Japanese and South Koreans Scramble for Lithium as Demand for Metal Intensifies

Japanese and South Koreans Scramble for Lithium as Demand for Metal Intensifies

By Scott Doggett March 9, 2010

Japan and South Korea are competing hard for international lithium reserves to feed a growing demand for the metal for use in batteries for mobile phones, laptops and, increasingly, plug-in  vehicles, according to an article in the subscription-based Financial Times.

Seoul has set aside $12 billion for acquisitions in the raw materials business this year and last year sent the president's brother to seal a preliminary lithium deal with Bolivia, holder of the world's biggest reserves.

Japanese rivals are snapping at Korea's heels, the Times said, with Mitsubishi Corp and Sumitomo Corp, two of the biggest trading houses, seeking rights to extract lithium from Bolivia's Uyuni salt flats, believed to hold the world's biggest deposits.

Toyota Tsuho, a trader partly owned by Toyota Motor, has agreed to buy a 25 percent stake in Argentina's Olaroz lithium-potash development, partly helped by low-interest loans from Tokyo. Not to be left out of the scramble for Latin America, South Korean conglomerate Posco is buying into lithium extraction projects in Mexico and Chile.

In spite of such efforts, Samsung Economic Research Institute, one of Korea's main think tanks, published a paper arguing that Seoul was trailing rivals in the pursuit of rare metals. It recommended the bulk of the nation's aid be linked to countries with such reserves and called on pension funds to play a bigger role in resource diplomacy.

Experts are divided on the question of how quickly the world will burn through recoverable lithium reserves. The arguments hinge not only on recoverability at higher prices but also on geopolitical security.

Scott Doggett:  is an AutoObserver.com Associate Editor.