Lithium … an economic war for control of white gold

Lithium is widely used, from cell phones to laptops, to electric cars and even airplanes, and it has created competition between major countries.

  • Lithium .. a war for money
    Lithium .. a war for money

With the increasing demand for lithium, which is used in the manufacture of very sensitive electronic devices, the aspirations of countries owning important reserves of this rare metal have increased.

There is a battle over lithium between the United States and China, which sees the future lie in the battery markets, representing the junction of the transition to alternative energy sources, despite certain reservations about the environment.

Musk infiltrates the world of lithium mining

Tesla CEO Elon Musk has complained about the high price of lithium, which is used in the manufacture of electric car batteries, so Musk suggested that his company enter the mining line.

Musk’s decision came after he feared the impact of the high price of lithium on the cost of car production, as its prices had risen by about 488% over the past year, from $ 17,000 per tonne to about $ 55,000 thousand.

  • The evolution of the price of lithium over the past 5 years
    The evolution of the price of lithium over the past 5 years

According to the economic website Quartz, the average electric motor needs about 10 kilograms of lithium, and in return, every 5.3 tons of lithium carbonate ore produces only one ton of the substance.

Like other commodities, lithium is on the rise after the Russian military operation in Ukraine. Although it decreased when the Corona virus spread and reached low levels, about 6.8 thousand dollars per ton.

In turn, Ravian Automotive CEO RJ Scaringe confirmed to the Wall Street Journal that the lithium mining industry is not yet ready to supply large quantities of these minerals, indicating that 90 to 95 percent of the supply chain has not yet does not exist. .

And CNBC reported that there are already lithium deposits throughout the United States, according to the U.S. Geological Survey.

According to Fortune, Tesla secured its rights to mine lithium in Nevada after the deal to buy the lithium mining company failed, which included “people with knowledge of the matter.”

Musk bought the rights to lithium deposits in Nevada in hopes of cutting costs by 33%, but experts say it will take “three to four years to see production, and it is not easy to extract the metal from the deposits” , because its methods are slow and inefficient as Energy X inventor Tek Egan together with Scientists developed a filter consisting of small “nano” particles that can separate lithium from other salts in solution and more than 90% of the lithium can be recycled, according to the BBC.

If proven effective, it can reduce the cost of lithium, which removes one of the biggest obstacles to increasing battery production.

  • The highest reserves of lithium in the world
    The highest reserves of lithium in the world

China is the number one consumer of lithium

The Chinese expansion in the field of lithium supply chains threatens the United States, where China owns 51% of the largest lithium field in Australia. The Chinese company Yibin Tianyi has also signed an agreement with the Australian company Pilbara Minerals to buy the Chinese. company 40 000 tons of lithium in a relatively low-value transaction. That’s $ 15 million prepaid.

The agreement came after the strained relations between China and Australia in 2020, against the background of the latter’s demand for an international investigation into the Corona virus, which China saw as an accusation against it and put pressure on it from the isolate world. .

China seeks to gain greater market share in the field of renewable energy or the world’s first electric motors. The United States expresses its annoyance with China over lithium, saying, “One country controls more than 80% of the global supply chain of rare metals that are important for electric motors and wind turbine components.”

China currently controls significant lithium assets in South America, and its business has generated nearly $ 4.5 billion in lithium investments in South America and Mexico over the past 3 years.

Bolivia and the lithium coup .. Seek economic interests

Lithium is Bolivia’s most important natural resource, and it says it has 70% of the world’s mineral reserves, mostly in the Salar de Ioni salt desert, but Bolivia could not develop the industry of this mineral on its own. to the difficulty of mining and refining this field requires capital and expertise.

Since former President Evo Morales came to power in 2006, the government has been trying to stop the looting of multinational companies that have taken over many mining projects from some of the most powerful companies, sending a message that the exploitation relationship will stop. .

For the past thirteen years, Morales has been trying to get the people to take advantage of the resources rather than to be invested by foreign companies, and this promise has been partially fulfilled. Morales worked to nationalize the factories that extracted this substance. This stance taken by the Morales government towards multinational corporations led to a harsh reaction from them, many of which filed lawsuits against the government of Bolivia, and the issue of lithium was not absent in the discussion on the coup led to by Washington. Against Bolivian leader Evo Morales in 2019.

The coup project in Bolivia did not last long, as the candidate of the Bolivian left, Luis Arce, overturned the dream of the United States, which sought to get its hands through its companies on the largest strategic reserve of lithium in to lay the world. .

US start-ups in the US state of Texas, which is investigating the possibility of importing Bolivian lithium, are seeking to explore the potential opportunity to invest in it.

The presence of lithium in a salt flats is more accessible than the lithium covered with rocks in Mexico, said Michael Michot Vos, study leader in the Office of Economic Research at the University of Texas.

The accusatory finger is also chasing Tesla’s CEO, Elon Musk, who wrote on “Twitter” in response to one of his critics: We will carry out a coup against whom we want to. Exist with it. Tesla buys lithium from Australia.

  • Lithium .. a war for money
    Tweet by Elon Musk, CEO of Tesla

Mexico and Chile: Lithium will not be subject to privatization

Recognizing the importance of lithium, Mexican President Andres Manoes Obrador announced in February that he would establish a state-owned lithium mining company, indicating its goal of making lithium a “strategic mineral” and future exploration and mining for the government. keep.

Manoez Obrador did not go so far as not to allow the Chinese company in the northern state of Sonora to mine lithium and transferred the business to the government.

In turn, Mexican lawmakers approved a plan to nationalize the essential lithium, after the president proposed a project to reform the mining law with the aim of allowing state-owned companies to exploit this mineral exclusively without the participation of the private sector, but the parliament voted against the project. on April 17, and the delegates rejected his ambitious project by introducing a constitutional amendment to strengthen the role of the state in the electricity sector, a reform that was rejected by the United States and feared by Spain, which owns companies that operate in Mexico’s electricity. sector.

However, the investment in Mexico will not have a direct impact on the global market, as its impact is limited, as its reserves are only 1.7 million tons.

Bakanura Lithium Corporation, which is controlled by China’s Ganfeng Lithium Corporation, said It continues to build Mexico’s first mine, even after the government drew up plans to stop awarding contracts to private companies.

Mexico has not yet started producing lithium, while the economic viability and environmental impact of its mining are still unclear.

  • Part of the lithium extraction process
    Part of the lithium extraction process

In Chile, the largest producer of lithium in Australia, President Gabriel Borek wants to create a state-owned lithium company as the country draws up a new constitution that cements the rights of local communities and the environment.

Chileans protested some time ago in protest of a government plan to sell contracts to mine lithium. The protesters called to protest under the slogan “to restore our resources”, against the background of a bid for a 20-year contract to mine 400 000 tons. of lithium.

Chile is extracting this mineral at the Salar de Atacama site in the north of the country. It is one of the richest lithium fields in the world and is invested by the Chilean company “SQM” and the American company “Albermarly”.

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