The growing demand for devices with built-in rechargeable batteries is leading to a significant increase in the efforts made to procure lithium, a key component in the production of modern cells, according to The Economist.
Analysts describe the current state of affairs as being somewhat frantic, with various organisations and bodies attempting to secure controlling stakes in lithium producers such as Chile’s SQM. The upshot of this is that the price of lithium carbonate was able to double in the space of just two months at the end of last year.
Much of this material is exported to China, where manufacturers are responsible for producing batteries and the devices that use them, including smartphones and laptops as well as devices using custom battery packs.
Lithium To Replace Fossil Fuels?
Investment bank Goldman Sachs has even gone so far as to label lithium as being the substance which will replace fossil fuels to become one of the world’s most valuable and hotly contested natural resources. And it is not just the rise of mobile technology that is causing this change, but also the emergence of eco-friendly battery-powered electric vehicles in larger numbers than ever before.
At the moment, about a tenth of the cost of a rechargeable car battery is attributed to lithium, which in turn makes up approximately five per cent of the total materials used in the production of this type of cell. But with prices rising so rapidly as demand outpaces supply, analysts fear that this could lead to added expenses in the near future.
Experts are also worried about the fact that the industry surrounding the production of lithium is concentrated into a relatively small number of places, with Chile joining places like Australia in being one of the few countries currently capable of generating this precious material. And while there is a lot of lithium available for extraction, it is an expensive process which also takes time, leading to pricing problems.
Lithium-ion batteries are especially appealing to car makers because they are lighter than alternative technologies and mean that vehicles using them can be more efficient as a result. And the compact nature of the market is unlikely to persist with so much investment being channelled into it.
Companies seeking custom battery packs for devices of all sizes are getting in on the rechargeable trend, and with more spending power involved, costs should be kept down in the long term.