The World’s Great Lithium Illusion – Here’s What You Really Need to Know
There’s an old saying in the news and media – ‘If it bleeds, it leads’
What this means is that the more violent or sensational a story is, it’s always prioritized and framed accordingly so.
Why? Because such things drive views.
And no other industry gets this poor framing more so than the mining sector…
Pundits in the media always make headlines stating how awful and ugly the mining sector is.
Whether it’s “polluting the environment” or “child-labor infractions” or a “form of imperialism”.
We’ve heard it all.And while there are instances of such issues, these headlines end up leading the masses to believe that all mining is evil and should be avoided.
But this is all an illusion – formulated to drive views.It reminds me of what one of our favorite classical economists – Fredric Bastiat – once said.
The difference between a good economist and a bad economist is that:
The bad considers only the visible effects.
While the good considers both the visible effects, and also those which are necessary to foresee
So while the pundits only focus on the bad aspects of mining – good investors will see through the noise and focus on the benefits and upside of it all.
And this is why you’ll see through the ‘Great Lithium Mining Illusion’.
Many Believe Lithium Mining is “Dirty” – But That’s Outdated Thinking
The long-held view has been that lithium mining is “dirty” and detrimental to the environment.
And while it’s not exactly great for the soil (neither is farming for that matter) – it’s not nearly as bad as many make it out to be.
To give you a comparison – it’s far less destructive to the environment than oil fracking is.
But recently – we’ve seen even greater increases in technology and efficiency that will help the social perception of lithium mining.
In fact – multiple European Union officials (many with aggressive pro-environment stances) now say that it’s “crucial” to show local populations that lithium mining is no longer a “dirty operation”.
And when the European Union is actually promoting a form of mining, you know it’s a big deal.
But it’s not just in Europe. . .
For instance, there are three large mining companies based in California’s ‘Lithium Valley’ that aims to establish a method of extracting lithium that won’t have negative impacts on the environment.
In short – these companies plan to use clean energy (such as geothermal power) to directly extract lithium. Avoiding the destruction, waste, and dirty water created by hard rock mining.
Michael McKibben – a geochemist and professor at the University of California – said, “It’s important not to call it mining. . . because compared with conventional lithium mining, this process has minimal environmental impacts.”
Mckinsey & Co. also recently reported that this promising direct lithium extraction (DLE) approach has several potential benefits compared to current projects – some being:
Increased lithium recoveries from around 40% to over 80%.
Eliminating or greatly reducing the footprint of evaporation ponds
Lower the need for fresh water
Lower production times
These are only a few ways that the lithium miners are at work increasing their efficiency while reducing their environmental impact.
And it’s just in time as the world enters the clean-energy revolution – making lithium more needed more than ever before. . .
Lithium: “Mother Nature’s” Answer for Fueling Clean Energy
Lithium is both the lightest metal in the world and also an alkali metal (aka good conductors of heat and electricity).
It’s used to make lightweight alloy metals – which are used in airplanes, armored vehicles, and railways.
It’s even used to help treat depression.
But – over the last decade – lithium’s use as a fuel source for electric vehicles (EVs) and renewable energy grids exploded.
Why?
Because energy storage and renewables are two of the most important sectors in the global push towards becoming ‘net-zero’ (aka cutting greenhouse emissions and the carbon footprint as close to zero as possible).
In fact, it’s not a stretch to say that lithium as a clean energy source is literally revolutionizing the world.
For instance, one of the challenges with renewables has always been that they can’t produce energy steadily.
The sun isn’t always out, limiting solar energy output
And the wind isn’t always blowing, limiting wind turbine output
The obvious solution’s been to store the excess energy and then release it later when needed.
But how?
Well, that’s why lithium batteries are so important.
They’re able to store energy efficiently and be recharged at will (imagine your cellphone or laptop or electric vehicle).
And as battery costs decrease, they will become more accessible for the masses.
This is already happening – and much faster than many realize. . .
To put this into perspective – with modern innovations and greater productive capacity – we’ve seen the cost of using lithium batteries plunge over 97% between 1991 and 2018 (from $7,500 to $181).
That’s 41x cheaper in less than 30 years.
But what’s most promising is the recent rate of declining costs.
Between 2014 and 2018, the cost of lithium-ion batteries dropped 50% in just four years.
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