A world dependent on lithium for its vehicles could soon face even tighter resource constraints than we face today with oil. Lithium-rich South America would become the new Middle East. Concentration of supply would create new geopolitical tensions

2021-06-28: Lithium 3x cheaper

“Over an 18-month period, only 30% of the available lithium is captured because the lithium co-precipitates out of the brine with other salts. By using membranes, we can now control this mechanical separation process, avoid the co-precipitation that causes 60% of that loss, and achieve a 90% recovery rate”

Battery capacity has to scale at least 1000x in the next decade, and Lithium prices are one bottleneck.

2022-05-20: Demand is growing 2x faster than supply.

• Demand for lithium from the EV industry is growing at 2x the rate of lithium production. As a result, lithium prices have skyrocketed over the past 6 months — 4x last year’s prices in tight markets. By 2025, the US could need up to 75k tonnes per year of lithium to supply new gigafactories.
• The US currently produces only 1% of global lithium production — 1k tonnes of lithium content. This currently comes from a single brine operation: Albemarle’s Silver Peak site in Nevada.
• The US theoretically has enough lithium in the ground to meet the growing demand. The USGS reported that the US has 750k tonnes of economically recoverable lithium in 2021. This estimate will continue to grow as new reserves are proven; as recently as 2018, the US had only 30k tonnes of established domestic reserves.
• The Thacker Pass project in Nevada has received all required permits to begin construction and is the closest to bringing new US lithium production online (5k tonnes of lithium content in Phase 1). Because the lithium at Thacker Pass is found in clay rather than in a brine, it can be extracted quickly with relatively standard technology once facilities are constructed.
• The heated brines pumped out of the ground for geothermal power in California’s Salton Sea region also contain significant amounts of lithium — 24k tonnes of lithium content passes through these plants a year by NREL’s estimate. Extracting this lithium is hard because of the wide range of other minerals present, combined with relatively low lithium concentrations and elevated temperatures. However, building out more geothermal capacity is an amazing BOGO opportunity: clean energy + lithium, and lots of it!
• 3 challenges prevent the USA from achieving lithium independence. The first is the long development times needed to bring a new resource to production (4–10+ years). The second is the low average lithium concentration of US deposits, which make them more complicated and expensive to process than Chilean brines, for instance. The third is creating a streamlined (and appropriately staffed) permitting process that ensures that environmental impacts are kept to a minimum, while enabling a predictable outcome for responsible parties.

2023-09-13: The market solved it.

When I first read about the discovery of a vast new deposit of lithium in a volcanic crater along the Nevada-Oregon border, I can’t say that I was surprised. Not because I know anything about geology — but because, as an economist, I am a strong believer in the concept of elasticity of supply.
It’s worth dwelling on the significance of this find, which could help limit climate change and ease geopolitical tensions. The find, 20-40m tons, would be larger than the current largest, 21m tons beneath the salt flats of Bolivia. (The discovery awaits final confirmation, but at least 1 company says it expects to start mining this supply in 2026.) And lithium is of course a crucial ingredient in batteries for electric vehicles, demand for which is surging and which are an important part of any plan to fight climate change.

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