Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Eyes on Afghanistan as Next Lithium Mother Lode

By Oilprice.com - Mar 25, 2014 at 9:38AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Could Afghanistan become the Saudi Arabia of lithium?

This article was written by Oilprice.com -- the leading provider of energy news in the world. Also check out this recent article:

As American troops prepare to leave Afghanistan, the U.S. has handed over prized mineral data to Kabul, which is hoping it can provide enough security to lure investors to key mineral deposits that could turn the country into the Saudi Arabia of Lithium in the best-case scenario, or another conflict minerals venue like Congo.

Earlier this month, the U.S. Geological Survey handed Kabul highly advanced hyper-spectral imaging of mineral deposits covering about 70% of the countries territory, but security, infrastructure and legislation must be addressed before these deposits can be tapped into.

Joseph Catalino, acting director of the DOD task force, said the Defense Department's Task Force for Business and Stability Operations (TFBSO) was working with private-sector firms to encourage them to invest in Afghanistan's mineral and hydrocarbon sectors.

"Big companies, small companies, even really small companies are all asking the same questions -- what's there, where do we look and where do we drill? That's where this data comes into play," Catalino was quoted as saying.

In 2010, U.S. geologists estimated that Afghanistan held some $1 trillion in mineral deposits such as lithium, copper and iron, and the American gift to Kabul here is the extremely valuable hyper-spectral imaging, which the Afghan authorities are hoping will help lure in investors.  

As it stands, Afghanistan is taking in less than $150 million in mining revenues annually, but officials in Kabul are eyeing a figure in the billions by 2020.

Lithium is positioned to play a key role in this mining venue, as Afghanistan is said to have one of the world's largest untapped reserves.

Lithium—a soft metal used to make lithium-ion and lithium-polymer batteries, which are used to power everything from electric cars to smart phones and computers—could even turn Afghanistan into the "Saudi Arabia of Lithium", according to a Pentagon memo. That would challenge the current lithium leader, Bolivia, which is the world's largest exporter of the high-demand element.

And with lithium demand predicted by some to more than double in the next decade, securing the next big extraction venue is high on the list of priorities for manufacturers who depend on the element.

Another big venue for lithium could mean a lot for a company like Tesla ( TSLA 4.24% ), for instance, which is planning its own $5 billion lithium-ion Gigafactory in Texas.

"At some point, if present trends continue, demand [for lithium] will outstrip the supply. And again, at some point, the market for lithium-ion could get so big that it actually affects the supply chain," said Donald R. Sadoway, a professor of the Materials Chemistry Department of Materials Science and Engineering at MIT.

 
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$1,051.75 (4.24%) $42.74

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
633%
 
S&P 500 Returns
140%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/07/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.