Iran says it has discovered the second largest deposit of lithium in the world

Iran says it has discovered huge deposits of lithium – an essential component in batteries for electric appliances and vehicles – in one of its western provinces.

Iranian state television quoted Mohammad Hadi Ahmadi, an official at Iran’s Ministry of Industry, Mines and Trade, as saying, “For the first time in Iran, a reserve of lithium has been discovered in the city of Hamedan.” Saturday.

The ministry believes the deposit contains 8.5 million tons of lithium, which is often called “white gold” for the fast-growing electric vehicle industry. If the claimed figure is accurate, that would make the deposit the world’s second largest known reserve of lithium after Chile, which contains 9.2 million metric tons of the metal, According to the USGS.

The gain is a crucial component in the cathodes of lithium-ion batteries in electric vehicles, as well as in rechargeable batteries such as those used in cell phones. the The price of the metal has gone up in the past year Due to rising demand for electric vehicle parts, global supply chain issues and inflation, but recently declining, it underwent a correction amid declining electric vehicle sales and slowing business activity in China, the fastest-growing electric vehicle market.

If news of a lithium deposit in Iran is true, it will be the lifeblood of the country’s battered economy.

After Iran endured several years of severe international sanctions and faced a spiraling currency, which bottomed out against the dollar in late February, Iran would benefit greatly from being able to export such valuable resources — though its trading partners would likely be limited by that. Penalties.

Isolated from the global financial system, Iran continues to impose sanctions from Western countries that accuse Tehran of providing Russia with weapons that are used in its war in Ukraine. The Iranian government has also spent nearly six months violently suppressing women’s rights and anti-government protesters.

In terms of the global lithium market, such an addition to the world’s known reserves could push prices for the metal down even further, depending on Iran’s ability to export.

Iran is also one of the largest oil and gas producers in the world, but its inability to export on a large scale due to sanctions has reduced its ability to generate revenue and foreign exchange as well as its ability to contribute to global supplies.

Analysts at Goldman Sachs see the price of lithium falling further.

“Over the next 9-12 months, we are progressively more positive on base metals, while we expect lower lithium prices along with cobalt and nickel,” a report from the bank’s Office of Commodity Research in late February wrote.

In the next two years, Goldman expects lithium supplies to grow on average 34% year over year, led by Australia and China, which have some of the largest supplies of the metal in the world.

“Although a recovery in electric vehicle sales in the second and third quarters of the 23rd quarter could temporarily lift sentiment and support lower battery metal prices, potential oversupply and excess downstream capacity is expected to depress lithium prices later in the term,” the bank wrote. average”.