It wasn’t the sound of his car engine that was distracting Ian Clifford. The chief executive of Canadian business Zenn Motors makes electric vehicles that give off no noise. He was worried that the obvious choice to power his next car — the same stuff that goes into laptops and cellphone batteries — was going to be in short supply.
“If you look at the increase in lithium prices over the past seven to 10 years, it’s been dramatic,” Clifford said.
Zenn’s short-range urban cars traditionally used nickel metal hydride (NiMH) batteries, but his next vehicle — a 130kph model with a 400km range — needed more efficiency.
“There are very limited global reserves, and they’re in potentially very unstable parts of the world,” Clifford said.
SUPPLIES UNDER STRAIN
The US moved the previously obscure chemical element to center stage in the 1950s when its lithium-hungry H-bomb program kickstarted world production. The rising popularity of lithium-ion (Li-Ion) in batteries has sent demand soaring again, and pundits now worry that electric cars will strain our supplies.
Your laptop might use six finger-sized Li-Ion cells in its battery, but US-based Tesla Motors bolts together 6,000 cells to power one of its high-end electric sports cars. Now others, drawn to Li-Ion’s light weight and high capacity, are joining in.
Toyota’s Prius hybrid electric vehicle (HEV) runs on a small battery powered by braking energy that switches to gasoline when it runs out. The group will switch its NiMH chemistry to Li-Ion in 2010. GM will be putting Li-Ion batteries in the Volt, its plug-in hybrid electric vehicle (PHEV) due out the same year. Other vendors also promise PHEVs, which are similar to HEVs, but with a larger, plug-in battery. Many will take the Li-Ion approach.
So how much lithium do we have? It takes 1 million tonnes of lithium metal to produce 5.3 million tonnes of the lithium carbonate that goes into Li-Ion batteries, said Brian Jaskula, an analyst at the US Geological Survey (USGS).
Data from USGS puts total world resources of lithium metal at around 14 million tonnes. The total world resource includes all the lithium metal we know about, whether it is commercially viable to extract it or not. But the USGS data is based on a 1976 National Research Council report.
“That was the last time that an organization got together to do that type of research,” Jaskula said.
A lot has changed in 32 years. Back then, most lithium came from a mineral called spodumene. But in 2001 SQM, a large mining group, began producing it in huge volumes by extracting it from salars — salt flats through which water has leached. The cheaper process sent prices plummeting and put many spodumene mines out of business.
RESEARCH
Two independent researchers are hoping to update the facts. In the pessimist corner is William Tahil, research director at Meridian International Research, who predicted two years ago that demand for lithium in cars would outpace supply.
“There is no surplus lithium carbonate available for the automotive market. It’s all being used by existing industrial applications,” he said.
His report provoked a rebuttal from retired industry veteran Keith Evans, who worked on the original 1976 report. In March, he released An Abundance of Lithium, claiming a world resource of 28 million tonnes, almost half of which he says could be extracted commercially. This would produce nearly 74 million tonnes of lithium carbonate.
“Tahil’s argument that the world is short of lithium carbonate is wrong,” Evans said.
Two months later, Tahil released an even more pessimistic report, claiming that economically viable lithium metal reserves were just 4 million tonnes. Evans is due to respond with a further rebuttal soon. Who is correct?
“Tahil considers that the total world lithium reserves are 4 million tonnes,” said an insider at SQM, which produces 37 percent of the world’s lithium carbonate. “However, SQM’s proven and probable in situ reserves alone total 5 million tonnes.”
Tahil, who still stands behind another report he wrote in 2006 claiming that the World Trade Center was felled by underground nuclear explosions, also dismisses the potential extraction of lithium from hectorite, a type of clay. But Western Uranium Corporation, a Canadian group, is testing recovery methods that it says could be worth 2 million tonnes of lithium. Tahil has also largely dismissed the option of recycling lithium carbonate from Li-Ion batteries.
Disagreements over lithium reserves aside, the other debate is about how much lithium we can produce from our reserves, and whether it can match the growth of the car industry. Analysts say that we won’t be needing 17 million lithium-powered cars for a considerable time.
Anjan Hemanth Kumar, an analyst with Frost & Sullivan, says Europe will be the biggest market for electric vehicles, and he predicts that there will be some 250,000 such vehicles in Europe by 2015. The US and Europe combined will have about 160,000 PHEVs by then. And Li-Ion battery vendor Hitachi says that most hybrid vehicles will use NiMH batteries until 2015.
PRICES MOVE FORWARD
But there have been some recent speed bumps in the largely opaque lithium market, which relies on bilateral sales agreements rather than commodity exchanges.
“There’s a difference between long-term availability and short-term supply,” said Nicholas Lenssen, practice director for distributed and renewable energy at IDC. “There are definitely concerns over short-term supply.”
Roskill, which provides information on metals and minerals markets, said the price of lithium carbonate rose by 48 percent. An additional problem was a fire at Matsushita’s lithium-ion battery plant in Japan last September, and another at South Korean LG Chem on March 3.
Nevertheless, suppliers and observers are confident.
“There seems to have been a big change at the end of 2007,” said Jaskula, who tracks supply and demand. “It seems to be largely due to the Chinese. They’re inputting their production capabilities, and they may be releasing more stuff that was stockpiled.”
And SQM has 12,000 tonnes per year of spare capacity at present, with permits to increase it.
Lenssen nevertheless warns that an electric vehicle market that has been on-and-off for the past decade, combined with the conservatism of the auto industry, could put producers and consumers of lithium out of sync.
“For those investments to be made, folks have to have a degree of certainty that in fact this time, these vehicles are going to happen and that oil prices — or more particularly, retail prices for petroleum products — will remain high,” he said.
Peak oil advocates will worry that in spite of Kumar’s predictions about electric vehicles, we’ll be forced to embrace Li-Ion soon because oil will simply run out. But Bill van Amburg of research organization Weststart-Calstart says that lithium won’t have to support the auto industry on its own.
“You’ll have more efficient cars, alternative fuel, blended fuel, then the hybrids and electric drives, and all of them will have their piece of the wedge,” he said.
FUTURE TECHNOLOGIES
Clifford is already taking the road less traveled. Zenn has invested US$2.5 million in eeStor, a Texas-based ultracapacitor group. Ultracapacitors are storage devices traditionally used for delivering large kicks of power, but they have little long-term energy capacity. eeStor promises to deliver one that stores as much energy as a lithium battery at less than half the weight — and with a charging time of under 10 minutes. Lockheed Martin has already signed an exclusive license to use it in military applications.
Other technologies are being investigated by carmakers, too. Last year, Tata Motors, the Indian carmaker, gave MDI, a company started by a former Formula One engineer, 20 million euros (US$31 million) for the rights to build cars based on its compressed air design. Both Zenn and MDI’s US subsidiary ZPN hope to have cars housing their new technologies on the roads by 2010.
Fossil fuel cars are unlikely to disappear just yet. But as we seek cleaner transport, other technologies are just around the corner.
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