Lithium: Price Collapse Secures Green Transition, Causes Headaches

Lithium is earning its current moniker, “white gold,” and all the geopolitical contention that comes with it. When Argentina’s new libertarian president, Javier Milei, announced sweeping reforms, a prominent one was making it easier to export lithium. The U.S. subsequently announced financial support to make that happen. When Namibia conflicted with a Chinese mining company, it was over the export of lithium. After the fall of Kabul to the Taliban, one of the few economic opportunities that emerged was for the export of lithium from the Taliban-ruled Emirate. Worldwide, the scramble for lithium is already happening.

Lithium is vital because of its indispensability in modern green technologies, especially advanced batteries. This scramble for white gold has had enormous benefits. Countries in the developing world have been able to tap into vital new revenue streams even as the price of lithium was pushed downwards. The result should have been a virtuous cycle of cheap and stable commodities for the producers of green technologies, especially electric vehicles (EVs), able to count on cheaper inputs and thus sell at lower prices to supplant the internal combustion engine (ICE).

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