5 ms·

Wait until the "OPEC" of lithium emerges from the coming price wars... If you don't think that will happen, I have some land in Yuma, Beach front.

pg_bot 9y ago
Cartels are unstable by their nature, OPEC is the exception not the rule. Cartels can only thrive when there is a lack of competition and strong enforcement between member nations. There is a reason why we don't hear of coal or natural gas cartels which are substitute goods for oil.
- cirgue 9y ago
  Even OPEC is not much of an exception: they've only occassionally been effective at coordinating outputs, and supply dynamics typically overwhelm OPECs ability to respond.
  - Kadin 9y ago
    OPEC is definitely an exception in that it stayed together even though there are multiple times when it wasn't clearly in any of the members' economic best interests to participate or maintain the cartel's supply control. This is pretty obviously because it's a political rather than economic organization: the member states have political reasons for wanting to remain in control of the supply which probably exceed the rational reasons for pursuing revenue maximization. It seems unlikely that the countries with significant lithium reserves have enough in common politically, to maintain a similar cartel. Not that some might not try. But they will also have to deal with the fact that OPEC did it first, and major powers may be unlikely to allow that to be repeated.
    - foota 9y ago
      OPEC may exist as an organization but its members generally don't abide by quotas.
hwillis 9y ago
Highly unlikely. Lithium is one of the cheapest and easily-supplied materials required. By some measures a larger percentage of world cobalt production is used for batteries than lithium. Lithium and cobalt are both in high supply in almost all countries, unlike oil.
- oasisbob 9y ago
  If lithium is abundant in so many countries, why is it mined in so few? Compare: https://en.wikipedia.org/wiki/List_of_countries_by_lithium_production https://en.wikipedia.org/wiki/List_of_countries_by_lithium_p... https://en.wikipedia.org/wiki/List_of_countries_by_oil_production https://en.wikipedia.org/wiki/List_of_countries_by_oil_produ...
  - hwillis 9y ago
    Wikipedia isnt exhaustive but the real reason is that hard rock deposits, primarily spodumene, are only economical at high volumes. Spodumene is present basically everywhere hard rocks are. Lithium brine, which makes up almost all of all current battery lithium, exists almost totally in three countries.
    - stale2002 9y ago
      Well, ok, but that contradicts your statement that Lithium is available in almost all countries. It is only "available" in all countries if those countries want to pay an extremely high price, right?
      - Tuna-Fish 9y ago
        "Extremely high" requires the qualification that it's only high in comparison to the current market price, but not high in the sense that it makes use in batteries uneconomical. Currently, a very small proportion of the cost of the battery is lithium. As battery production increases, the market price of lithium will go up, potentially by several times. This will make spodumene deposits economical to extract, but it will not have a meaningful effect on the cost of the batteries. The preliminary work to open these deposits for extraction has started in many countries, for example the Keliber project in Finland is currently undergoing the environmental effect study. http://keliber.fi/ http://keliber.fi/
tuna-piano 9y ago
How many industries industries are currently controlled by cartels? Maybe OPEC in oil and DeBeers in diamonds. But even in those cases, the cartels still have limited overall effects. OPEC has trouble policing its members, and DeBeers has competition. Why do you think that lithium producers will be able to form a cartel, when almost no one else can?
megablast 9y ago
> If you don't think that will happen, I have some land in Yuma, Beach front. Talk is cheap, and staying stuff like this makes you just look foolish.

pg_bot 9y ago

Cartels are unstable by their nature, OPEC is the exception not the rule. Cartels can only thrive when there is a lack of competition and strong enforcement between member nations. There is a reason why we don't hear of coal or natural gas cartels which are substitute goods for oil.

cirgue 9y ago
Even OPEC is not much of an exception: they've only occassionally been effective at coordinating outputs, and supply dynamics typically overwhelm OPECs ability to respond.
- Kadin 9y ago
  OPEC is definitely an exception in that it stayed together even though there are multiple times when it wasn't clearly in any of the members' economic best interests to participate or maintain the cartel's supply control. This is pretty obviously because it's a political rather than economic organization: the member states have political reasons for wanting to remain in control of the supply which probably exceed the rational reasons for pursuing revenue maximization. It seems unlikely that the countries with significant lithium reserves have enough in common politically, to maintain a similar cartel. Not that some might not try. But they will also have to deal with the fact that OPEC did it first, and major powers may be unlikely to allow that to be repeated.
  - foota 9y ago
    OPEC may exist as an organization but its members generally don't abide by quotas.

hwillis 9y ago

Highly unlikely. Lithium is one of the cheapest and easily-supplied materials required. By some measures a larger percentage of world cobalt production is used for batteries than lithium. Lithium and cobalt are both in high supply in almost all countries, unlike oil.

oasisbob 9y ago
If lithium is abundant in so many countries, why is it mined in so few? Compare: https://en.wikipedia.org/wiki/List_of_countries_by_lithium_production https://en.wikipedia.org/wiki/List_of_countries_by_lithium_p... https://en.wikipedia.org/wiki/List_of_countries_by_oil_production https://en.wikipedia.org/wiki/List_of_countries_by_oil_produ...
- hwillis 9y ago
  Wikipedia isnt exhaustive but the real reason is that hard rock deposits, primarily spodumene, are only economical at high volumes. Spodumene is present basically everywhere hard rocks are. Lithium brine, which makes up almost all of all current battery lithium, exists almost totally in three countries.
  - stale2002 9y ago
    Well, ok, but that contradicts your statement that Lithium is available in almost all countries. It is only "available" in all countries if those countries want to pay an extremely high price, right?
    - Tuna-Fish 9y ago
      "Extremely high" requires the qualification that it's only high in comparison to the current market price, but not high in the sense that it makes use in batteries uneconomical. Currently, a very small proportion of the cost of the battery is lithium. As battery production increases, the market price of lithium will go up, potentially by several times. This will make spodumene deposits economical to extract, but it will not have a meaningful effect on the cost of the batteries. The preliminary work to open these deposits for extraction has started in many countries, for example the Keliber project in Finland is currently undergoing the environmental effect study. http://keliber.fi/ http://keliber.fi/

tuna-piano 9y ago

How many industries industries are currently controlled by cartels? Maybe OPEC in oil and DeBeers in diamonds. But even in those cases, the cartels still have limited overall effects. OPEC has trouble policing its members, and DeBeers has competition. Why do you think that lithium producers will be able to form a cartel, when almost no one else can?

megablast 9y ago

> If you don't think that will happen, I have some land in Yuma, Beach front. Talk is cheap, and staying stuff like this makes you just look foolish.