A lithium mining machine moves salt byproduct at the mine in the Atacama Desert in Salar de Atacama, Chile on October 25, 2022.
Lucas Aguayo Araos| Anadolu Group | Getty Images
Iran says it has discovered a large deposit of lithium – a key element in batteries for electric appliances and vehicles – in one of its western provinces.
“For the first time in Iran, a lithium reserve has been discovered in Hamedan,” a mountainous region in the west of the country, Mohammad Hadi Ahmadi, an official at Iran’s Ministry of Industry, Mines and Trade, said on Iranian state television. Saturday.
The ministry believes the deposit holds 8.5 million tonnes of lithium, often called “white gold” for the fast-growing electric vehicle industry. If the claimed figure is correct, that would make the deposit the second largest lithium reserve in the world after Chile, which has 9.2 million metric tons of the metal, according to the US Geological Survey.
The beneficial element is a vital component in the cathodes of lithium-ion batteries in EVs, as well as in rechargeable batteries such as those used in cell phones. The price of the metal has risen in the past year due to higher demand for electric vehicle parts, global supply chain problems and inflation, but has fallen recently, with a correction amid a drop in EV sales and activity Slow business in China, the fastest growing. EV market.
Iran’s lithium investment news, if true, would be a lifeline for the country’s struggling economy.
Under the pressure of several years of heavy international sanctions and with a spiraling currency, which hit its lowest point against the dollar at the end of February, Iran would benefit greatly from the possibility of such valuable resources. -trade – although its trading partners would likely be limited due to. to these sanctions.
Isolated from the global financial system, Iran continues to attract sanctions from Western countries that accuse Tehran of supplying Russia with weapons used in its war in Ukraine. . The Iranian government has also spent nearly six months violently cracking down on women’s rights and anti-government activists.
As for the global lithium market, such an addition to the world’s known reserves could push the prices of the metal down further, depending on Iran’s ability to export.
Iran is also one of the world’s leading producers of oil and gas, but its inability to export widely due to sanctions has limited its ability to bring in income and foreign currency. as well as its ability to contribute to global supply.
Analysts at Goldman Sachs see lithium falling further in price.
“Over the next 9-12 months, we are increasingly bullish on the base metal, expecting a move lower in lithium prices along with cobalt and nickel,” wrote a report from the commodity research desk. bank from the end of February.
In the next two years, Goldman expects lithium supplies to grow by an average of 34% year-on-year, led by Australia and China, which have some of the world’s largest supplies of the metal.
“Therefore, while a recovery in EV sales to 23Q2-Q3 may temporarily lift sentiment and support falling battery metal prices, the increased supply and overcapacity are expected to downstream lithium prices down later in the medium term,” the bank wrote.
