Lithium is a light metal element usually classified as an alkali metal, in the same family with sodium and potassium. Like the other alkali metals, lithium metal does not occur in nature. It reacts vigorously with water, often explosively, producing hydrogen, and the strong alkali, lithium hydroxide.
Properties & Uses
A fundamental law of chemistry is that materials react at fixed ratios by weight. Lithium is the lightest metal, atomic number 3, and the third lightest element after hydrogen and helium, two gaseous elements usually used in balloons.
The very low atomic weight gives lithium the highest reactivity by weight. Hence, it is preferred in energy storage applications like batteries. Indeed, lithium batteries especially for electric vehicles is the applicaton most often cited as interesting to investors.
Lithium has been known for a long time. It is often used in the manufacture pharmaceuticals. Derivatives like butyl lithium are strong bases used in alkylation--to build carbon chains. Lithium aluminum hydride is a strong reducing agent. Lithium carbonate is an orphan drug used to treat bi-polar disorder. Lithium aluminum hydride has also been suggested as an agent to store hydrogen in a reactive form.
Lithium metal dissolving in liquid ammonia is a reducing agent known as Birch Reduction. It is used to convert cold pills (pseudoephedrine) to methamphetamine. "Meth cookers" are said to use lithium batteries as a source of lithium and stolen, fertilizer grade, anhydrous ammonia.[]
Lithium is not a rare earth element.
Three companies, SQM, Rockwood's Chemetall and FMC, produce 60 percent of world's lithium carbonate. The only pure-play is Australia's Talison Lithium (24% share). Numerous penny stocks also claim to produce lithium. On Yahoo Finance the word "lithium" in the ticker look-up box turned up 72 listings.
In May, 2011, Albemarle announced plans to recover lithium from the brines they process for bromine in Arkansas. An article in C&EN indicated that Chemetall, FMC, and SQM already recover lithium from brines, but the lithium concentration found in South American brines (Chile, Argentina) is higher than those in Arkansas (1400-1500 ppm vs 100-300 ppm). Albemarle is believed to be developing a resin based concentration system which they have pilot planted. In 2014, Albemarle announced plans to acquire Rockwood. In 2015, Albemarle was reported to be commissioning a $200MM lithium carbonate plant in Chile--presumably an expansion of the Lithium Corporation operation acquired from Rockwood.
There is at least one lithium ETF: Global X Lithium etf (ticker: LIT). The fund tracks the Solactive Global Lithium Index. Major holdings include Chilean miner Sociedad Quimica y Minera (SQM)(20.16 percent), "FMC Corp (FMC) (16.67 percent), an agricultural and industrial chemical company; and Rockwood Holdings (ROC) (7.93 percent), a producer of lithium compounds." Battery producers like A123 are minor components.
As noted above lithium batteries are of interest due to their high energy per unit weight potential. They are well known in rechargeable power tools, etc., and increasingly in laptop computers, but battery fires have been a concern. Electric automobiles are a major growth segment. Safety issues with batteries for the Chevrolet Volt have been in the news.
Like lead, when used in batteries, lithium is not consumed. Once markets mature, most lithium will be recycled. Continuing demand will replace only lithium unrecoverable or lost in handling. But for electric autos, that day may be far in the future.
An article in the Oct 17, 2012, issue of the Wall Street Journals lists recipients of grants for advanced batteries from the US Department of Energy as follows--
Johnson Controls $299.2MM Plants in Holland, MI and Lebanon, OR
A123 249.1MM Romulus and Brownstown, MI for Fisker Automotive
Dow-Kokam 161 MM Midland, MI
LG Chem 151.4 MM Holland, MI for Chevy Volt
Enerdel 118.5 MM Indianapolis, IN for Volvo
There are known to be lithium battery manufacturers in Asia, but details remain to be learned.
In 2012, A123, a manufacturer of lithium batteries filed for bankruptcy. Their auto parts business was to be sold to Johnson Controls. Wanxiang Group Corp. of China was an investor and potential buyer of A123, but the deal failed possibly due to US DOE requirements. In December, Wanxiang outbid Johnson Controls, NEC, and Siemens (WSJ, Dec 10). A123's "government business" was sold to Navitas Systems of Chicago, a spin-off from Sun Microsystems.
C&EN issue of July 14, 2014 has an excellent 5-page article on advanced battery development. The basic limitation is energy density in wh/kg. Lead acid is rated at 30-40; nickel metal hydride (NiMH) 45-60; lithium ferrous phosphate (LFP) 100-110; lithium cobalt 150-190; Tesla Panasonic lithium-nickel-cobalt-aluminum 240; sodium ion 140-150; lithium sulfur 200; lithium air (in development).
Batteries used in autos–
The battery used in the Tesla Model S has the energy content of 7L (less than 2 gal) of fuel.
Consultants expect a shake out in the battery business. Ultimately they expect five major players and perhaps 50 niche players.
Already LFP developers like A123 have gone bankrupt. Clariant has an LFP plant in Quebec, but is expected to exit due to losses. LFP is used in buses. In 2014, Clariant's LFP business was sold to Johnson Matthey. Matthey also acquired the LFP business of A123. Envia had a contract to supply a lithium rich cathode battery licensed from Argonne National Labs to GM for the Volt, but failed to meet performance milestones. Their research continues.
BASF is a major investor in battery development. BASF plans to invest several hundred million in battery research between 2011 and 2016, and hopes to generate $500MM sales by 2020. Products include electrolytes and metal oxides and phosphates for cathodes. They supply for LFP and NMC and are working on lithium sulfur. In 2014, BASF formed a JV with Toda Kogyo of Japan to make lithium manganese oxide and related materials in Japan. BASF also opened a battery R&D center in Japan.
Sion Power is developing a lithium sulfur battery. BASF has a stake in the company. Lithium sulfur has safety issues yet to be resolved but is thought suited to use in aircraft. Oxis Energy is another lithium sulfur player. Theoretical density is 2735 wh/kg. Oxis is in partnership with Lotus Engineering, Imperial College, and Cranfield University. It is partly owned by Sasol.
Faradon is developing a sodium ion battery that it thinks will be a drop in replacement for lithium ion batteries. Sodium is abundant and less costly than lithium but the atomic wt of 23 vs 7 for lithium suggests abt 1/3 the power potential. They claim an energy density of 140 wh/kg in recent tests. They think 200 wh/kg is possible. Sumitomo is Japan is also working on a sodium ion battery.
Tesla has announced plans to construct a gigafactory to supply lithium batteries for its electric cars. Elon Musk hopes that mass production will reduce costs for his lower priced models. Panasonic is one partner in the venture. The plant will be located near Reno, NV.
In 2015, Tesla agreed to buy lithium from Sonora Lithium Project Partners (Rare Earth Minerals and Bacanora Minerals Ltd.) assuming production milestones are met. Bacanora Minerals Ltd(CVE:BCN)is a Canadian company headquartered in Calgary. 
Related Fool Articles
Related Fool Discussion Boards
Post your questions on Motley Fool's "Renewable Energy" board.[]
Recent Mentions on Fool.com
- 5 Technologies That Could Drive Solar Energy Growth for Decades
- 3 Top Stocks for High-Risk Investors: Tesla, Infinera, and Netflix
- Is Tesla Motors, Inc. Stock Headed to $365?
- How UPS Aims to Save the Planet
- 3 Major Challenges Facing Electric Vehicles That Few Investors Are Thinking About
- 5 Things You Shouldn't Buy at Wal-Mart