energy insights

From Obscurity to Stardom, Lithium Now in the Spotlight

Not that long ago, lithium was overlooked by most people. Even though it’s one of the lightest metals in the universe, there is a long list of other metals that have been far more consequential. But that is certainly beginning to change.

Ever since the invention the lithium-ion rechargeable battery in the late 1970s, lithium has been ascending into the worldwide vernacular of important minerals.

You wouldn’t exactly call lithium a precious metal like rhodium, platinum, gold or silver, but it’s becoming so valuable some people are starting to call it white gold.

So, why is lithium increasing in value and how much of it is out there?

There may be a few reasons the price of lithium has increased so dramatically, but one big reason is the growth of the lithium-ion battery industry. Whittingham’s invention has been used for decades to power various electronic devices, but the lithium-ion battery became a household name with the advent of the smartphone.

But the smartphone is small potatoes compared to the demand brought on by the electric vehicle revolution. There are more than 17.6 million EVs in the world today and pretty much all of them use some type of lithium-ion rechargeable battery for power. The Nissan Leaf is one of the smaller EVs on the market, and its battery requires about 9 pounds of lithium, so it doesn’t take much calculation to understand lithium’s rapid rise to stardom.

Like oil and natural gas, there’s a lot of lithium in the world, but that doesn’t mean it can all be produced economically. Much of it is diffusely scattered in low concentrations and cannot be mined at a profit, even at today’s prices.

There are terms that characterize natural resources, such as lithium. The term “resource” refers to the amount of lithium discovered before it is produced. “Reserve” is a term the mining industry uses to describe lithium that can be accessed and mined.

According to the U.S. Geological Survey’s (USGS) 2022 assessment of lithium, there are 89 million metric tons of lithium resources in the world. But the USGS only considers 22 million of those metric tons as reserves because they can be produced economically with existing technology. The remaining 67 million metric tons are beyond our reach for now. But those numbers tend to change over time with new discoveries and as technology advances, markets evolve, and government regulations open access to additional resources.

For example, in its 2022 report, the USGS survey indicates that the United States has 750,000 metric tons of lithium reserves, but the country has 9.1 million metric tons of lithium resources. That is a huge disparity that may be driven by the fact that there is only one operating lithium mine in the United States, but there are several proposed mining operations waiting for U.S. regulatory approval. Once those mines begin operating, we could see U.S. reserve volumes jump significantly.

As an example, consider how the world of lithium has changed over the past decade. The USGS lithium survey from 2012 was starkly different than the 2022 report. In 2012, the agency reported only 34 million metric tons of lithium resources worldwide and 4 million metric tons in the U.S. Meanwhile, the agency reported 13 million metric tons of lithium reserves worldwide, including 38,000 metric tons in the U.S. So, between 2012 and 2022, world lithium resources increased 262% and world lithium reserves increased 59%. During the same time, global mine production increased threefold, from 34,000 to 100,000 metric tons.

At the center of a decade of the lithium market growth — electric vehicles. Some might say the EV was born with EV pioneer Tesla basking in the success of its first-generation vehicle, the Roadster. Worldwide EV sales exploded in 2012, reaching 53,000, which was triple the number sold in 2011, and EV sales have been increasing annually ever since, reaching 6.75 million in 2021.

And all that EV market growth has led to a rush on lithium, the once not-so-precious metal that people are now calling white gold.