“As lithium industry grows and matures, every year and its macro-economic importance becomes more evident, it increasingly starts to face a very specific set of opportunities and challenges in response to growing interest of regulators, academia and wider public, expressed through higher level of scrutiny, new regulations with a potential impact on the industry, need for an objective information supported by a robust data and environmental concerns.”
“From within, there is a space for improvement in terms of common standards, safer trading environment or provision of quick and amicable dispute resolution services. Lithium Trade Association, gathering lithium market and industry stakeholders will aim to make the best use of the opportunities and effectively address the challenges affecting the industry as a whole through leveraging the collective strength of its members, over the capabilities of a single entity to act on the issues of common interest, in most efficient and cost effective manner.”
The image presented to foreign players in lithium sector, regarding economic, political and social environment in the South American Lithium Triangle is usually very simplified. It paints a picture of stable and growing Chile, Argentina getting back on track with its technocratic leader and regional enfant terrible Bolivia with its populistic – and hence by definition labelled as business unfriendly policies. More detailed analysis of socio-economic and political situation in these countries rarely reaches lithium industry decision makers and analysts. The Chinese quest for dominance in lithium and battery sector best reflected by a series of bold acquisitions and investment, concluded or attempted is also rarely discussed in a wider geopolitical context of changing US foreign policy, particularly in relation to Latin America and in context of frantic attempts to regain a level playing field by large Korean and Japanese corporations. We aim to fill-in this gap and re-examine some of those commonly hold perception and believes by taking a more macro view and providing a reader with better understanding of local realities.
Chile’s flawed image of stable democracy
Since it’s embrace of democracy in 1990 Chile became a model of development – politically and economically for its South American peers. Yet with rising inequalities, as illustrated by growing Gini index (Chile outranks Nigeria and is in top 25 of most unequal economies) and wide disenchantment with politics embodied by falling voting turnout rates (In 1989, 86 percent of voters cast a ballot. In last election only 46 percent did, with decline in turnout especially among poorer parts of society – who traditionally were more likely to vote left). Chile’s image has been tarnished. Future also remains uncertain. On one hand we have a right-wing president, detached from liberal society being in favor of extended abortion rights, stricter environmental protection measures and rights for sexual minorities. On the other, leftist government promising to curb corruption in which elites drawing its power from the time of Pinochet have been involved – failing to deliver while the left’s leader family member gets entangled in land dealing scandals.
All lithium production estimates that we have encountered are quiet opaque regarding the methodology and data sources employed. They state the number of total production without quoting the exact sources, based on which estimate is build. Moreover, as per our previous article, the only free of charge report available including global lithium production estimates, published every year, comes from USGS. For most of commodities with high geopolitical and macroeconomic importance, there is usually more than one free of charge source available.
Rightly so, as this opens up the room for further discussion and cross checks the validity of estimates. Since business decisions are often based on commodities supply and demand estimates, we believe that they should be transparent, discussed and continuously improved, for any commodity and raw material.
Lithium Today looks at an ambitious and innovative project of tracking and forecasting lithium production from space. Read on how we could use satellite imagery to give you an edge in the market.
Satellite technology experiences a quiet revolution. It is driven by an entry of privately-owned SMEs into the market, which through most of its relatively short history has been dominated by governments with its closely guarded secrets.
At that time satellites have only existed in one dimension. They were massive. Their huge size has been to large extent derived from doubling and tripling devices on board to make their probability to fail when in space very small. From time to time they have failed nevertheless.
At some point engineers working with governments realized that instead of trying to build one fool proof expensive satellite which may still fail, it would make more economic sense to perhaps build a series of small, light, cheap satellites that could work together in constellations, even if it means that some of them will surely quickly become dysfunctional.
Samir Madani is a real influencer on the oil market. His innovative initiatives as crowd sourced research represented by OOTT hashtag or Tanker Trackers are great examples to follow for analysts covering other commodity classes. In an interview with Lithium Today, he talks about success factors behind his projects and new ideas that have potential to make an impact in commodities space.
Lithium Today (LT): Samir, your personal tweeter account has 22.8K followers at the moment of writing this, while FT Commodities have 34.4K followers and Reuters Commodities 29.1K followers. These are organizations with big teams, big budgets and long traditions behind them, while you are a single person who started not long ago.
Do you feel the influence on the markets? What were the key factors behind this growth of “popularity” in still a niche field?
Samir Madani: Some nights I’ll be watching CNBC or Bloomberg and hear someone talking about oil, and they’ll mention something that was raised possibly in a #OOTT retweet or discussion on Twitter. I think that’s fantastic because we’re all working with real-time information. It benefits everyone!