Will there be lithium batteries available for iPad 6 in 2015?

Dueling views of the lithium market

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If Apple announces the iPad 2 as expected it tomorrow, it will likely run, like the first model, on a lithium-polymer battery. As do all those new Android tablets and smart phones, and the new electric vehicles that will save us, finally, from our "dependency on foreign oil." So where will the lithium come from and will there be enough?

Lithium is the lightest metal, and much of the current supply is in a few brine or clay deposits, mainly in Bolivia and Chile, with the next smaller sources in western Australia and some deposits in China. Some is found in igneous rock. A Reuters news analysis noted nearly two years ago in May 2009 "There are enormous possibilities for profit." The reason? The projected boom in demand for lithium.

Lithium salts are used in mood-stabilizing drugs; and in a range of industrial applications: heat-resistant glass and ceramics, high strength-to-weight alloys used in aircraft, and in lithium and lithium-ion batteries.

Electric vehicles, or EVs, are widely expected to send demand for lithium soaring. For EVs to have even the remotest chance of actually reducing oil consumption, let alone "eliminating our oil dependency," millions of of them will have to built and sold and run. Every one of them with a battery that uses lithium, lots of it compared to your cell phone.

One view of this is on display at The Fiscal Times, where Tom Zoellner draws on data compiled by a mining company, Western Lithium, which is developing a deposit in northwest Nevada. Zoellner: "Lithium is difficult to find and excavate. Tiny amounts are found in compounds everywhere, including in the bodies of mammals, but in extremely small quantities. The best way to mine it is to dig under the beds of dried lakes with high saline contents, where volcanoes in wet climates leached groundwater into a landlocked basin tens of thousands of years ago — not exactly in your backyard. Very few places on the globe match these exacting conditions, and some of them are politically problematic."

Western Lithium sources some data to show a steeply rising demand for lithium, the graph of which is reproduced by The Fiscal Times (you can find the full WL presentation on the company's Website.) Somewhat coyly, the mining company doesn't project the impact of demand on price, which the graph shows has actually dropped since early 2009, due to the global financial crisis.

The headline at The Fiscal Times headline is pure alarmism: "Back to Land Lines? Cell Phones May Be Dead by 2015."

But according to a Tucson, Arizona-based TRU Group, which has a consulting practice in lithium exploration and process engineering, the financial crisis has hammered the market, depressing prices, even as production and reserves will more than meet the projected demand. In a presentation at the January 2011 3rd Lithium Supply & Markets Conference in Toronto, the company highlighted the "seemingly unstoppable supply growth" that "will cause such huge overcapacity that the stability of the industry will be threatened."

TRU sees no shortage in lithium supplies to at least 2020. "Pipeline projects and expansions could increase capacity by about 40,000 tpy Li-contained in the next decade – double what the industry needs," according the company. "Existing lithium chemical producers have the in-ground resources and ability to meet nearly all market requirements by expanding capacity." Prices for lithium carbonate fell steeply in 2010 and will remain depressed.  "Long term there is no market-driven upward-price pressure so prices will remain stable and likely below $5000" per ton. Startup and new project producers, lured by the rosy demand forecasts will find it impossible to compete against the distinctive natural cost advantage of brine-based producers" specifically Chemetall-SCL, FMC and SQM.

These producer prices will eventually have an impact on the final price of lithium-based batteries, whether in smartphone or electric cars. But if TRU's analysis is right, Apple may be able to keep the new iPad's price a bit leaner.

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