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January 30, 2007

Liithium-Ion and Going to Bolivia

Butch Cassidy: Kid, the next time I say, "Let's go someplace like Bolivia," let's go someplace like Bolivia.
- Butch Cassidy & the Sundance Kid (1969)
The current ardor for lithium-ion batteries has, given the material relative scarcity, some interesting economic and geopolitical consequences, not least of which is there is insufficient supply:

"Analysis shows that a world dependent on lithium for its vehicles could soon face even tighter resource constraints than we face today with oil," wrote [William] Tahil, pointing out that lithium-rich South America would become the new Middle East. "Concentration of supply would create new geopolitical tensions, not reduce them."

The biggest source of lithium – either as a carbonate or chloride – is the limited number of salt pans and salt lake deposits around the world, mostly in countries such as Chile and Argentina. The last and biggest untapped reserve of lithium salt, according to Tahil, is in the Bolivia salt pans.

"Bolivia is said to contain lithium reserves of 5.4 million tonnes or nearly 50 per cent of the global lithium metal reserve base, and an even higher percentage of the lithium salt reserves," he writes. And while attempts have been made to get at these reserves, "The current political situation in the country is acting as a strong disincentive for western mining companies to operate there."

[Meridian International Research via Clean Break]

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Comments

1. Comment by George Tsiolis -- January 30, 2007 @ 4:52 PM

Paul, you are going to love this. Take a look at the latest AAPL transcript on Seeking Alpha

http://seekingalpha.com/article/24432

You will note the sponsor is one of our clients - Avalon Ventures - a Canadian junior resource company with advanced level projects that is positioned to take advantage of the shortage of Lithium and other Rare Earth Metals (REM's) crticial to consumer electronics and products such as:

- Flat Panel Screens
- MP3 Players
- Hybrid Cars
- Rechargeable Batteries

The rare metals are in growing demand because of their critical role in a global economy that is becoming increasingly reliant on high technology. Rare elements like indium, lithium, neodymium and beryllium offer unique properties that are vital in applications such as electronics, rechargeable batteries and specialty metal alloys.

Specific recent examples include the strong demand for indium because of its critical role in flat screen television technology, as well as, the rare earth element neodymium used to make the super magnets that are integral to the electric motors in hybrid cars. A typical hybrid car contains over 45lbs of rare earth elements.

Without REM's, most consumer electronics just can't operate. As such, "Intel Inside" is quickly going to be replaced with "Rare Earth Metals Inside".

Sponsoring the Apple transcript was a great way to get the message well beyond the mining crowd and in front of investors that understand the growth of consumer electronics.

Back in April of 2006, Cramer called Beryllium "the next Titanium" and we wrote about it here

http://www.agoracom.com/ir/avalon/message/467775

There is a potentially lucrative opportunity for those that see the surge in rare earth metals as a result of the unstoppable demand for consumer electronics. Lithium, Berillium, Yttrium, Tantalum. Names to remember.

Best,
George

2. Comment by George Tsiolis -- February 1, 2007 @ 9:15 AM

FYI, Bolivian Official Calls for 600% Mining Tax Increase.
http://www.resourceinvestor.com/pebble.asp?relid=27851

George

3. Comment by Jon -- April 3, 2008 @ 11:41 PM

Tahil's findings are based on old data. Here's the most recent report on world Lithium reserves:

http://lithiumabundance.blogspot.com/