With Switch To EVs, Will Lithium Countries Become The Next OPEC?

As the world switches from petroleum fuels to lithium batteries in electric vehicles, do we need to worry about creating a new Middle East-type cartel that can once again hold the world’s energy supply hostage?  The concern might have some justification, as just four countries have the largest reserves of lithium (Australia, Chile, Argentina and China). Chile, in particular, is thought to have more than 50% of known economic reserves.

The Conversation describes where battery raw materials come from, and concludes somewhat positively:

The supply of major materials for lithium batteries is not under threat any time soon, but demand is likely to open up new areas for extraction, bringing new risks.

The political situations of countries with large reserve shares and large shares in the processing of these metals can quickly become uncertain. Will countries like Bolivia allow unrestricted export of lithium? Will Democratic Republic of Congo or China restrict cobalt supply?

Environmentally, the lithium-ion battery’s future is also worrying. The production of electrode materials may become more environmentally damaging. On the other hand, the impact of the lithium supply itself is likely to improve.

Ultimately, recycling lithium should play a part in mitigating political, environmental and economic risks in the future, but high rates of lithium battery recycling are yet to be seen.

It’s always a risk once we become overly dependent on one source of energy (or in this case, energy storage) that it will lead to national security issues with foreign control over those resources.

But it’s worth noting that the U.S. has its own supply of lithium, and also that current estimates from the U.S government at least indicate an adequate worldwide supply to meet demand (although Greentech Media raises some alarm bells on this question).

Ultimately, this is a long-term potential problem that can likely be addressed with further innovation in manufacturing, battery development, and recycling and reuse of existing batteries.  And it’s certainly not a reason to avoid investing in battery electrification of transportation.

But at the same time, if I was working in national security, it would be an issue to track going forward.

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