An enormous lithium deposit, potentially the world’s largest, has been found at a volcanic crater on the Nevada-Oregon border, with estimates ranging between 20-40 million tons. Lithium is vital to the production of batteries for electric vehicles (EVs), which are crucial in the fight against climate change. This discovery could alleviate geopolitical tensions and environmental concerns, as the US previously lacked significant lithium reserves, most of which are located in Chile, Bolivia, Argentina, China, and Australia.

The discovery reaffirms the economic principle of supply elasticity. It demonstrates that when a resource becomes scarce and its price rises, efforts to discover new supplies or substitutes usually intensify. In the case of lithium, potential alternatives include various types of innovative battery technologies.

Despite this encouraging find, the demand for lithium, driven by the burgeoning EV industry and usage in computer batteries, continues to outpace supply. Even with the expected opening of more lithium mines globally, the demand is unlikely to be met solely through these sources. Therefore, lithium prices and exploration opportunities are predicted to stay strong.

Read more at Bloomberg.