Petersen -Last summer, I questioned whether global lithium supplies would be adequate to satisfy exponential growth in the Li-ion battery sector. I raised the question because of a 2006 report, "The Trouble with Lithium" written by William Tahil of Meridian International Research, which concluded that world lithium reserves were not sufficient to sustain EV manufacturing using Li-ion batteries and suggested that Zinc-Air and NaNiCl batteries might be better choices.
To quote Shakespeare, "Methinks the lady doth protest too much."
I am gravely concerned when Li-ion battery executives use a report that would not pass muster with the SEC as proof that their companies don't face any supply issues, particularly when the report acknowledges that price increases will be required to justify the resumption of mining and processing of alternative resources.
If Mr. Lifton's description of the cost of producing lithium from spodumene is even close to accurate, the happy talk about future "economies of scale" that we hear from Li-ion executives is not entirely honest.
They're talking about unicorns and supporting their position with a report that would not pass muster with the SEC. While I was willing to remain quiet about raw material supply issues in the past, I think I smell smoke. I believe these resource issues need to be studied in depth by independent experts before we follow the yellow brick road over the edge of a cliff.
I'm a believer in the upside potential of companies like Exide (XIDE), Enersys (ENS), C&D Technologies (CHP) and Axion Power International (AXPW.OB) because they use plentiful domestic raw materials to make inexpensive products. In light of the Lifton interview, I think companies like Altair Nanotechnologies (ALTI) and Ener1 (HEV) may face raw material supply risks that investors don't fully understand. I'm not as concerned about China BAK (CBAK), Advanced Battery Technologies (ABAT), Hong Kong Highpower (HPJ) and Valence Technology (VLNC) because China also has significant lithium salt deposits.
However, I think pigs will fly before we see China exporting raw materials to the U.S.