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The Lithium Rush

Lithium is in very hot demand at present.  Like a new frenetic modern-day gold rush, it seems that big companies wanting lithium are frantically looking for this new sort of gold.

Obviously, lithium is required in the production of lithium-ion battery cells that are used for powering EVs.  In order to make sure that they don’t run short of lithium anytime soon, China, which has the largest EV market in the world, produces 80% of the world’s usable lithium product all on their own.  In a statement recently, Sung Choi, a metals analyst, stated that “The cost of lithium has risen because virtually all automakers have jumped onto producing EVs.”

Currently, over half of the world’s lithium resources are in South America and Australia.  As prices for lithium are surging – and some metal analysts at BloombergNEF (BNEF) have witnessed an almost 500% increase in the past year – China seems to be leading the charge in the hunt for new lithium mining reserves.

China is searching around the world for new lithium deposits that can supply their big need for the metal used in EV production.  China has even looked at the Qinghai-Tibetan plateau as a source for the metal, as well as in Africa.  Sung Choi also said that “Africa has recently been in the spotlight with its ample resources in metals.”

Some of the African lithium mining fields being looked at by China include the reserves found in the Democratic Republic of Congo, where Zijin, a Chinese mining giant, is battling with Australia’s AVZ minerals over controlling the DRC’s Manono mine.  Quite possibly, the Manono mine has the world’s biggest lithium deposit.

Last year, Congolese President Félix Tshisekedi said that people living in areas with mines were “still languishing in misery,” while it was the foreign multinationals running the mines who prospered.  The mines do provide locals with jobs, but many would say that the locals don’t see enough trickle-down reward from the massive multimillion-dollar projects.

Also, in Zimbabwe there are large untapped deposits of lithium, and China is rapidly buying up these resources.  Zhejiang Huayou Cobalt, a Chinese-based company, has recently purchased Arcadia Lithium mine outside Harare.  The money (some $300 million) will be used to construct a mining plant with a processing capacity of 400,000 metric tons of lithium concentrate per year.  The Zimbabwean government has welcomed this recent investment, looking forward to helping fill China’s and the EV’s need for lithium-based batteries.

The current and potential growth of the EV industry, and therefore the rush for new lithium resources, has had companies like Tesla seriously considering getting into lithium mining and refining directly for themselves.  Maybe it is Toyota who is taking the more manageable approach to the mass production of EVs.  Their pace toward an EV transfer seems to take a better-calculated methodology when compared with some other big automotive manufacturers who seem driven on producing a fleet of their own EVs as fast as possible.  Toyota sees the value in hybrid technology building a bridge to solving any issues around climate change and the EV mindset.

Lithium isn’t just used in the production of EV battery packs.  Lithium is also used in rechargeable batteries for mobile phones, laptops, digital cameras, and in warfare equipment. It is also used in some non-rechargeable batteries for things like heart pacemakers, clocks, and toys.  The future and the course of EV production and EV uptake does seem to depend on the amount of lithium being available and the costs involved for mining it.  These costs will affect how much a new climate change-solving EV might eventually sell for.