How Lithium is Impacting the Business World

Lithium, a valuable metal, has become increasingly more popular recently.  Lithium has been used in the past to create glass, ceramics, and industrial lubricants.  However, trends are shifting in terms of the supply-and-demand cycle for lithium in the business world.  The demand for lithium is increasingly being driven by the energy economy.

Electric vehicles, e-bikes, and battery powered devices like cell phones all require lithium batteries.  In particular, electric vehicles have become a globally desired product due to their ability to help humanity reduce our carbon footprint.  As a result of the increasing demand for lithium batteries to power electric vehicles, the supply of lithium has become more valuable.  The average price of lithium has increased by 300% in the past three years (from 2020 to 2023).  The highest recorded price of lithium thus far has been $86,000 per metric ton in 2022. 

The batteries used in electric vehicles and other products popular in the energy economy are called lithium ion (Li-ion) batteries.  They are somewhat challenging to produce, however.  

Currently, only one technology (which is called adsorbents) is used to extract lithium.  In order to isolate a form of lithium that is usable in commercial products, a process called direct lithium extraction (DLE) is employed.  This difficult process is worthwhile, however.  When compared with conventional methods of extraction, DLE results in faster production times.  Additionally, the Li-ion batteries made from the extracted lithium are very advanced, and are capable of high levels of voltage. 

Where is lithium being produced, and who are the major players in the supply aspect of lithium?  Chile has the largest natural reserves of lithium, with 92 million metric tons of lithium present in this country, and Chile does produce lithium.  However, Australia is currently the leading producer of lithium in the world.  Other nations that produce lithium include China and Argentina.  Countries that have reserves of lithium, but are not yet engaged in production, include the United States of America, Canada, Mexico, Bolivia, Peru, the United Kingdom, Ukraine, Siberia, and Thailand. 

The United States’ reserves contain only 3.6% of the world’s lithium.  This means that the US is relying heavily on the mining industries of other countries in order to obtain this in-demand product.  Other mined products that are experiencing a higher rate of demand include graphite, cobalt, nickel, copper, and zinc. 

Two provinces in Canada to keep an eye on with regard to lithium reserves are Southern Alberta and Saskatchewan.  The geology and location of these provinces are ideal, and there is minimal capital cost associated with lithium extraction in these regions. 

It is important to keep track of lithium production, as lithium is experiencing one of the largest increases in demand of any item in the energy realm.  Current projections suggest that lithium will be 22 times more in demand by the year 2030.  The lithium supply chain, controlled mostly by international powers outside of the US, is being called one of the most highly imbalanced supply-demand systems in recorded history. 

The driving force behind the increase of demand for lithium is batteries.  Electric cars heavily rely on lithium, with 8 KG of lithium being required to make just one lithium-ion battery pack for an electric vehicle.  Lithium ion batteries have become more popular for a variety of reasons. 

Lithium ion batteries are proving to be more efficient, and eco-friendly, than conventional batteries.  Traditional batteries are made from lead-acid combinations, or nickel-metal hydride.  So how do lithium ion batteries improve upon these other types of batteries?

Batteries made from lithium ions have a higher energy density and produce voltage consistently even as the charge decreases.  They also self-discharge at lower rates, and do not need to be fully discharged periodically.  The typical life of a lithium battery is about 8 years, and around 100,000 miles. 

What are the limits, or things to be considered, with lithium batteries?  They require heating and cooling systems in order to be used safely and efficiently.  Onboard battery management systems are also required to make the most of lithium ion batteries’ longevity; these systems include software and hardware.  Finally, any product that operates using lithium ion batteries must maintain a range of 50-68 degrees Fahrenheit.

Source: LithiumStockTips.com