Lithium: a short history
The mineral petalite (which contains lithium) was discovered by the Brazilian scientist José Bonifácio de Andrada e Silva towards the end of the 18th century while visiting Sweden. Lithium was discovered by Johan August Arfvedson in 1817 during an analysis of petalite ore. Arfvedson subsequently discovered lithium in the minerals spodumene and lepidolite. C.G. Gmelin observed in 1818 that lithium salts color flames bright red. Neither Gmelin nor Arfvedson were able to isolate the element itself from lithium salts. In fact, the first isolation of elemental lithium was achieved later by W.T. Brande and Sir Humphrey Davy by the electrolysis of lithium oxide. In 1855, Bunsen and Mattiessen isolated larger quantities of the metal by electrolysis of lithium chloride.
In 1923, the first commercial production of lithium metal was achieved by Metallgesellschaft AG in Germany using the electrolysis of a molten mixture of lithium chloride and potassium chloride. (Quoted from "WebElements: the periodic table on the web.")
Three Major Markets for Lithium
The primary markets for lithium carbonate are consumer electronics (laptops, iPads, iPods, tablets, cellphones), grid-storage solutions and electric and hybrid vehicles.
The first major market for lithium-ion batteries emerged with the proliferation of cell phones, laptops, iPads, iPods and a host of other products that gadget-savvy consumers seemingly can't do without. The hype in the consumer electronics market generally focuses on any new product by one of the big players, such as Apple or a new entry from Samsung, usually, but not exclusively aimed at a younger demographic. And there's no denying that Apple's latest tablet offering or when Samsung pitches its latest Galaxy Note II's 5.5-inch HD Super AMOLED Plus product, the hype is startling and effective -- consumers open their wallets. Beyond the glamour of this piece of the ever-expanding lithium carbonate market, it has a profound impact on lithium consumption
But there is a subset of this consumer segment that receives far less "buzz": cordless tools (whether it's dad 'puttzing' about the house with his lithium-powered drill or a carpenter on the job wielding a naildriver), Cordless tools have been around a long time and acceptance, especially now that lithium has conquered the nickel metal hydride imposter, continues to grow. And product offerings continually expand, to include electric lawnmowers, hedge trimmers, weed "hackers." In fact, almost any conventionally-powered device in the home and garden (or how about a lithium-powered motorboat at the cottage?) is in danger of obsolesence now that lithium has taken the stage.
Another major emerging market for lithium is grid-storage. Primarily at this stage of development is the type that AES Systems recently installed in West Virginia. It's a 32-MW storage unit near Belington, W.V. that serves as an electrical storage facility for a neighboring 98-MW wind farm. Power generated by the wind turbines can be stored in huge lithium-ion batteries and fed to the grid during periods when the turbines are idled due to lack of wind. In fact, that situation occurred in Texas in 2008. The southern state, which has invested considerable sums to develop its wind capacity, experienced a sudden, dramatic plunge in wind and caused the state to suffer a 1400MW drop in power in a mere 10 minutes. But fast action by the utilities' industrial customers, who slashed their own usage quickly, saved the day.
This same type of grid stabilization or energy "smoothing" is required for large solar power installations and even hydro-electric plants that could store excess output and sell it into the grid as demand, and therefore, prices rise.
Again, Texas provides a recent example of how grid storage in times of surplus energy can play a key role. Texas recently experienced 533 instances where the grid price for electricity was negative for short periods of time. Adding storage to the mix could have generated what otherwise would have been lost revenue,
The implications for lithium carbonate demand from grid storage are considerable. For example, a cellphone might require five grams of lithium carbonate and a laptop about 10 grams. A 40-kWh EV, on the other hand, might require up to 24 kg. But for 1 MW of grid-storage capacity, about 600 kg. of lithium carbonate would be needed. AES has an installed lithium-ion battery capacity of approximately 72 MW and more than 500 MW in the project pipeline. Energy market researchers are anticipating this market segment should grow significantly over the coming years.
The growth in grid-storage is not limited to multi-megawatt facilities. At the PDAC convention this past March, Canada Lithium Corp. hosted its "Lithium Forum 2013" where several speakers from various lithium battery market segments presented to a sell-out crowd. Among the speakers was Larry Dickerman of DNV KEMA, Inc. KEMA is a consultancy group in the Community Energy Storage (CES) field, Whereas grid-scale storage facilities begin at about five to 10 megawatts and can go to +50 MW, CES units might "max out" at about 250 kW. But in the coming years there could be hundreds of these units in any given town or perhaps thousands in any given city, if the concept and eventual implementation of the smart electrical grid continues to gain momentum.
