Limited Lithium Supplies Could Restrict Electric Car Growth
By Herve Kempf
Will Bolivia be the Dubai of 2050? If electric cars have a great future, then perhaps. In March, Bolivian President Evo Morales signed a decree setting up a lithium extraction facility on the Uyuni fossilised salt lake. And in September, the Bollore Group made it known that it was negotiating a long term supply agreement for Bolivian lithium, for the launch of its electric vehicle, the Blue Car.
If it is undoubtedly premature to say that lithium is the oil of the new century, this raw material is still the subject of sudden interest, shown by the increase in its price from about $350 a tonne in 2003 to nearly $3,000 today.
The explanation is tied to developments in battery technology. For a long time these have functioned with lead: heavy in weight and low in energy. Good at starting engines but not to power them. In the 1980s nickel cadmium batteries reduced the weight but not sufficiently to ensure the success of electric cars, several thousand of which were launched in France. The breakthrough came from batteries using lithium, a very light metal that can hold a lot of energy. In particular, lithium ion batteries “for the same energy occupy half the volume of a nickel cadmium battery”, explains Franck Cecchi, operations director at JC-S, a company that specializes in this technology.
Bollore LMP that will power jointly-developed Pininfarina B0 electric car
Lithium ion technology was first used in laptop computers and mobile phones, for which consumption has grown in a strikingly. 78 million laptop computers were sold in 2007, 23% more than in 2006. As for mobile phones, the number of examples sold has grown from 517 million in 2003 to 1.1 billion in 2007. This fast expansion has completely transformed the lithium market that until now had limited applications in pharmaceuticals (lithium is a drug used to treat manic depressive disorders), lubrication, air conditioners etc. While batteries only represented 9% of lithium demand in 2000, they now absorb 20%. The arrival of electric cars would increase demand for the metal still further. “If they develop significantly, they are going to represent the number one use for lithium”, notes George Pichon, CEO of the metal trading company Marsmetal.
From which arises two problems: is the resource well distributed? Is there enough of it for future requirements? In fact, while lithium is very abundant in Nature, it only exists in economically exploitable concentrations in a very few places on the Earth: an area of fossilised salt lakes in the Andean countries, at the cross-roads of Argentina, Chile and Bolivia (close to 70% of world resources), as well as in salt lakes in Tibet and in mines in Australia, Russia and in the USA. Chile has been the number one world supplier since 1997, with the German firm Chemetall being the first operator. While we are a long way from seeing a cartel, the lithium map however draws out a new geopolitical situation.
Are the resources sufficient to ensure the development of the market? The answer is very difficult, due to the opacity of trading. “It’s not a very open market, a closed world, very secret”, says George Pichon. Production figures are not known exactly. It is estimated by the USGS (the geological service of the USA) at 25,000 tonnes per year. “In any case the price has increased enormously, mainly for speculative reasons” explains Jean-Marc Metais, CEO of Batscap, the Bollore subsidiary. “That’s why we are trying to control our supply channel, to secure our resources upstream”.
Another difficulty is that batteries for electric vehicles require lithium carbonate purified to 99.5%. This means a process quality which only the Japanese companies seem to have mastered.
The car manufacturers display no signs of concern about reserves of the metal. However a study by consultancy Meridian International Research published in May (The Trouble with Lithium 2) has thrown a cold draught on the subject: examining in detail the geological configurations of the different production sites it concludes: “Realistic increases in lithium production will not enable a revolution in automobile propulsion to be achieved in the next decade. (...) In the most optimistic scenario, it would only supply 8 million GM Volt type hybrids” (the next hybrid model from General Motors). This figure can be compared to a world market of 60 million petrol cars in 2008.
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