Mining for lithium minerals, also known as lithium metal, has been on the minds of investors, entrepreneurs, and Wall Street executives since the price of the precious metal has reached all-time highs. What makes this such an important issue? Well, the world is faced with limited supplies of lithium minerals. Demand for lithium metal is currently increasing. So, mining for lithium minerals and the associated infrastructure required to extract, process and produce lithium metal keys to keeping the global economy operating smoothly.
The first mining for lithium occurred in the mid-20th century, when explorers discovered lithium deposits in the South Pacific. Since that time, countries like Australia, Canada, Norway, Sweden, and the United States have all discovered and exploited lithium mineral deposits. However, lithium metal is a rather unique mineral. It is metal ions, or lithium carbonate, which are found within the lithium mineral deposits, not within the electrolytes used to create batteries.
How does this affect the economics of mining for lithium minerals? Unfortunately, the supply, demand and infrastructure for lithium are more concerns than the economics of extracting and refining lithium. Currently, there is a surplus worldwide, which means that the demand for lithium minerals is always going to be greater than the supply. In the United States, the Government recently approved a five-year exploration program for lithium minerals. However, even if the program is a success, it will only be a temporary solution to the problem.
What can we do to ensure that the world gets its supply of lithium metal at optimal levels? One solution is to explore for new lithium deposits. As long as we find these deposits, we will never run out of lithium metal. Of course, there is a limit to how far we can explore to find these deposits. Eventually, it will cost money to mine these metals, so governments have to decide how much risk they are willing to take.
Another way to get lithium metal is to look to the developing world for resources. Many countries in South America, such as Bolivia and Venezuela, have large deposits of lithium. If Venezuela becomes a supplier of lithium, it would be a huge advantage for the world economy. Unfortunately, that country has been involved in political problems for the last couple of years. It also has an unstable economy and is suffering shortages of basic goods such as food and medicines. That could dampen the global economy if Venezuela became excessively dependent on lithium for its energy needs.
One way to insure that mining for lithium occurs is to increase the demand for lithium. Demand for any mineral can be brought about by increasing its supply, but it is a more complicated process than simply increasing production to meet increased demand. The price of a particular mineral will rise if production increases, but it will also decrease if demand decreases. Mining for lithium minerals is only a good long-term investment for those who can take the long-term view and plan ahead.