Trump’s tariff war might have just gotten a lot more heated as some of the countries affected the most by the tariffs may have just lost their negotiation leverage. Although most of us focused on the increase in price of finished goods, the reality is that these tariffs would have affected all areas of trade, including valuable materials like lithium that are used in manufacturing and really hard to find. But now the President may have found an advantage as some US geologists have found a supervolcano valued at 413 billion euros that contains this elusive material.
While this is not the end all be all of discoveries, it does provide a bit of potential respite for the tech industry, as they are the most reliant on lithium reserves to be able to produce most of our technology and it was one of the first imports that was restricted after the first round of tariffs was announced. But a big part of the problem remains. Despite of the fact that lithium can now be found stateside, most tech companies have their factories abroad, which means that having just one of the components available can cut some costs but will not solve the entire issue.
The supervolcano that will provide the necessary lithium
While some experts may have assigned a value of 413 billion euros to this discovery, the reality is much more complicated than that. Discovered by some scientists late last year after a study commissioned by Lithium Americas, this new “goldmine” has been unofficially declared as a savior for lithium production. Located within the McDermitt Caldera on the border of Nevada and Oregon, it is an inactive volcano that, within its borders allegedly contains between 20 million to 40 million metric tons of lithium in a bed of clay.
If this were true, it would be one of the biggest reserves of lithium ever discovered and in an almost unheard of concentration, up to 2.4% by weight when the global average for this mineral is 0.4% by weight. So, what is the problem with this discovery and why should we cool down our expectations?
Well, even the discovering company Lithium Americas is unsure about the feasibility of mining these reserves. It is a complicated location and the necessary infrastructure to do it properly and safely cannot be set in place in just a few months. In fact, should everything go smoothly and all permits be approved, safety inspections passed and hurdles cleared (which is a lot to expect with a project of this magnitude as just the environmental studies could take years to complete) there would not be any material exiting the new mine before the end of 2026.
What this means in practical terms is that even if Trump attempts to use this as leverage in his negotiations with producers abroad that already have this infrastructure in place, most companies will still need to cave eventually and continue to purchase from foreign sellers for at least a couple more years, regardless of the price.
But why is this discovery so important, is lithium really that valuable? The short answer is yes, the longer one is that today it is used in the production of rechargeable lithium-ion batteries, which are essential for powering electric vehicles, smartphones, laptops, tablets, and residential energy storage systems tied to renewable sources. In addition to that, it is also used in industries like ceramics, glassmaking, aviation, pharmaceuticals, and lubricants, making extremely versatile.
As of today, the bulk of the world’s known reserves are concentrated in South America, specifically in Bolivia, Argentina, and Chile (although some Asian countries like China are also producers) and the area is often referred to by specialists as the “Lithium Triangle.”