alone in powering the new green cars; many old batteries are and will still be viable options and many more will appear to face this challenge. 

Some of my commentators have even suggested that we probably should not be so sanguine about the absolute disappearance from the face of Earth of all gasoline or diesel vehicles (particularly trucks) in the next decade or so, as Tahil seems to suggest. In this context, I have argued that lithium will take over the energy market only gradually in the course of the next 20 years or so as a key factor of the new techno-economic paradigm in the world; until then, many energy technologies will co-exist. So in a way, Tahil appears to completely miss the technology picture here.

This sends me directly to my second criticism of Tahil, namely that as major battery technology breakthroughs are accomplished less and less lithium will be required for powering electric vehicles. As I mentioned above, Tahil has argued that current lithium batteries require 1.4 kg of LCE per 1kWh. This is based on his own presupposition that, "as a rule, rechargeable batteries realize about 25% of the anode`s theoretical capacity …".

Hence "any battery company that claims [it] can realize 83% of the electrochemical equivalent of Lithium [has] made a stunning breakthrough which should already have made headlines worldwide". But lithium battery technology breakthroughs have already come and will be coming, especially from the field of Nanotechnology. In fact, researchers at MIT have recently reported that using specialized nanowires in a lithium-ion battery can increase two or three times its energy density and just a few months ago another different group of researchers at Stanford have discovered that nanowires can hold ten times the charge of existing lithium-ion batteries). I can only hope that these breakthroughs will tend to reduce the amount of lithium required per kWh of battery capacity.

One last point I want to make in this rejoinder concerns the main factors that in my view may determine the final adoption of lithium batteries in electric cars. In economics jargon, this relates to the sources of technical change or technological innovation. It goes without saying that the three factors I identify and explain below can only be taken as part of a longer list in process of elaboration.

In this sense, the first factor is, of course, the market. The currently high levels of oil prices clearly explain why more and more consumers are willing to switch to hybrid, plug-in hybrid and all-electric cars.

Technological development constitutes the second factor. Here we need to look at the  recent advances in lithium battery technology, such as the ones reported by General Motors and Nissan

Finally, the third factor is perhaps the most complex one. It has to do with resistance to technical change. In this case, I refer to governments, companies, and individuals with vested interests to prevent the emergence of lithium battery technologies mainly because this will put at serious risk their current or future privileges or advantages. I let the reader decide which governments, companies, and individuals I am talking about here and whether they will be strong enough to stop the transition to electric propulsion with lithium batteries in the global automotive industry.

Notes:

[1] That part of an identified resource that meets specified minimum physical and chemical criteria related to current mining and production practices, including those for grade, quality, thickness, and depth. It is the in-place demonstrated (measured plus indicated) resource from which reserves are estimated. It may encompass those parts of the resources that have a reasonable potential for becoming economically available within planning horizons beyond those that assume proven technology and current economics. It includes those resources that are currently economic (reserves), marginally economic (marginal reserves), and some of those that are currently subeconomic (subeconomic resources). The term "geologic reserve" has been applied by others generally to the reserve-base category, but it also may include the inferred-reserve-base category; it is not part of this classification system.

[2] That part of the reserve base which could be economically extracted or produced at the time of determination. The term reserves need not signify that extraction facilities are in place and operative. Reserves include only recoverable materials; thus, terms such as "extractable reserves" and "recoverable reserves" are redundant and are not part of this classification system.

[3] A concentration of naturally occurring solid, liquid, or gaseous material in or on the Earth's crust in such form and amount that economic extraction of a commodity from concentration is currently or potentially feasible. 

Also, see all USGS definitions.

Juan Carlos Zuleta Calderón is an Bolivian economist, specialist in lithium trade.  (jczuleta@gmail.com). 

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