Juan Carlos Zuleta Calderón

Lithium Economics

What is behind Korea´s interest in extracting lithium from seawater?

Apr 10, 2010

South Korea´s recent decision to extract lithium from seawater may be justified by specific economic reasons.

As recently reported by the Financial Times, South Korea's intention to commercially extract lithium from seawater by 2015 only underscores the increasing intensity of the lithium rush in the global lithium-ion battery industry.

That Korea is interested in investing in alternative sources of lithium should not surprise anyone at all. As is well known, LG, one of Korea´s largest companies, is known to possess one of the most competitive Li-ion battery technologies in the world which will be carried by General Motors´ Volt to be launched later this year. There is, though, another latest event that signals the Korean interest. It has to do with Hyundai´s announcement that by the end of the year it will launch the first hybrid car with Li-polymer batteries.

On the one hand, as both GM and Nissan approach the launching date of their Volt and Leaf cars, the electric vehicle market is beginning to take shape On the other, Hyundai´s announcement confirms my original argument that if Li-ion batteries are to be used quite soon in plug-ins and both range-extende d and battery EVs, then why not utilize the m for conventional hybrids as well?

Both pieces of information also come precisely when China just announced that it may cut its Li and rare earth exports.

I wonder what implications, if any, these moves will have on the future of the lithium market in general and on the Bolivian prospects to export its lithium in particular.

Times Article Viewed: 9249

Note.- This is a republication of a blog originally published on EVWorld.com on April 10, 2010.

US Consumers Begin to Favor Electric Cars

Lithium Economics

US consumers begin to favor electric cars

Mar 02, 2010

A recent automotive survey provides additional evidence for the arrival of the lithium era in the world.

In a paper presented at the Second Lithium Supply and Markets Conference held in Las Vegas last January, I further developed a framework originally suggested in a 2008 article to explain the main factors (i.e. oil prices, technological development and resistance to change) that may determine the adoption of lithium batteries for different types of electric cars.

For reasons of space, the third determinant was then examined in relation to governments and companies only. Here I would like to start a discussion about acceptance of/resistance to change by consumers. This is now possible thanks to some interesting information provided by Ernst & Young in its first Automotive Survey measuring the understanding of and interest in plug-in hybrid and electric vehicles in the US published in December 2009. As argued by a recent article, the key findings of the Survey are:

· Roughly 10% of the survey participants said they would consider a plug-in hybrid and electric vehicle purchase.

· 34% of survey participants said they would subsidize local charging stations.

· Public awareness of emerging powertrain technologies remains weak across the US.

· Not many consumers are willing to embrace the new technology prior to it is well-established in the market.

· No other plug-in hybrid and electric vehicle incentive or benefit is considered nearly as important as saving money on fuel.

· Among several considerations, access to charging stations, battery driving range, and vehicle cost are by far the three most significant consumer concerns.

Taken as a whole, these findings give additional support to the kind of arguments I have been advancing for the last two years or so with reference to the inauguration of the lithium era in the world.

First, the Survey results point to many more drivers willing to buy plug-in hybrid and electric vehicles than initially thought. In effect, the above-mentioned percentage translates into about 20 million American drivers favoring that kind of acquisition which is, for example, well beyond President Obama´s target to have 1 million such cars on US roads by the year 2015.

Second, this is further reinforced by the Survey result that more than one out of three Americans would subsidize local charging stations.

Third, as anticipated in my January article, not only the price of oil is perceived as one of the most important factors determining the adoption of lithium batteries but it also does seem to do a great deal with drivers ‘decision to purchase a plug-in hybrid and/or electric vehicle.

Fourth, battery driving range and vehicle cost, which appear among the three most significant consumer concerns when it comes to buying electric cars, seem to be intrinsically related to the technological development of lithium batteries for electric cars.

Lastly, lack of public awareness of electric cars may be only increasing consumers’ resistance to adopting the emerging technology before it is well-established in the market.

Times Article Viewed: 5701

Note.- This is a republication of a blog originally published on EVWorld.com on March 02, 2010.

Exide Technologies in the Lithium-ion Energy Systems Market?

Lithium Economics

Exide Technologies in the Lithium-ion Energy Systems Market?

Nov 08, 2009

Exide`s decision leaves us with some unanswered questions as to what is next in terms of the arrival of the Sixth Techno-economic Paradigm in the world.

