"Kick Start Or Kick Over — Can The U.S. Defeat Russia In The Lithium Battery War?
I have to be careful when linking to John Helmer at Dances with Wolves.
He's been reporting from Russia for a very long time, which raises the red flag question, why are the Rooskis putting up with him.
And the answer, of course, is that he serves some purpose for the regime and since he's in media it's probably because he's somewhere on the spectrum between CNN's Eason Jordan:
CNN chief news executive Eason Jordan yesterday sent a memo to his staff
defending his decision to withhold information about how Saddam
Hussein's regime had intimidated, tortured and killed Iraqis who had
helped the cable news network over the years....
His approach became known as "Taking the Eason Way Out...". Catchy, someone should write a song.
Somewhere between that and the New York Times' Pulitzer prize winner, Walter Duranty who was an actual mouthpiece for Stalin.
So with that heads-up here's Helmer, September 28:
In January of this year the United States Geological Survey (USGS)
reported the reserves of the nine leading countries in the world which
mine lithium, the new fuel to power electric batteries. Chile led,
followed by Australia, Argentina, China, and the US which claims to have
one million tonnes. Russia was left out of the USGS chart.
Russian sources report its lithium reserves are currently between 3.5 million and 5 million tonnes;
that’s at least three times more than the US. The US is also much
more limited in its capacity to develop new domestic lithium mines
compared to Russia. Bolivia was also omitted from the US Government
chart because its reserves were called unproven resources. In fact and
in the ground, Bolivia leads the lithium world with 21 million tonnes.
The difference between what USGS reports and what happens next isn’t
the distinction in geologists’ terminology between reserves and
resources. It’s US Government policy to stop, sabotage and destroy
Russia’s ability to meet its lithium requirement from its own, domestic
sources, or by importing from friendly countries like Bolivia.
In response, a new plan for combining lithium mining projects in
Bolivia and Russia will produce a surplus of Russia’s foreseeable
requirement for lithium battery production. But not only that. Allied in
technology sharing, investment, trade, and political agreement, the two
countries will protect each other in the conservation of the lithium
market. If everything goes according to plan, Russia, Bolivia, and the
three BRICS states – Argentina, Brazil and China – will dominate the
trade in global lithium. They are already discussing the formation of a
collective marketing organisation – a lithium OPEC.
Unless the US can stop them.
In the latest official paper issued by the State Department on July
23, “the bilateral relationship between the United States and Bolivia”
is “strained. Despite these challenges, the United States maintains a
strong and respectful relationship with the Bolivian people, with whom
we work to advance human rights, entrepreneurship, and cultural and
educational initiatives…However, the United States remains concerned by
anti-democratic actions and the politicization of the legal system.”
This is how the lithium war is starting.
Washington’s version of the world’s lithium table looks like this:
WORLD LITHIUM PRODUCTION AND RESERVES, ACCORDING TO THE US GEOLOGICAL SERVICE
In its footnote to the table, the USGS adds: “identified lithium
resources in other countries have been revised to 86 million tons.
Identified lithium resources are distributed as follows: Bolivia, 21
million tons; Argentina, 20 million tons; Chile, 11 million tons;
Australia, 7.9 million tons; China, 6.8 million tons; Germany, 3.2
million tons; Congo (Kinshasa), 3 million tons; Canada, 2.9 million
tons; Mexico, 1.7 million tons; Czechia, 1.3 million tons; Serbia, 1.2
million tons; Russia, 1 million tons; Peru, 880,000 tons; Mali, 840,000
tons; Brazil, 730,000 tons; Zimbabwe, 690,000 tons; Spain, 320,000 tons;
Portugal, 270,000 tons; Namibia; 230,000 tons; Ghana, 180,000 tons;
Finland, 68,000 tons; Austria, 60,000 tons; and Kazakhstan, 50,000
tons.”
The US is the only country in the table to try to keep secret its
production of lithium. “W” in the table, according to the USGS, stands
for “withheld to avoid disclosing company proprietary data. — Zero.” In
fact, there are at least three publicly listed US lithium miners, and
they are required by law to report their lithium results several times
each year.
Albemarle Corporation, for example, sells its shares on the New York
Stock Exchange on release of quarterly production and financial reports
from the company’s lithium projects in the US (Silver Peak, Nevada, and
Kings Mountain, North Carolina), and in Australia, Chile, and China. For
example, in 2022 the company reports it produced 34,000 tons of lithium
carbonate equivalent (LCE); but just 2,000 tons of this aggregate were
mined in the US. Because US lithium consumption is so heavily dependent
on foreign imports, Albemarle has just announced Pentagon funding for
mining equipment to reopen the mothballed Kings Mountain mine in North Carolina.
This follows a US Energy Department grant of a year ago to construct a
lithium concentration plant at the mine. Altogether, US Government
funding to revive Kings Mountain currently exceeds a quarter of a
billion dollars.
According to Vygon Consulting, a Moscow analytical company
specializing in rare metals, Russia’s reserves are far greater,
exceeding Australia, the US, and China on the USGS table, with a cost
of production for ore deposits that is lower than the Australian and
North American mines, and a brine extraction cost comparable to the
South Americans. By 2040, Vygon is projecting annual Russian production
of 600,000 tonnes of lithium – a volume which will turn into exports to
the global demand market of roughly half the deficit between supply and
demand estimated by then.
This means that for Russia, the strategic defence and security
requirement for lithium can be met quickly so that import dependence can
be ended by 2025. On the other hand, for the longer term in economic
war planning against the US and Australia, there is domestic competition
for state support of new projects between the established state
combines like Rosatom, Gazprom, and Rosneft; the established oligarch
miners like Norilsk Nickel and Alrosa; new commercial enterprises; and
between regions from Dagestan in the west to Murmansk in the north and
Irkutsk and Yakutia in the east.
Confidence in defeating the Americans is an open secret in Moscow;
who will benefit domestically between the state companies and the
oligarchs is a closed secret because it has yet to be decided.
There has been no lithium mining in Russia since 1997 when mining at
the Zavitinsky deposit in Krasnoyarsk stopped. The reason is that there
has been no demand at a price for the metal to make mining of proven
reserves and develop fresh resources profitable enough. Imports were
cheap and supply reliable until 2022. Chile and Argentina then stopped
exporting to Russia; several African states halted exports of the raw
mineral and required processing plants to be established instead.
Lithium is a rare metal, not because it is scarce but because it is
widely distributed at low concentrations in various mineral compounds
and salts in
the earth’s crust, in seawater, and in oil and gas fields. Because
Russia dominates the world in the last of these, its potential capacity
for extracting lithium is considerable. Russia’s oil and gas producers
have worked this out. So has the US Government.
Low concentration usually means high cost of production. The abrupt
surge in price to peak at about $90,000 per tonne in 2022 reflected the
dramatic change in international supply, demand and mine profitability
calculations. Although the latest investment bank forecasts and stock
market projections indicate
the price in global trade will continue to decline, the cost of
production will remain at a level at which new investment in lithium
source extraction will be profitable.
The sanctions war against Russia, both to cut off imports and stop
exports, leaves no choice for Russia but to restart domestic lithium
deposits; create new ones; protect the security and stability of supply
from traditional import sources in South America; and develop new
methods for trade and price control to defeat US sanctions....
