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In a daze cause I’ve found… lithium

12 October 2009

I though lithium was supposed to help control manic episodes.

A couple of interns at The Center for New American Security must have downed their own happy pills when they wrote this superficial review of lithium production — neglecting the rather minor one that’s of most concern to their employer — as fuel for nuclear bombs, and as rocket fuel for missiles):

Lithium is the lightest metal in nature and an excellent conductor of electricity, and these two properties make it especially useful for batteries. In the past, lithium was used most commonly in glass, ceramics, and pharmaceuticals, but its use in batteries has taken a huge jump in recent years. Currently, 25% of mined lithium is used to produce batteries commonly found in portable electronics and hybrid cars. In fact, The New York Times reports that the hybrid automobile market is likely to generate most of the demand for lithium in the near- to mid-term. The high oil prices in 2008 raised the profile of hybrid cars, which in turn raised lithium’s profile in the automotive industry.

But the defense industry is paying attention to lithium as well. One 2007 report by the Defense Logistics Agency referred to lithium batteries as a “critical go-to-war item” (pdf) and recommended expanding the number of vendors to avoid supply disruptions.

Lithium seems to have bright prospects in automotive manufacturing, along with its use in tech and communication devices that are a major part of modern life as well as modern warfare. Therefore, DoD is probably not the only organization worried about supply chain security. This prompts several important questions about lithium. First, where does the United States get its lithium? The answer to this question is not entirely clear. The United States does have domestic lithium deposits, mainly in two areas of Nevada. But only one U.S. company currently mines lithium, and the United States Geological Survey (USGS) refuses to release U.S. production numbers so that it can protect the company’s proprietary information. (And, interestingly, one of the Nevada sites is being developed by a Canadian company.) But most sources indicate that the United States is one of the top five producers of lithium in the world, even if the exact numbers are unclear.

The USGS does note the countries that export to the United States. Between 2004 and 2007, 61% of U.S. lithium imports came from Chile, while 36% came from Argentina and only 3% from other countries. Chile is politically stable, and Argentina’s long-term outlook is relatively healthy despite economic problems earlier in this decade, so it seems that this wouldn’t present tremendous concerns. But going forward, the center of lithium influence is likely to shift to Bolivia, since vast reserves lie beneath its Salar de Uyuni salt flats. For the United States, this could be a problem: the Morales government remains hostile to U.S. concerns, and there is potential for instability given serious rifts in Bolivian politics.

I suspect the lack of figures on U.S. lithium production (the only major lithium mining nation not to post estimates) has more to do with its use in the United States for military applications than any desire to “protect the company’s proprietary information”, but let it pass.

It’s not that Bolivia is unstable that worries the Department of Defense, either… it’s that Bolivians have this funny idea that their minerals belong to them, and don’t feel any obligation so start mining the stuff until they can cut a deal that they’re comfortable with.

Matt Yglesias (who I guess is a lefty… never really read the guy’s stuff before, but he’s quoted by a lot of the “usual suspects”) gets a little giddy himself, falling into the same assumption that the U.S. MUST have the lithium, and that the Bolivians will have to sell to “us”:

What happens is that at the margin Americans have lots of money and want more oil whereas Venezuela has lots of oil and wants more money so in exchange for money we get oil from Venezuela. It’ll be just the same with Evo Morales and his lithium. If US firms and consumers want lithium, they’ll have to pay money to the people who own it. But if the world’s largest lithium reserves were in Italy or Iceland or Ireland or Illinois it would still be the same—people who want access to lithium ore will need to pay money to the people who control it. Ownership of natural resources is useful insofar as it helps you get money. But developing countries whose economies depend on exporting natural resources need their customers more than we need them (if Iran stopped exporting oil it’d be a disaster for the US but a much bigger disaster for Iran) and it’s in everyone’s interests to keep the commerce flowing.

Yglesias is just one of those people who doesn’t “get it”… there’s no rule that says a “developing country” has to sell to anyone.  All this lithi-mania started when the Bolivians started making noises that they would develop their fields, for internal use (or for making car batteries in Bolivia).

Besides which, as the Lunatic Llama (a great Bolivian-focused site, that I added to my “blog feed” thingy) points out in his critique of Yglesias (and what got me to read the guy in the first place):

He argues, essentially, we shouldn’t worry because we have money, and since we have money, it’s a done-deal we’ll get a slice of the lithium. On the world commodity markets, I think that’s true. But if we want to get in on the extraction of lithium, and view that as a national security prerogative, I don’t think Bolivia will magically open the gates for us.

Nor will the Bolivians simply start mining if its not in their best environmental interests.  Evo Morales, wasn’t just flapping his gums  in a manic phase, when he said:

We must change the capitalist lifestyle, since the capitalist system favored obtaining the maximum profit possible, without taking into due consideration the lives of others or the environment.

…we must consider in detail the “well-being” of human individuals while also guaranteeing the well-being of Mother Nature, he said, adding: “Mother Earth can exist without human life, but not the other way around.”

Now I know why I wasn’t missing anything by not reading Yglesias — he’s predictable and reaslly doesn’t present anything new or stimulating.  He’s just a typical gringo, assuming the world has some economic duty to maintain his standard of living. And that the rest of the world “buys” the same cynical value system on which people in the  United States make their assumptions.

The assumptions made by the establishment and its critics in the United States are like those who — noting the falling oil reserves here in Mexico — and the declining revenues to the state from oil sales — suggest everything but simply using the oil domestically and not selling it at all. That proposal was beaten back… for now… but isn’t dead.

But, given that Mexico is still selling off natural resources, and does, to a large extent, still “buy” the U.S. mode of thinking… the whole kerfluffle over Bolivian lithium reserves might be slightly moot anyway. Mexican owned mining company, Pierro Sutti announced last week it found a mind-boggling 36,000 hectare of lithium and potassium, stretching through Zacatecas and San Luis Potosí states. Company president, Martín Sutti, told the press that potentially the field will produce 80 tons of lithium for every 10 feet of excavation.

Since Mexico presently doesn’t mine either lithium or potassium, even a small find would be news-worthy. But this find — if it is exploitable in anywhere near the quantities Sutti claims — will yield between ten and twelve tons of lithium carbonate yearly. This equals the annual production of the world’s present main lithium producer, Chile.

And, no doubt, the gringos will be able to buy it. At a fair price, to be determined at a later date. Or not.

(A snarky postscript for one critical reader:  I’m no spring chicken, but just about anyone under the age of 30 40 50 60 gets the reference in the  title).

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