Lithium mining companies in Australia are on a roll. This can be seen in the share-price increases since November last year of the listed companies most advanced in this sector.
Why the boom? Because batteries incorporating lithium are being increasingly used in electric vehicles.
And the market appears to share the view of the Australian Greens that “electric vehicles are the future”, because of the perceived absence of greenhouse-gas emissions associated with them.
Australia is the world’s largest producer of lithium mineral products, followed by Chile, Argentina and China.
By far the largest producing mine in Australia is Greenbushes, south of Bunbury in Western Australia and owned by Talison Resources. (The company, which is not listed in Australia, is Chinese-owned, having been Canadian-owned up until 2013.)
In assessing the outlook for electric vehicles, two issues are important. 
First, do these vehicles have the environmental benefits attributed to them?
Seen in isolation, they are model citizens. However, they should not be seen just in isolation.
For example, if the electricity they use is coal-fired, they are simply swapping one fossil fuel (petrol) for another (coal).
Furthermore, the manufacturing process for electric vehicles produces roughly twice the level of greenhouse-gas emissions per vehicle as the manufacturing process for conventional vehicles. (It is also more harmful on some other measures, e.g. toxicity, metal depletion.)
According to a 2013 study, “it is counter-productive to promote electric vehicles in areas where electricity is primarily produced from lignite, coal or even heavy-oil combustion” and “only limited benefits are achieved by electric vehicles using electricity from natural gas”.
(Source: Comparative environmental life cycle assessment of conventional and electric vehicles, Journal of Industrial Ecology, Volume 17, No. 1.)
Second, speaking of electric vehicles, the US venture capitalist, Vinod Khosla, offers the following pithy comment: “Real change needs to meet the “Chindia price.” That’s the price at which people in India and China will use your product without subsidies. Unless your technology can achieve unsubsidized competitiveness against the market and fossil fuels, you’re just a toy.”
In short, electric vehicles will only find their place in the sun when they rely on non-renewable energy (not coal or natural gas) and when they achieve the “Chindia price”.
At best, this will take years. The lithium boom is unlikely to last that long.
