The Significance of Lithium – Investing in the new battery technology

The Significance of Lithium – Investing in the new battery technology

                                  

Lithium, not until very recently, in its industrial history has been a very exciting material. It has however been a scientific curiosity of sorts being one the only three known metals which has a specific gravity less than water and can actually float on it. Most of its however is in its salt form and finds use in that form only. In the past thirty years, however, it has crept it way up to be one of the most important metals of the new Industrial age. Its many properties including that of being light weight makes it suitable for high density energy storage devices. Partly because of the need to do away with highly polluting internal combustion engine vehicles and partly because of the exciting possibilities being thrown up by lithium-ion battery technology, the world is now ready to step into its next stage of evolutionary development.

Lead acid batteries, which have been at the helm of energy storage technology for more than a century, are now looking unsuited to meet many of mankind’s ever evolving needs. The market for lithium-ion batteries has grown so rapidly in the past two and a half decades that, it has dislodged the popularity of the Lead acid battery as the most produced and used battery, with the latter holding the coveted position for a very long time. Be it laptop computers, mobile phones or electric vehicles lithium-ion batteries can these days be found everywhere. During the 1990s the commercial availability of the lithium-ion batteries was responsible for the cellular phone revolution which was followed by the smartphone and tablet industry taking-off towards the late 2000s. Since its inception not much change has taken place in the way these batteries work but the dynamism that it offers to novel applications are being found out every day. In fact, many new technologies that are being developed today have lithium-ion battery technology at its foundation.

Given the electrochemical and metallurgical properties of this material more than half of the world production of lithium goes into the production of batteries and the other half finding usage in ceramics, medicine, paints & dyes and metallurgy. The demand for this material has also increased exponentially with significant amounts of this material being added to the already available pool every day. Another very important aspect of this technology is its recyclability. Unlike lead-acid battery technology which has very limited recyclability, lithium-ion batteries can be recycled without much difficulty whereby there will be less pressure on the sourcing and use of fresh materials. The most important feature of this battery technology, however, is its scalability. Lithium-ion battery usage ranges from operation of wrist watches to running city buses with no short fall in efficiency. The only shortfall of this technology is its animosity with water and water vapor, which has been the cause of many an accident worldwide.

Investment case

The exponentially rising usage of lithium-ion technology makes it a prime candidate for incremental investments. Its expanding usage with mobile phone, smart technology devices and electrical vehicles ensure that a significant amount of virgin material needs to be produced. Already significant amounts of investments have been made by countries and corporations to develop resources for the production of this material. Still significant potential exists for this material as demand far outstrips supply.  The largest known resources of this material exist in south America followed by Australia and Asia. The largest consumer of this commodity is China, followed by the United States of America and Europe.

Investment opportunity in Lithium-ion technology exists in two broad areas; mining and production of lithium-ion material and production of lithium-ion battery.

Lithium- ion material production

There are two primary sources from which lithium ion material is produced. One is through mining of lithium mineralization found in igneous rocks composed of large crystals of this mineralized element called spodumene (lithium aluminium inosilicate) and the other from water bodies having a high concentration of lithium carbonate (lithium brine) which is harvested the same way as salt is made from sea water.

There is a third way, of course, that of recycling but we will keep it out of scope of discussion for now as production of virgin material is an established and far cheaper alternative in the present times. The global supply of this element historically, was from processing of hard-rock mineralized ore formations like any other mineral ore, during the early 1980s. However, with the large-scale discovery of lithium carbonate containing brines in South America, large shallow pond types were used for evaporation and harvesting of this salt. Today the total world production of this material is evenly distributed between these two methods.

New resources for processing of lithium-ion are being sought out and discovered constantly with new players jumping into the fray every day. Any new discovery has the potential of being incrementally priced given the exponential growth in demand, and more so because many a country are doling out incentives to promote the exploration and discovery of this material in their locales.

Production of Lithium-ion energy storage devices

The technology, though, has not advanced much since the day of its initial developments; what has changed however is its cost of production. China is currently the world leader in the production Lithium-ion batterie. Its large and cheap manufacturing bases ensure that goods produced in that country are the cheapest and are able to kill competition from anywhere in the world. Multinational companies are increasingly setting up bases in China to take advantage of this lower production cost although new research work is also going on to determine how to make these batteries even more cheaply.

Conclusion

Lithium-ion battery technology is the most interesting investment idea of the present day, not only for the diversity in its usage but also in terms of its ever-expanding market size. Yet the golden era of Lithium metal and Lithium-ion battery technology is yet to come, as the world inches closer to the era of battery- powered automobiles including commercial vehicles.

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