Afghanistan Lithium’s impact on cost of Li-ion batteries

Setting aside the question which many have raised about the existence of a pie in the first place, it is an undeniable fact that there is a lack of any mining infrastructure in Afghanistan. What the political motives and implications behind the discovery of lithium and other important minerals in Afghanistan are may never be known, but the possibility that the minerals may never be able to reach their true potential in the squabble cannot be ignored.

Ignoring the ifs and the buts of the situation, if we consider this news strictly from the viewpoint of someone from the automotive or battery industry, this might in fact be a goldmine. It is a known fact that the rising price of lithium may well dampen the future of electric vehicles as Lithium ion batteries—which can pack more energy and power with less weight and space—are seen as the key to the next generation of hybrid and electric cars. In the face of this, the discovery of vast lithium reserves, whose worth is claimed to be upwards of $1 trillion, can indeed speed up the race for electrification and brighten the future for EVs.

It is an interesting question as to who will get to dominate the mining industry in the country. The presence of an arguably unstable and corrupt government may turn it into another Bolivia, with immense potential, but too many restrictions. On the other hand, China would surely want to have as large a piece of the pie as it can. It is swiftly becoming an electric vehicle powerhouse, recently surpassing the U.S. as the world’s largest automobile industry. The strong military presence that the US has in Afghanistan will surely be a factor too, as they will want to capitalise on the fact that they were the ones who discovered the minerals in the first. Also, Obama’s $2 billion stimulus dedicated to the development of advanced batteries for fuel-efficient cars speaks volumes of their desire to become a major player in lithium ion battery technology and manufacturing.

How difficult it will to be mine lithium is another issue. Cost is an important consideration as lithium is known to be hard and expensive to extract, especially as it is spread over a large area. Only time will tell whether Afghanistan will become a “Saudi Arabia of lithium”, but if handled correctly, this discovery could go a long way in stabilising the price of Lithium, and the EV future in the long term.