im confused

As posted in theage 25th aug 2010

Copper load of this

Readers of Garimpeiro will remember a recent piece on Ivanhoe Mines boss Robert Friedland and his big call that the "phenomenon" of electric cars means that there is going to be an almighty need for lithium batteries over the next 20 to 30 years.

Friedland was more interested in the impact on copper demand than lithium, pointing out that 80 per cent of the weight of a lithium battery is copper foil. Even so, you would have thought that the outlook for lithium was pretty good too.

Well it is. But Rio Tinto incidentally warring with Friedland over its ownership rights in Ivanhoe, the Canadian-based owner of the Oyu Tolgoi copper/gold wonder in Mongolia has just dropped something of a lithium bombshell.

A Morgan Stanley note yesterday on a visit they got from Rio boss Tom Albanese contained the pearler that Rio has found what it thinks is one of the world's biggest lithium discoveries, in Serbia of all places.

In the finest of mineral exploration traditions, Rio was actually on the hunt for borax, a naturally occurring mineral compound that is used as a laundry whitener, general purpose cleaner and disinfectant.

Apparently Rio reckons its lithium find could supply 25 per cent of global demand, if it decides the market is there. At 100,000 tonnes annually and prices around $US6000 a tonne, lithium is on the small side of things for a bulk commodity specialist like Rio.

More to the point is what it tells us about the discount that should be applied to some of the hype out there about looming shortages of lithium and suggested pricing implications for the stuff.