ARTICLE IN PRESS

Resources Policy 34 (2009) 185–194

Contents lists available at ScienceDirect

Resources Policy
journal homepage: www.elsevier.com/locate/resourpol

Using the cumulative availability curve to assess the threat of mineral

depletion: The case of lithium
Andrés Yaksic 1, John E. Tilton ,2
Mining Centre, School of Engineering, Pontificia Universidad Católica de Chile, Chile

a r t i c l e in fo abstract

Article history: The cumulative availability curve shows the quantities of a mineral commodity that can be recovered
Received 9 January 2009 under current conditions from existing resources at various prices. The future availability of a mineral
Received in revised form commodity depends on the shape of its cumulative availability curve (determined by geologic
21 May 2009
considerations, such as the nature and incidence of the available mineral deposits), the speed at which
Accepted 29 May 2009
society moves up the curve (determined by future demand and the extent to which this demand is
satisfied by recycling), and shifts in the curve (determined by cost-reducing technological change and
JEL classification: other factors). While the shape of the curve for any given mineral commodity may or may not be known,
Q32 it is knowable since the geologic processes responsible for the curve’s shape took place many years ago.
L72
In contrast, the factors governing how fast society moves up the curve and how the curve shifts over
time are not only unknown but also unknowable.
Keywords:
Using lithium as an example, this article shows that knowledge about the shape of the cumulative
Mineral depletion
Mineral availability availability curve can by itself provide useful insights for some mineral commodities regarding the
Nonrenewable resources potential future threat of shortages due to depletion. Despite the inherent uncertainties surrounding the
Cumulative availability curve future growth in lithium demand as well as the uncertainties regarding the future cost-reducing effects
Lithium of new production technologies, the shape of the lithium cumulative availability curve indicates that
depletion is not likely to pose a serious problem over the rest of this century and well beyond.
& 2009 Elsevier Ltd. All rights reserved.

Introduction depletion-threatened commodities, or what one might think of as

Although depletion has not yet caused severe shortages, the rapid
growth in demand for mineral commodities over the past century –
coupled with the growth expected over the next century as the
economies of China and other developing countries expand – have
many pondering how long this benevolent situation can continue.
Although scholars and others have debated this issue for some time,
they remain divided. Nevertheless, we have learned a great deal
about mineral depletion and the nature of the threat it poses.
Still needed, however, are reliable indicators for individual
mineral commodities of the potential for depletion to produce
serious scarcity in the future—what some have called a ‘red list’ of
 Corresponding author.
E-mail addresses: aiyaksic@puc.cl (A.Y. Yaksic), jtilton@ing.puc.cl (J.E. Tilton).
1
Andrés Yaksic was a graduate student in mineral economics at the Mining
Center of the School of Engineering, Pontificia Universidad Católica de Chile at the
time this study was conducted.
2 3
John E. Tilton is Profesor de la Cátedra de Economı́a de Minerales at the
Mining Centre of the School of Engineering, Pontificia Universidad Católica de
Chile, and Research Professor in the Division of Economics and Business, Colorado
School of Mines. He is also a University Fellow at Resources for the Future. Both
authors are grateful to John H. DeYoung, Jr., and Philip Maxwell for helpful
comments.
an early warning system. In his book On Borrowed Time, Tilton
(2003) proposes such a measure—the cumulative availability
curve.3 Yaksic (2008) in his MS thesis Análisis de la Disponibilidad
de Litio en el Largo Plazo has recently attempted to illustrate the
usefulness of this methodology by applying it to the long-run
availability of lithium. This article describes this analysis and its
major findings.4
Before doing so, however, the second section, which follows
this introduction, briefly highlights the important findings of
particular relevance for our purposes flowing from the on-going
debate over mineral depletion. The third section then describes
the cumulative availability curve and its usefulness. The fourth
section estimates the cumulative supply curve for lithium and
discusses the insights it provides regarding the future availability
of this mineral commodity. Finally, the fifth section reviews the
major findings and explores some of their implications for
On Borrowed Time uses the term cumulative supply curve. Since this curve is
quite different from the conventional supply curve, to avoid confusion we now
refer to this curve as the cumulative availability curve.
4
The only other application of the cumulative availability curve of which we
are aware is Aguilera et al. (2009). This study assesses the threat that depletion
poses for petroleum products.

