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A 1% increase in electric vehicles could increase lithium demand by more than 40% of current global production.
DAVID BERMAN

THE GLOBE AND MAILLAST UPDATED: WEDNESDAY, JAN. 25, 2017 1:29PM EST

If lithium’s role in modern life were largely confined to the few grams used in smartphone batteries, we might not care much about it. But as it makes its way into the batteries of electric cars like the Tesla Model S—each requiring many kilograms of the stuff—the world’s lightest metal is rising in importance. Tech companies are securing sources of the soft, silver-white element, and even stockpiling it amid fears of tight supplies.

Lithium can generate more energy per cell than lead-acid or zinc-carbon batteries, and Goldman Sachs has called it the “new gasoline” for its potential to displace the internal combustion engine. It estimates that a 1% increase in electric vehicles could increase lithium demand by more than 40% of current global production. By 2025, the investment bank believes the market for lithium carbonate equivalent will rise to 470,000 tonnes, or triple current production. No wonder prices have skyrocketed.

Prices may eventually be kept in check by the abundance of lithium worldwide, however, as new mining operations pop up and raise concerns of oversupply. Chile, Argentina, Australia and China are the top producers, with mines in the U.S., Portugal and Zimbabwe. Nemaska Lithium Inc. and Critical Elements Corp. have projects in Quebec. But impoverished Bolivia is sitting on a fifth of the world’s identified resource—nine million tonnes—at Salar de Uyuni, a massive salt flat.

There, lithium resides in the underlying brine, which must be pumped, evaporated and refined into lithium carbonate. Bolivia isn’t the easiest or most cost-effective place to produce lithium, given the country’s resistance to partnering with global miners, plus high levels of magnesium in the deposits. Nonetheless, Bolivia exported its first shipment in August—10 tonnes to China—and aims to increase annual exports to 10,000 tonnes by 2021, when, it hopes, lithium will still be the world’s hottest commodity.