1. Lithium, a new source of energy
Rio de Janeiro, April 2015
Fidel Oteíza 1921, office 1001 – Providencia, Santiago, Chile

2. Introduction Questions that we are going to try to answer
Is there enough lithium in the world to meet demand?
Are countries prepared for the electrification of transportation?
Will batteries for energy storage systems become the largest application for lithium?
Can lithium replace oil?
Will Chile, Argentina and Bolivia become the new middle east?

3. 1. Introduction
Oil prices and global warming: drivers for safer and greener technologies
Oil prices
Oil prices not only respond to supply-demand conditions but also to geopolitical conditions
Oil prices are currently at low levels, but production is concentrated in middle-east  high levels of unrest and demand for regime changes.
The US is becoming a relevant player as an oil producer (shale oil), but at higher costs.
Global warming
According to the IEA the transport sector is responsible for almost 23% of CO2 emissions and CO2 emissions from transport are dominated by road
China, US and Russia are the largest countries in terms of CO2 emissions

4. Introduction Why Lithium? Lithium has a high electrochemical potential
Lithium has a low atomic mass (6.941 g/mol)
Lithium has a low density (around 0.53 g/cm3 at 20ºC)
Lithium-ion technology has been developing since the seventies; however, in 1991 Sony was the first company to start massive production of lithium-ion batteries.
Once the advantages over other technologies were recognized, applications began to expand.
Sony introduced the first lithium ion cell early the ninetees

5. 2. Lithium resources and supply
Lithium is found in different forms
Continental Brines
Geothermal Brines
Lithium is found in continental brines as well in hard rock minerals.
Chile and Bolivia have about 2/3 of worldwide reserves in the form of continental brines.
Lithium minerals are found mainly in the form of spodumene in Australia and China.
Seawater is the largest source of lithium resource.
See
Hard rock minerals

6. 2. Lithium resources and supply
Lithium reserves are concentrated in Chile, Argentina, Australia and China

7. 2. Lithium resources and supply
Salar de Atacama in Chile has the best quality reserves of lithium
Source: Peter Ehren.

8. 2. Lithium resources and supply
Salar de Atacama in Chile has the best environmental conditions
Source: Peter Ehren.

9. 2. Lithium resources and supply
Production process: Continental brines (Chile)
Remotion of additional water and crystalization of salts
Pumping
Brines contained in dry lakes
Solar evaporation ponds
Lithium Chloride Solution
6% Li
1% Li
Chemical plant
Remotion of magnesium and precipitation with soda ash (Na2CO3)
Lithium Hydroxide (LiOH)
Lithium Carbonate (Li2CO3)
Precipitation with calcium oxide, cal (CaO) or with soda caustic (NaOH)

10. 2. Lithium resources and supply
Production process: Hard rock minerals
Open pit mining
Mica removal and separation
Pegmatites
Crusher
Spodumene recovery
6% Li2O
1,1% Li2O
Chemical plant
* Pegmatites:
Spodumene: LiAl(SiO3)2
Petalite: LiAlSi4O10
Lepidolite: (KLi2Al(Al,Si)3O10(F,OH)2
Lithium carbonate (Li2CO3)
Lithium Hydroxide (LiOH) 10
Li2O: Lithium oxide

11. 2. Lithium resources and supply
Lithium is not a commodity
Li-Acetylide
Methyl-
lithium
Phenyl-
LDA
LHS
Li-t-
Butoxide
Li-
Methoxide
Hydride
Li-tri
(t-butoxy)-
alanate
Amide
Salicylate
Citrate
Benzoate
Acetate
Zeolite
Potash
Bischofite
Sulphate
Nitrate
Phosphate
Silicate
Li-Tetra-
borate
Chromate
Sabalith
Nitride
Bromide
Fluoride
Peroxide
Hydroxide
CO2-
Absorption
Products
Iodide
Perchlorate
LiBOB
Anodes
Foils
Lithium
Carbonate
Chloride
Brines
Butyl-
Alanate
Metal
Source: Rockwood Lithium.

12. Total Lithium Production
2. Lithium resources and supply
Lithium carbonate is the most important chemical compound
Tones LCE
Total Lithium Production
160,000
Li2CO3
73,600
LiOH
30,300
Li Concentrate
28,300
Li Metal
5,400
BuLi
8,000
LiCl
8,800
Other
6,200
Brines
90,000
Minerals
70,000
Note: numbers are rounded.
Source: signumBOX estimates.

13. 2. Lithium resources and supply
Australia is the largest lithium producer
Tones LCE
Lithium production is concentrated in Australia, Chile and China
Production in Chile has many advantages, make it the lowest cost producer:
High lithium/potassium concentration
Low evaporation rate (driest dessert in the world)
Low magnesium/lithium ratio (magnesium must be removed)
10 years ago there were more than 100 of lithium exploration projects in the world.
Currently there are about 40 projects, and 5 of them are about to start producing in the coming (Argentina and Canada).
Source: signumBOX estimates.

