Is there a Lithium “OPEC” in our future?

Argentina looks to establish organization

Rodolfo Tecchi, a director within the Argentine Ministry of Science and Technology presents the idea that Argentina, Brazil and Chile could form an “OPEC like arrangement” with regard to lithium production. His thought is the maintenance of pricing through production controls, such as that practiced within OPEC. Even mining officials in Argentina are not sure that this is the correct approach, calling the discussion “premature”.

One reason that perhaps at least some Argentinian’s may be proposing such an organization is this – Chile currently controls 44 percent of worldwide lithium revenue, Australia – 25 percent, and China – 13 percent, with Argentina coming in with just 11 percent of this cash flow stream. Together Argentina, Brazil and Chile currently control 85 percent of the world’s lithium reserves, though Argentina’s are just over one-tenth of those of Chile. In fact, Chile controls more lithium than Argentina, Australia, Brazil, Canada, China, United States, and Zimbabwe combined. Some Argentine’s may feel that if they don’t take action now to protect their minority position, they may have little leverage later on.

During Carlos Ghosn’s sustainable mobility presentation recently, Mr. Ghosn referred to the idea that electric cars may evolve over the next decade. While most current electric vehicles (EVs) use batteries to store electricity, Mr. Ghosn sees a possible future of fuel cell EVs where large storage batteries will not be required. We have written about Honda’s FCX Clarity, which is currently offered in a limited distribution closed-end lease program in California. Using hydrogen as a power source will displace lithium requirements for automobile batteries, though it is possible that electric devices such as laptops and mobile phones will still require the material for their batteries. Recent developments in lithium battery technology may reduce the lithium content requirements for applications such as these as well. With these developments going on around them in this fast moving EV world, perhaps those who propose this idea see a limited opportunity and wish to capture what they can while they can.

Source: AFP