Putin is preparing a new resource trap for the West — mass media

Author

Valery Moiseev

Russia can make an agreement with Bolivia on cooperation for lithium mining. This South American country has the world’s largest deposits of the metal, which is now widely used in many areas: electronics, metallurgy, medicine, nuclear energy, and others.

Putin is thus preparing a "new resource trap" for the West. This was written in an article by the German newspaper Die Welt.

Bolivia has the world’s largest identified lithium reserves. Its authorities are now looking for partners to mine the metal deposits estimated at 21 million tons.

Russia is the frontrunner in the tender, Die Welt says. If it’s awarded the right to mine the Bolivian lithium, the West will be trapped into "one more dependence on Moscow".

Official Russian and Bolivian authorities don’t comment on the possible deal.

Russia doesn’t have its own lithium mining

According to open sources, Russia completely lost its lithium mining after the breakup of the USSR. However, in 2017, they launched an experimental apparatus to extract lithium from poor ores at a low cost.

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This April, a Russian Ministry of Industry and Trade official said there was a possible deficit of raw lithium in Russia. "Russia doesn’t produce raw lithium, it comes from Chile, Argentina, China, and Bolivia. At the time, shipments from Chile and Argentina have been suspended, and the raw material can only be sourced from Bolivia," he said.

"We have processing capacities, but if we have no raw material, we can have a very serious problem with satisfying our demand for lithium-ion batteries," the official added.

According to the Ministry of Industry and Trade, Russia has 260 thousand tons of lithium reserves and 1 million tons of forecasted reserves. They are all concentrated in ore deposits but aren’t mined.

What lithium is

Lithium takes its place in the third cell (after hydrogen and helium) on the periodic table of elements. It’s a very lightweight alkali metal, silvery-white, soft, and malleable, even softer than lead.

The primary center of its production is the so-called lithium triangle, which is located in Argentina, Bolivia, and Chile. It has 70% of the world's total identified lithium reserves, of which two-thirds are in Bolivia. Australia and China are also major producers of lithium.

Lithium production in Bolivia

Lithium is used in metallurgy, nuclear reactors, medicine, electronics, oxygen regeneration, food canning, and cosmetics production. In pyrotechnics, it is used to create red flames.

Lithium has become especially important since the beginning of mass production of lithium-ion batteries, which are now used not only in virtually all smartphones and laptops but also in electric cars.

There are only three ways of lithium production: extraction from spodumene or lepidolite concentrates, salt lakes, or groundwater.

The global lithium market

The demand for lithium skyrocketed in 2016–2017 when the use of electric cars began to grow quickly in China. It resulted in an increase in lithium prices and in the supply of lithium-based materials.

As a result, the prices of lithium fell in 2018–2020, which adversely impacted businesses that produced raw lithium: their profitability decreased significantly, and part of their capacities was shut down. The coronavirus pandemic that started in 2020 also affected the industry.

In the second half of 2020, the situation began to improve drastically: the demand for electric cars boomed, spilling over to 2021.

This resulted in a new increase in lithium prices, a trend that is still lasting in 2022 and stimulating the launch of new lithium extraction projects.

According to the estimation by Benchmark Mineral Intelligence, the global demand for lithium in 2022 will reach 600 thousand tons, and by 2030 it will be 2.4 million tons. Capital investments in the extraction and processing of lithium ores and salts in the above-mentioned period could reach $42 billion.