The US Geological Survey (USGS) has published a report that could have a significant impact on the geopolitical dynamics between the US and China. It turns out that the Appalachian Mountains contain 2.3 million tonnes of lithium oxide. To better understand the significance of this information, suffice it to say that such a quantity would meet the US’s demand for this rare metal for around 328 years. To date, the country has operated only one small mine, and more than 50% of its lithium is imported from Chile, Argentina and Australia, whilst the raw material itself is still sent to China for processing. Indeed, China processes 60% of all lithium, which serves as a means of exerting pressure on other countries, including the US. In recent years, Beijing has repeatedly introduced export controls on, among other things, lithium processing technology, the manufacture of LFP cathodes (which contain directly recycled lithium) and high-energy lithium-ion batteries. As a result, Beijing has a real influence on the cost, availability and delivery times of battery components worldwide.
The discovery by the US authorities now appears to mark a breakthrough, but the devil is in the detail. The first problem is the nature of the deposits found. These are so-called pegmatites, i.e. hard rocks, from which the extraction and processing of lithium is much more expensive and difficult than from brine. What matters, however, is that mining would be economically viable. The greatest hopes lie in the Kings Mountain region, where companies such as Albemarle and Piedmont Lithium are already developing their projects. The biggest problem, however, remains time. The construction of mines and the commissioning of lithium extraction and recycling plants is a process that will take at least 10 to 15 years. Consequently, the significance of this discovery remains moderate in the short term.
So where exactly do the real benefits for the US lie? First and foremost, we need to adopt a longer-term approach here in the context of competition with China. This competition will not end in two or three years. A new world order will emerge over the coming decades, and from that timeframe, the discovery of such vast lithium deposits is already significant. This is a milestone that completely transforms the US’s vision of raw material security in relation to lithium and offers real hope of weakening Chinese influence, even in the area of control over battery production. It is also a positive signal for American companies in this sector.
