carbonates

Li-ion Batteries and How Cheap Beat Cool in the Chevy Volt

From a geologist:

The brine operation in Nevada still operates, but it does not sell lithium on the open market. The operator consumes all of its own production.

The USGS report from 1994 is completely out-of-date, obsolete and irrelevant. You really need to read some recent references.

Unless lithium prices rise enough for hard rock mines to be economic I will stick to my point. The brine-resources are not large enough to supply an automotive lithium battery market as well as the electronics market they already supply. If lithium were to rise in price to hundreds of dollars per lb. for battery grade, then the hard rock miners might come back into the market. However, that is unlikely to be in the US because the regulatory environment makes US hard rock mining uncompetitive. How do the economics for car battery packs work at $100 per lb? $200/lb? $500/lb?


On Mar 28 01:23 PM NorthernPiker wrote:

> carbonates, lithium is not a rare metal. It is marginally more abundant
> than lead in the earth’s crust and vastly more abundant than lead
> in seawater. Based, on the 1994 domestic US price of $4.41 per kilogram
> (up from $4.21 in ’93), it can be mined economically; however, mining
> cannot compete with a cheaper brine operation.
>
> Prior to 1997, the major producer of lithium was the US, from two
> sources – a brine operation in Nevada and a mining operation in North
> Carolina. The NC mine shut down in 1997 because it could not compete
> with the growing brine operations in Chili. This blog claims that
> North Carolina has reserves of 2.6 million tons of lithium, ½ the
> reserves of Bolivia.
>
> www.nicholas.duke.edu/...
>
>
>
> From the USGS 1994 yearbook:
> “The United States has been the largest producer and consumer of
> lithium and the two U.S. companies have been the leading lithium
> carbonate producers in the world for many years.” …
>
> “Lithium carbonate, … Truckload lots, delivered $2.00 (per/ lb)”
>
>
>
> minerals.usgs.gov/mine...
>
>

Li-ion Batteries and How Cheap Beat Cool in the Chevy Volt

You already heard from one and you don't believe me. I am a geologist and engineer who has studied the lithium industry and visited the lithium mining operations of Chile and Bolivia. I know what I am writing about: lithium is not abundant enough at present prices to meet the supply that would be needed to convert any significant proportion of the auto fleet to lithium batteries.


On Mar 28 08:39 PM NorthernPiker wrote:

> John, I share somewhat your lack of qualifications to speak to mining
> costs.
>
> Based on the USGS 1994 Yearbook, “Production of lithium carbonate
> from brine in Nevada (and the Andes, I assume) is much less energy
> intensive (and simpler) than the production from the spodumene” (the
> ore type found in North Carolina).
>
> minerals.usgs.gov/mine...
>
>
> As for what mining production costs are, I have only a press release
> from Western Lithium Corporation on drilling results for one of the
> five deposits (lenses) at its King’s Valley hectorite clay property
> in Nevada. (Yeah, it’s not even spodumene but it is an ore.)
>
> “The PCD lens contains Indicated Resources of 48.1 million tonnes
> grading 0.27% lithium, or the lithium carbonate equivalent (seekingalpha.com/symbo...)
> of 688,000 tonnes LCE and Inferred Resources of 42.3 million tonnes
> grading 0.27% lithium, for an equivalent of 606,000 tonnes LCE, both
> at a cut-off grade of 0.20% Lithium.”
>
> “Economic assumptions for base-case cutoff grade (high-lighted),
> $3.50 Lithium Carbonate USD/lb, 60% metallurgical recovery; $45 USD/ton
> processing, $2 USD/ton Mining; Rounding errors may exist”
>
> finance.yahoo.com/news...
>
>
>
> Below a price of $4.50 per lb. or $10/kg (seekingalpha.com/symbo...),
> this ore body seems somewhat marginal when one considers capital
> needs, the ongoing drilling costs and risks – market pricing, energy
> cost escalation, … However, they may be able to tap into battery
> stimulus money to improve the project economics. The development
> of this significant lithium ore body would help to prevent the pricing
> of LCE from going absolutely silly.
>
> John, I agree that it would be good to hear from some mining engineers.
>

Li-ion Batteries and How Cheap Beat Cool in the Chevy Volt

Lithium batteries and "green" are not at all compatible ideas. Besides the fact that lithium is a rare metal with limited supplies, mining the lithium will destroy two of the most unique, fragile, and unspoiled environments on the planet. Eventually the "greens" will figure this out and lithium carbonate from brine will become shunned by the market. The problem is that lithium comes from the Atacama Desert in South America (the driest place on earth) and similar environments in Tibet, which itself is a political hot potato. Even if the environmental risk of lithium mining is ignored, the economically recoverable lithium (at present prices) is nowhere near enough to supply the auto industry with any significant amount of battery quality lithium.

