The material here is a summary of the post Lithium and Its Limits.
Supply and Demand
Classical economics states that supply will always meet demand. If the demand for a resource or product increases then the price of that resource will probably go up, but it is taken for granted that the supply is always there. In other words, supply and demand are fundamentally a financial issue.
One of the themes of the posts at this site is that we have entered a world where this assumption no longer applies. The Earth is finite, as are its resources. As we use up those resources further supply is increasingly constrained by the laws of physics and thermodynamics. Printing money will not make new resources appear out of nowhere. Once they are gone, they are gone.
The usual example of resource limits is that of crude oil and the issue of Peak Oil. However, the concept of physical limits applies to virtually all natural resources. In this post we look at the example of the element Lithium (Li), a critical component of Lithium-ion batteries. These batteries are used to provide power for a wide range of electrical devices, ranging from mobile phones to electric vehicles (EVs). Lithium lies at the heart of most alternative energy programs.
Although large quantities of lithium ore are still available the supplies are finite. In response to this concern, the United States the Department of Energy (DOE) published a report entitled National Blueprint for Lithium Batteries. The date of the report — mid-2021 — indicates that it was written in response to the supply chain crises that became critical in that year. The report provides five goals with regard to critical raw materials. The first of these goals reads,
Secure access to raw and refined materials and discover alternatives for critical minerals for commercial and defense applications.
Table 1 of the report lists four of the critical minerals: lithium, nickel, cobalt and manganese. With regard to lithium, the report states that the U.S. has 750,000 (metric) tons of reserves; world reserves are 21,000,000 tons. In other words, the United States has just 3.5% of the world’s lithium reserves, even though it uses a considerably higher percentage than that. The same Table shows that the manufacturing capacity of the lithium resources in the U.S. is 7,470 GWh.