A Game-Changing Energy Discovery
Many of the world’s largest economies are betting on batteries. While the challenges become clearer by the day, if batteries will bolster the move toward a reliable alternative energy source, lithium is critical. Up until recently the largest lithium reserves were relatively known, but a recent discovery of an ancient supervolcano in Nevada just might be the world’s largest lithium deposit to date.
Chile is currently home to the world’s largest lithium reserves and the South American country is the world’s second-largest producer. Australia follows with Argentina, China, and the US rounding out the top five. This new discovery will potentially nudge the US up the list and radically alter the supply landscape. Last year, the average battery-grade lithium carbonate price was $37,000 per metric ton. Some estimates point to the supervolcano’s potential worth just shy of $1.50 trillion.
The Nevada supervolcano was believed to have formed roughly 19 million years ago. Previous eruptions are thought to have pushed minerals to the surface via faults and fractures leaving lithium-rich smectite clay. In nearby Thacker Pass, the firm Lithium Americas had drilled 13.7 million tons of lithium carbonate, previously thought to be the largest US deposit. The supervolcano’s deposit is estimated to be in the range of 40 million tons.
China is a dominant player in lithium refinement with approximately 90% of the metal mined at a global scale refined in the Asian superpower. If the US could move to refining its own deposits this has the potential to change the dynamics from a supply, price, and geopolitical perspective. The US currently imports hundreds of millions of lithium-ion batteries every year with China, South Korea, and Japan as the principal suppliers. Since 2020 the total import value of batteries has tripled, numbering $13.9 billion in 2023.
As with most extractive industries, there are environmental concerns. The Bannock, Paiute, and Shoshone people are protesting what they deem would be “100 acres of disturbance” on sacred Native American land on the Nevada/Oregon border. Another group, the People of the Red Mountain, claim upwards of 91 cultural sites in the proposed drilling area and are concerned over the longer-term effects of lithium extraction. Extraction entails the use of 500,000 + liters of water per ton of lithium and the digging of up to 30 million tons of earth.
In Argentina, environmental groups complain of contaminated streams near the lithium operation Salar de Hombre Muerto while the Chilean landscape is littered with mountains of discarded canals and salt that have resulted in an odd, unnatural blue hue. The upcoming battles will likely be regulatory in nature.
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