Achilles' Heel of Next-Generation Electric Car: Lithium China starts full-scale production, likely to become more restricted resource than crude oil
* 2008-4-21 *
Competition for the development of various electric vehicles and fuel-cell electric cars by the world's leading automobile makers has become increasingly intense for next-generation vehicles with sustainable mobility. They are the so-called electric vehicle (EV), hybrid vehicle (HV) and plug-in hybrid vehicle (PHEV).
Each of these cars is equipped with lithium-ion batteries. That indicates the development of lithium-ion batteries is the key to success in turning out next-generation cars. For that reason, the world's automobile makers are busy building up strategic partner relations with related firms for battery development.
Nickel-hydrogen batteries are used for hybrid cars currently in use. But since their energy density is low and they can travel only a little over 10 kilometers with batteries, development of batteries that can ensure higher energy density, longer driving distances and no safety problems is urgently needed. That is why there is a focus on the lithium-ion battery.
This type of battery is already used for portable electronic appliances such as laptop PCs and cell phones, but electric vehicles would require batteries 100 times as large in capacity and high in efficiency compared with those used for PCs, and they are still in the process of development.
Let us take a look at the circumstances surrounding the lithium resources required for this type of battery.
In 2005, the world's lithium metal production was about 21,400 tons. Major producing countries are Chile with 8,000 tons, Australia with 4,000 tons, China with 2,700 tons, Russia with 2,200 tons and Argentina with 2,000 tons.
Of the world's total reserves of lithium metal of 13.4 million tons, Bolivia is estimated to have 5.4 million tons with potential exploration capacity. Chile, which now produces the largest volume, has 3 million tons. Argentina has 2 million tons and Brazil has 910,000 tons. The four South American countries together have as much as 84% of the total reserve, or 11,310,000 tons.
China has 1.1 million tons altogether, or a few hundred thousand tons more in scale. Just as platinum needed for fuel-cell vehicles is concentrated in South Africa and oil in the Middle East, lithium is disproportionately distributed in South America, which could cause geopolitical uncertainties.
As for the world's reserve of 13.4 million tons, the U.S. Geological Survey (USGS) estimates it to be lower, at about 11 million tons.
Lithium resources to be used for batteries are found in salt lakes and are produced mainly as lithium carbonate. The volume of lithium carbonate (Li2CO3) in reserve is estimated by USGS to be 58 million tons. Of the world's total production of lithium, lithium carbonate used for batteries comprises nearly 75%, or in the 70,000-80,000-ton range per year.
In the major producing nations, Salar de Atakama in northern Chile has salt deposits of lithium carbonate with annual production of 40,000 to 50,000 tons. Resources in Bolivia, yet to be developed, are in Salar de Uyuni at the southern end of the country, and the country accounts for nearly 50% of the world's reserve.
Both Atakama and Uyuni are salt pans that used to be in inland seas in ancient times, and are located in extremely severe natural conditions more than 3,000 meters above sea level.
Lithium resource development in Bolivia has been attempted several times in the past, but has never materialized. That situation comes from the recent political environment.
Bolivian President Morales declared the state ownership of petroleum and natural gas in May 2006, displaying resource nationalism and undisguised anti-U.S. sentiment. That left mining companies of the Western world utterly cold and uninterested in going into resource development in that area.
Resource development in Uyuni is not expected to be permitted under the present Bolivian administration. Also in Argentina, with ample lithium resources, international mining companies have experienced friction with local residents, and fear that political and social situations may deteriorate into something comparable to Bolivia, and the mining companies' assets could be nationalized.
But China will soon go into lithium production with a capacity of 5,000 tons in Qinghai adjacent to Tibet. Also in a salt lake in Tibet, a small-scale production has been started with the completion of Qinghai-Tibet Railway.
But China will naturally preserve lithium resources as strategic materials and prohibit exports. Since China has no platinum necessary for fuel cells, its top leaders have clearly stated that its next-generation automobiles will be EVs.
In case electric vehicles using lithium-ion cells come to comprise the mainstream of production in the world, what will become of the supply-demand relations of lithium carbonate?
As 1.4 to 1.5 kilograms of lithium carbonate is necessary for battery capacity per kWh, annual demand for lithium carbonate will be about 450,000 tons, roughly six times the present production volume, even if all 60 million vehicles produced annually in the world are turned into PHEV carrying small Prius-class batteries of 5kWh.
But since an 8kWh battery capacity would be necessary in reality, about 720,000 tons would be required. It is unthinkable for the present tiny-scale deposits to meet such huge demand.
The cost of lithium carbonate was $1 per kilogram until 2004, but has surpassed the $5 level in 2005 and 2006. One Japanese battery maker's purchasing price is more than $10 per kilogram.
The world is fascinated by lithium-ion batteries. But if the world's automobile industry as a whole turns to depend on lithium, the industry will face severe resource restrictions, worse than what we face now by depending on oil.
That will all come from an extreme concentration of resources, strengthening resource nationalism, changing conditions for exploiting resources, necessary production capacity, rising costs and resource conditions, including the volume in reserve.
In short, the present volume should be sustainable for portable electronic devices, but not so for use by electric vehicles. Although lithium can be recycled unlike petroleum, the peak lithium -- not peak oil -- is bound to occur.
(Masatsugu Taniguchi, journalist specializing in natural resources and environmental issues)
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