Monday, November 8, 2010

Lithium: Contentious Commodity Du Jour?

As the primary component of those rechargeable lithium ion batteries mainly used in laptop computers and hybrid cars, is lithium now the commodities traders’ contentious commodity du jour?

By: Ringo Bones

Ironically during the height of the Cold War when the only major use for lithium was in H-Bombs and pharmaceuticals for the treatment of manic-depressive disorders, it never became the commodities traders’ commodities trading of contention, not to mention the flood of venture capital investment stocks and penny-stocks vying for us to invest in them. A few decades later where our 21st Century society is currently preoccupied with the pursuit of instant information at one’s fingertips and eco-friendly power and mobility, lithium – as the primary component used in rechargeable lithium ion batteries – has now become one of the commodities of geopolitical primacy. But isn’t there enough lithium to go around?

Even though it is relatively widespread, lithium comprises only 0.0065% of the Earth’s crust. Lithium is primarily obtained from the minerals spodumene – a lithium aluminum silicate; lepidolite – a basic lithium silicate known as lithium mica and amblygonite – a lithium aluminum fluorophosphate. Nearly 50 other minerals and many mineral waters contain varying amounts of lithium and traces of the element have been found in meteorites, soils, sugar beets, tobacco, cereal grains, coffee, seaweed, blood, milk, and even in muscular and lung tissue.

During the height of the Cold War, the world’s leading producer of lithium was the country then known as Rhodesia which - since 1980 - is called Zimbabwe. At present, the world’s strategic supply of lithium can be found in the dry lakes of Bolivia in the form of lithium carbonate. According to Bolivia’s Mining Minister Jose Pimentel, Bolivia is estimated to contain 40% of the world’s commercially viable lithium supply. As one of the poorest countries in South America, the Bolivian government wants a mining deal from multinational firms that would benefit Bolivia’s poor and because of this almost all multinational mining firms are currently reluctant to make a deal with the government of President Evo Morales.

Our current high demand for mobile phones, laptops and batteries for hybrid cars just to mention a few have made lithium into a commodity of strategic importance not seen since the height of the cold war. Like crude oil, commercially viable deposits of it are found in places that have a falling out with globalized capitalism. And since the form we use it requires that the naturally occurring lithium be chemically processed into something useful for the fabrication of rechargeable lithium ion batteries, lithium – like the rare earth metals - might well be our current lucrative commodity that also raises geopolitical contention.

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