If lithium were to increase in price by an order of magnitude it might become economic to go after resources where the concentration of lithium is in the tens or hundreds of parts per million, rather than the thousands of parts per million that are currently extracted. Add another order of magnitude of price increase and 1 to 10 ppm might become economic. Even with this idea in mind, recovery of these low concentration reserves is often a very small percentage of the resource. The simple fact is, it is very unlikely the supplies of lithium will ever allow lithium batteries to dominate the EV market.

The other risk of that these battery manufacturers will experience is that an OPEC equivalent in lithium may eventually be formed. South American countries that produce most of the world's lithium supply could easily demand that lithium batteries be manufactured in their countries as a condition of obtaining the supply. As an investor, I have no interest in the battery manufacturers, as they will be at the full mercy of the mining companies that control the supply.

All this technology is great, but if you can't grow it you have to mine it. And if you can't mine it, you can't build it.

Who Will Supply the Batteries for Plug-In Cars?

Exploration is unlikely to turn up much more lithium. Economics are the only thing that will change the reserves. Lithium brine deposits are the result of a very unique set of circumstances, which require something on the order of millions of years of consistently arid climate to concentrate them, along with a source of lithium that weathers from igneous rocks, and the Atacama desert, which is the driest place on earth, is one of the few environments where these conditions exist. To make matters worse, this area is a place of unique natural beauty with very unusual ecosystems and mining it for lithium would probably destroy it.

Lithium is recovered from ground water in these dry lake beds (salars) by pumping and drying in evaporation ponds. Rich areas contain about 4000 ppm of lithium in the brine, and the deposits are not consistent across the salar. There are lithium operations in Nevada (one small one) and three in China. North Carolina had a producer that mined spodumene instead of brine that ceased being economic in the 1980's. Australia has a spodumene mine that has a moderate sized deposit of lithium. Other possible reserves are in places like Russia and Zimbabwe. The Great Salt Lake (Utah) and the Salton Sea (California) are two possible reserves, but environmental standards are unlikely to allow these to be exploited.

The brine operators of South America have made the hard rock mine operators uneconomic (except where lithium is a by-product). If lithium prices were to rise an order of magnitude (not a few cents), some hard rock mines might come back. Recoverable reserves of the brine producers are probably no more than 1 million tonnes, while world reserves may be more like 4 million tonnes. You will see wildly larger numbers from some sources, but these are highly inaccurate. Currently to build 90,000 GM Volts, it requires about 2000 tonnes of battery grade lithium carbonate. That is the full annual production of battery grade lithium of one operator, Admiralty Resources (ADY). Lithium is also used in glass, ceramics, lubricants, and in specialty aircraft alloys, so batteries are not the only market.

All that said, for investors, lithium miners are probably a good bet going forward, as demand is going nowhere but up and supply is unlikely to increase dramatically if prices rise. Producers include SQM, FMC, ADY, Chemetalle, CITIC Guon MGL, Talison Minerals, Galaxy Resources, Bikita Minerals, Tanco, Avalon Ventures, and others. Just do your own due diligence, as mileage may vary due to the vagaries of the mining business.

Who Will Supply the Batteries for Plug-In Cars?

I love the way everyone promoting Lithium batteries ignores the obvious: there is not enough economically producible lithium in the world to meet any more than a small fraction of the amount needed for PHEV and EV vehicles! (I know, I'm a geologist who has visited the lithium production of Chile and Bolivia). The portable electronics sector is likely to absorb most of the planned production increases so there will be little available for the EV market.

I really don't give a #*%@ who supplies the batteries for electric cars. Who will supply the raw materials? It will take major changes in the price of lithium to make the less concentrated lithium sources economic for mining, and at that point, it is likely that the cars will also be uneconomic. If you can't grow it, you have to mine it and if you can't mine it, you can't build it.