As a recent report indicates, Exide Technologies has introduced a new division focusing on “development and pursuit of new markets for renewable energy storage and lithium-ion energy systems”.

This comes as a surprise considering that the company is a global leader in the production and recycling of lead-acid batteries. Does this mean that Exide has just discovered that lead-acid and lithium-ion advanced energy storage systems are complements rather than substitutes? Or perhaps, does it imply that the company will begin a gradual retreat from the lead-acid business?

While it is too early to conclude in one or the other direction, Exide´s decision does seem to anticipate a chain of events that may come forward in the near future at the advent of the “Sixth Techno-economic Paradigm“ with lithium as its main factor, as envisioned in a blog I published almost two years ago.

Lastly, as I have argued in another blog, given the growing interest in lithium-ion batteries for different applications, both within and outside the electric car industry, many new products, and services are beginning to appear in a promising market. What remains to be seen is how other companies will react to the new set of factors that are starting to shape the new ”Cleantech” Era.

Times Article Viewed: 7011

Note.- This is a republication of a blog originally published on EVWorld.com on November 08, 2009.

SQM Announces a Reduction in Lithium Prices

Lithium Economics

SQM Announces a Reduction in Lithium Prices

Oct 01, 2009

Will SQM´s recent announcement to reduce lithium prices delay even further Bolivia's introduction into one of today's hottest commodity markets of the world?

A couple of days ago, while I was giving a lecture on Bolivia's lithium potential at the Bolivian Catholic University, I recalled two of the three conditions for lithium to become a key factor in the forthcoming Sixth Techno-economic Paradigm mentioned in a previous article, namely:(i) clearly perceived low and rapidly falling relative cost; and (ii) apparently almost unlimited availability of supply over long periods. My commentary was that compliance with these conditions was subjected to a great extent to what the country holding almost half the lithium resources of the world finally decides to do in terms of how and when it enters the lithium market.

To begin with, I argued that it is not the same to enter one of the hottest commodity markets nowadays with 480 MT of lithium carbonate equivalent (LCE) a year (the estimated production of the pilot plant project in 2010 currently pursued by the government of Bolivia) as looking for a more ambitious figure such as 30,000 MT of LCE (the estimated production of an industrial project to begin operation in 2015). Here I was referring to another two points suggested by myself a few months ago for Bolivia to become the new Saudi Arabia of lithium, both regarding Bolivia's imperative to produce lithium carbonate in a proportion to the world's needs and lithium prices not to increase so as to make other lithium resources (i.e. spodumene) commercially viable. Needless to say, I was aware of the fact that the larger the production Bolivia throws into the market the larger the reduction in lithium prices that we will have to face as a result. I also commented on what happened to the value of the metal in 2001 and the following 4 years when SQM started to operate as the largest lithium carbonate producer of the planet and how this affected especially to other spodumene producers at the time. Of course, it was then clear to me (as it is now) that an increased production today particularly coming from the world's largest lithium deposit in the face of more than interesting prospects for an imminent electric car revolution in a few years amounted to quite a different story. It would pertain to paving the road for the arrival of the “Next Big Thing”.

Similarly, I contended that Bolivia should not wait one single day to start producing lithium carbonate because it was crucial to (a) provide a correct signal to the world that it is capable of supplying as much lithium as the market requires; (b) contribute to reducing the cost of lithium-ion batteries to ensure massive access of consumers to electric vehicles; and (c) postpone the development of alternative technologies (e.g. hydrogen or methanol).

At first sight, SQM's recent announcement that it will reduce its lithium carbonate and lithium hydroxide prices by 20% to accelerate demand recovery, create incentives for research of new lithium uses, and contribute to the sustainable long-term development of the lithium market seems astonishing to say the least. Is SQM aiming at delaying, even more, the introduction of Bolivia into the lithium market?

This comes at the worst of all times for Bolivia, it comes when it just announced that its pilot plant will start production one year later (2011) the original date stated about a year and a half ago and confirmed that it will definitely “play solo” to produce lithium carbonate at an industrial scale beginning 2015.

Times Article Viewed: 3995

Note.- This is a republication of a blog originally published on EVWorld.com on October 01, 2009.

Lithium-ion Batteries: New Business Opportunities?