14. 3. Lithium demand Batteries are the main application for lithium
Total lithium demand reached in about 150,000 – 160,000 tones as LCE.
Batteries are the main application for lithium (40% app of total demand):
67% of the consumption of lithium carbonate and 30% of the use of lithium hydroxide.
Lithium is also widely used in lubricating greases in the form of lithium hydroxide.
Other interesting applications: lithium alloys, medicine, metal treatment, among others.
Source: signumBOX estimates.

15. 3. Lithium demand Batteries are the main application for lithium
Source: signumBOX estimates.

16. 3. Lithium demand
Batteries for portable devices represent the largest use for lithium in batteries
Lithium carbonate / hydroxide is used as a cathode material in rechargeable batteries
Lithium metal also used in primary batteries
Lithium chloride is used in the the electrolyte in rechargeable batteries
62,000 tones LCE
40,400 tones LCE
Source: signumBOX estimates.

17. 3. Lithium demand Batteries for hybrid / electric cars
Recent market trends:
The announcement made by Tesla regarding the construction of the giga-factory in Nevada was very welcomed by the industry.
Capacity for batteries for 500,000 vehicles in 2020 (currently capacity for 35,000 vehicles)
The State of Nevada offered US$ 1.3 billion of tax credits
The cost of the gigafactory is estimated at US$ 5 billion, but some analysists estimate that would reach around US$ 6 billion.
Tesla autonomy reaches 250 miles (industry average: 75 – 110 miles)
The battery uses standard cells (18650). Advantage in costs.
The Chinese government intents to distribute 5 million electric cars (Evs and P-HEVs) by 2020 to solve the Nation´s environmental problems.
Global EV market demand is expected to grow from 2.4 million units in 2014 to 8 million in
We assume a conservative scenario, with Tesla supplying 250,000 EVs by 2020 (instead of 500,000).
Source: signumBOX estimates.

18. 3. Lithium demand Lithium consumption in batteries Lenovo battery
Iphone battery
2.5 grs LCE
Lenovo battery
30 – 50 grs LCE
Toyota Prius Plug-in Hybrid: 4.4. Kg LCE
Grid storage project
…tones of LCE
Tesla Roadster: 40 Kg LCE
Source: signumBOX estimates.

19. 3. Lithium demand Battteries for HEV and EVs 1.000 US$/KWh 500 US$/KWh
Source: signumBOX estimates from various sources.

20. 3. Lithium demand Battery materials Materials for Metal Oxide Cathodes
Main advantage
Main disadvantage
Applications
Lithium content
Lithium material
Lithium Cobalt Oxide (LCO)
Balanced yield
Low cycle life
Electronic devices 7%
Lithium carbonate
Nickel manganese cobalt oxide (NMC)
Safety
High cycle life / lower capacity
HEV
Lithium carbonate / Lithium hydroxide
Lithium Manganese Oxide (LMO)
Low cost
EV – P-HEV 4%
Nickel Cobalt Aluminum (NCA)
High capacity
Not safety
Lithium hydroxide
Lithium iron phosphates (LFP)
High thermal stability / Safety
HEVs - EVs
Source: signumBOX estimates, JOGMEC.

21. 3. Lithium demand Energy Storage Systems
Challenge: Match supply and demand in real time
According to the US Department of Energy´s Energy Storage Database:
Total energy storage systems: 1,250 projects in the world / 184,574 MW
Pumped hydro: 341 projects in the world / 177,427 MW
Electrochemical (Li-ion batteries): 386 projects / 690 MW
Economics of pumped hydro are very difficult to compete with (for chemical solutions)
Non battery solutions are by far the current leader in cost, but lithium ion batteries cost is falling
Pumped hydro
CAES (Compressed air energy storage)
Flywheels

22. 3. Lithium demand
Total Energy Storage Systems

23. 3. Lithium demand
Batteries for Energy Storage Systems

24. 3. Lithium demand
Battery for Energy Storage Systems

25. 3. Lithium demand Forecasting lithium demand
Batteries for hybrid and electric vehicles are going to be the largest application for lithium demand.
Today represents about 6,0% of total lithium demand
In 2025 would account more than 35% of the total lithium demand.
Total lithium demand would reach 390,000 tones in 2025 (including inventories).
CAGR: +8.6%
Source: signumBOX estimates.

26. 4. Final Conclusions Questions that we are going to try to answer
Is there enough lithium in the world to meet demand? Yes…
Are countries prepared for the electrification of transportation? LatinAmerican countries not yet..
Will batteries for energy storage systems become the largest application for lithium? No, batteries for hybrid and electric cars are going to be the largest application for lithium
Can lithium replace oil? No, automakers are going to diversify technologies
Will Chile, Argentina and Bolivia become the new middle east? No…

27. Many thanks for your attention.
Please ask for the updated version of this presentation at
Fidel Oteíza 1921, office 1001 – Providencia, Santiago, Chile