Why Lithium Matters
In early August, when American troops were pulling out of Kabul and the Taliban was taking over, I read an article about Afghanistan's natural resources. The review most notably pointed to Lithium. This was the third or fourth time in the past year the importance of lithium had stood out. Knowing there was a connection between lithium, batteries, and electric vehicles, my mind immediately jumped to Tesla’s sales growth in recent years. Somewhere along the way I had heard, “the data rush is the new gold rush”, but lithium seems to be a close second. Knowing not only are Teslas selling like hotcakes but other car manufacturers are deeply investing in electric vehicles (EVs), and batteries are essential to these huge consumer goods, I was curious to learn more about how lithium is inter-connected to this sprouting market. Why exactly does lithium matter? And what diplomacy, beyond Afghanistan, is this affecting world-wide?
It starts with the need for alternative sources of energy. We know of the traditional fossil fuels (coal, natural gas, and petroleum). We have experimented and used nuclear energy. But due to the pervasive climate change, renewable energy sources, like that of hydrogen, wind, solar, geothermal, biogas, and biofuels, are on the up-and-up. We need to extract energy from one source, and store it. Hence batteries. But as technology products that use batteries (think anything that uses power and is mobile), come-to-market more and more, the use of batteries rises exponentially. And the need to efficiently restore the energy rises exponentially. Lithium can do this last part, really well.
So what is Lithium? Lithium is an element. The Lithium-Ion or Li-Ion batteries are a type of rechargeable battery that’s commonly in the electronics industry today. Apple clearly states the efficiency on their website, “lithium-ion batteries charge faster, last longer, and have a higher power density for more battery life in a lighter package”. Apple uses lithium-ions in their consumer tech products - proportionally, a small piece of the lithium industry.
Big Tech such as Apple, Google, and others are developing (or hinting at the development) of producing electric cars. The Biden Administration recently outlined a plan for 50% of cars to be electrical in the next nine years. In fact, with the EV market growth alone, lithium is going to become extremely valuable world wide. So between Big Tech and the US Government investing into car technologies that require efficient batteries, this element isn’t going away any time soon.
But that’s not all. Lithium-ion is also used in electric-boosted bikes, scooters, wheelchairs, storing solar energy, smart phones, pacemakers, watches, thermometers, remote car locks, hearing aids, and chargers, among many many other mobile electric-enabled technologies.
As you can see, lithium-ion is needed in every house in the western world, and will be gaining traction ten-fold in the next decade.
So how does this shake-out with diplomacy? Lithium is abundant, it’s in a lot of rock. Predominantly in Chile, Argentina, China, Australia, and Zimbabwe. The US houses quite a bit too. One example is Americas Corp extracting Lithium in Nevada for Lithium-Ion use. As you can imagine, the race to obtain and reserve this element showcases strength on the world-stage for future superpower prowellness. Examples of direct or indirect favors for later friendship is a constant across the globe. China gave ample medical care and equipment to Chile during the pandemic. Condescendence? I think not. In fact, there’s a term for it, “mask diplomacy”. India and Australia are partnering up. The partnership helps both countries as they work to become more green/EV car based as well as add all the mobile consumer technologies to their peoples' lifestyles. According to India’s government’s business website, predicts their lithium-ion EV market alone to be worth $15Billion in the next six years.
Afghanistan holds an estimated $1Trillion dollars worth of minerals. A large part of this is Lithium. And China has its eye-on-the-prize. Perhaps they are hoping to trade access to Afghanistan's minerals, for support of and/or direct funding to the Taliban. The US government can block some of this today, but not once the troops completely pull-out of the middle-eastern country. The twenty+ year war isn’t just about keeping extreme terrorists out-of-power. It’s also key to our lithium-ions, batteries, and key technology growth.
So why does lithium matter? Today, it is the key to restoring regular battery-power energy in everything from smart phones to pacemakers to electric vehicles. It's essential to international diplomacy. Twenty years ago, when the US invaded Afghanistan, the iphone and Tesla didn’t exist. In the next twenty years, these consumables, along with hundreds of other technologies, will become essential to our modern lives. That's why Lithium matters - to run our present and future lives.