In a nutshell, the "smart" grid is a two-way power flow, whereas our current electrical supply is a one-way street from the generating station (coal, oil, natural gas, hydro) through transmission lines to its final destination in homes, offices, schools, etc. across North America. The smart grid envisions a two-way flow initiated again from the generating station. But users with community-scale storage units and generators can also feed electricity back to the grid. At the local level it provides back-up power in the event of power disruptions from the grid. More broadly, it provides grids with load-levelling capabilities, power factor correction and ancillary services.
The Internal Combustion Engine vs. electromobility
There is a major transformation slowly picking up the pace in the global automotive industry. This transformation away from the internal combustion engine began with the first hybrid sold in the 1990s and took a new turn in 2011 when Nissan began marketing its all-electric Leaf and GM introduced the Chevy Volt, primarily an electric vehicle outfitted with a small gasoline engine to drive a generator capable of extending the range of its Li-ion battery.
In 2012 and 2013 every major car company will be introducing its own versions of electric cars, hybrids, plug-in hybrids and other variations on the electromobility theme. Ford Motor Company's 2012/2013 lineup of new models includes a Focus Electric, Fusion Hybrid, Escape Hybrid, C-Max Hybrid and C-Max Energi. While the uptake for pure electric vehicles has been slower than anticipated, hybrids and plug-in hybrids seem to be gaining in popularity. Toyota is currently in its third iteration of the popular Prius Hybrid and now has four versions on offer.
As demand for these vehicles grows, lithium carbonate consumption is anticipated to increase. The largest impediments currently to broader acceptance of 'pure' electric vehicles are twofold: Sticker price and something called "range anxiety." Most industry analysts anticipate that, with larger production runs, technological advances in lithium-ion battery technology and an expanding network of recharge stations on North American, European and Asian roads, the hurdles to broader acceptance will eventually disappear.
Another key factor in widespread acceptance of this new breed of automobile is the price of gasoline at the pumps. Early in 2012, for example, gasoline prices were again rising across North America and in Europe, although later in the year pump prices were again decreasing. EVs, HEVs, PHEVs all begin to look far more attractive to a cost-conscious, car-buying public as prices at the pump rise. Conversely, in a lower gas-price environment converting to the "green" option will be less compelling.
Nevertheless, the car-driving public and commercial fleet operators now have an option that didn't exist at all about a decade ago. And, no doubt, EVs and their hydrid cousins will continue to crowd a market once the sole domain of the internal combustion engine.
... and now, a little bit of battery history
The Rocky Road to Lithium Ion Battery Commercialization
by Debra Fiakas CFA
Lithium ion batteries are a relatively recent innovation. Scientists and engineers first began working with lithium applications in the 1970s. A number of companies and laboratories worked through the next decade to perfect lithium ion batteries, using various materials for the business ends of a battery - the anode and the cathode. It was not until the mid 1980s that developers settled on cobalt as an electrode material, which ultimately enabled industrial-scale production of lithium ion rechargeable batteries. In 1996, Sony introduced the first commercial battery to the market. Fifteen years later lithium ion batteries accounted for 66% of all portable battery sales worldwide.
Cobalt is not the last word on lithium ion batteries. Known as LiCoO2 or LCO for short, lithium cobalt oxide is now only one of several solutions for battery cathodes. Cobalt offers high capacity for its cost. Manganese (LiMN2O4 or LMO) is used on its own or in combination with nickel and cobalt (LiNiMnCoO2 or NMC). These materials afford the safest battery application as well as long life, but have lower capacity than cobalt alone.
Some battery producers have tried combining cobalt with nickel and aluminum (LiNiCoAlO2 or NCA). High specific energy and power densities and long life span have the attention of electric vehicle producers for powertrain applications. However, high cost and safety issues still need to be addressed.
A few developers have taken an entirely different approach, using lithium titanate (Li4Ti5O12 or LTO) to replace the graphite in the battery anode. LTOs offer excellent low-temperature discharge, high capacity and lengthy lifespan.
The perfect paring...
Cobalt wins the capacity contest, but when it comes to thermal stability and power or load characteristics lithium iron phosphate chemistry (LiFePO4 or LFP) is heads above cobalt. For powertrain and electric grid applications, safety and cycle life are more important than capacity. Thus electric car manufacturers cozied up to LFP developers and the race to build the perfect automotive battery began.
Debra Fiaska is Managing Director of Crystal Equity Research