0301-4207/$ - see front matter & 2009 Elsevier Ltd. All rights reserved.
doi:10.1016/j.resourpol.2009.05.002
 ARTICLE IN PRESS
186 A. Yaksic, J.E. Tilton / Resources Policy 34 (2009) 185–194
assessing the threat of depletion for mineral commodities in
general.
Depletion and the long-run availability of mineral commodities
Shortages of mineral commodities can arise for a variety of
different reasons—wars, embargos, cartels and other market
manipulations, natural disasters, accidents, cyclical booms in
global demand, inadequate investment in new mines and
processing facilities, and resource depletion.5 This last – resource
depletion – it is important to note differs from all the other causes
in at least two important respects. First, shortages due to
depletion are likely to arise slowly and persistently, and to be
permanent or at least of very long duration. Shortages due to
business cycle fluctuations, wars, accidents, and so on are likely to
arise suddenly, often without much warning. Despite a few
exceptions – the DeBeers cartel, for example, probably kept
diamond prices artificially high for over a century – such
shortages are also temporary, lasting no more than a decade and
often only a couple of years or less.
Second, shortages of mineral commodities arising for reasons
other than resource depletion are quite common. Surging demand
for mineral commodities in India and especially China coupled
with insufficient investment in new production capacity over the
past decade or two, for example, have recently created global
shortages for petroleum, copper, iron ore, tin, and a host of other
mineral commodities. On the other hand, to our knowledge there
is not yet a documented case of resource depletion causing
significant shortages of mineral commodities.
That depletion has not been a problem in the past, of course,
does not mean this favorable situation will continue indefinitely
in the future. Indeed, as noted earlier, many have argued and
continue to argue that resource depletion poses a substantial
threat to the long-run availability of mineral commodities. Others
have challenged this view, and a lively debate over this issue
continues to this day. We will not review this debate here, as
Tilton (2003, 2006) has done so elsewhere.
Suffice it to say that we have learned much from the exchange
of views over the past 40 years. We know now, for example, that
the world will never literally run out of mineral commodities
despite their nonrenewable nature. This is in part because some
mineral commodities, the metals for example, are not destroyed
when used and so at some cost are available for reuse. In the case
of petroleum and other energy resources, the substitution of
cheaper alternatives, including solar and other renewable sources,
will occur long before the highest-cost nonrenewable resources
are extracted and consumed.
The debate has also highlighted the serious shortcomings of
using physical or fixed-stock measures of mineral resources to
assess the threat of depletion, even though the use of these
measures somehow manages to persevere despite their short-
comings. The fixed-stock approach typically takes estimates of the
reserves, resources, or resource base for a mineral commodity, and
assumes they reflect a nonrenewable, fixed stock of what remains
for society to consume.6 Estimates of future consumption are then
5
A shortage, as the term is often used, reflects a surplus of the demand for a
mineral commodity over its supply at the prevailing market price. For our
purposes, however, this definition is too narrow, since it is always possible to bring
demand and supply into balance by allowing price to rise. As a result, a shortage is
defined here to include situations where rising and substantially higher prices are
required to equate supply and demand. The terms shortage and scarcity are used
interchangeably, and both imply a lack of availability.
6
Reserves indicate the amount of a mineral commodity contained in deposits
that are both known (that is, discovered) and economic to exploit under current
conditions. Resources encompass reserves plus the quantity of a mineral
typically used to estimate how many years remain before the
available stock is exhausted.
Neither reserves nor resources, however, are really a fixed
stock. This shortcoming is widely recognized in the case of
reserves, since new discoveries and new technologies are
constantly adding to mineral reserves.7 Though less appreciated,
the same is true as well for resources. As Tilton and Lagos (2007)
have documented, the US Geological Survey has over the past
several decades increased its estimates of global copper resources
from 1.6 to 3.7 billion tonnes. Some of this increase came from the
realization that new technology made seabed nodules a potential
source of copper in the future, but most represents a reassessment
in light of changes in technology, geologic science concepts,
and other conditions of what is potentially available from land-
based deposits.
While a stronger case can be made that the resource base does
indeed represent a fixed stock, it is of little use in assessing the
long-run availability of mineral commodities for other reasons. In
particular, long before the last barrel of oil or the last ton of copper
were extracted from the earth’s crust, the cost of production
would become prohibitive, causing demand to decline to zero. As
a result, while the life expectancies of reserves and resources are
unduly pessimistic, those based on the resource base are unduly
optimistic. In the case of lithium, for example, the resource base
estimated at 4.8  1014 tonnes would at current rates of
consumption last for some 23 billion years.8
As a result, it is now widely (though not universally) accepted
that economic measures of mineral scarcity are more useful than
physical measures. Economic measures reflect the opportunity
costs, or what society has to give up, to obtain one more ton of a
mineral commodity. Real mineral commodity prices are the most
frequently encountered economic measures.9 A rise over time in
the real price of, for example, iron ore implies growing scarcity,
while a decline implies growing availability.
(footnote continued)
commodity contained (a) in deposits that are as yet undiscovered but which would
be economic or potentially economic once discovered, and (b) in known deposits
whose exploitation though not currently economic is potentially economic. The US
Geological Survey (2008) defines a resource as ‘‘a concentration of naturally
occurring solid, liquid, or gaseous material in or on the Earth’s crust in such form
and amount that economic extraction of a commodity from the concentration is
currently or potentially feasible’’. The resource base includes all of a mineral
commodity found in the earth’s crust. It encompasses resources, as well as a great
deal of other mineral occurrences not now considered potentially feasible for
future exploitation. The US Geological Survey (2008) does not use the term
resource base. However, the resource base encompasses what the USGS calls
resources (which include reserves) and other occurrences. The USGS defines other
occurrences as ‘‘materials that are too low grade or for other reasons are not
considered potentially economic’’. It also notes that the boundary between other
occurrences and resources is ‘‘obviously uncertain, but limits may be specified in
terms of grade, quality, thickness, depth, percent extractable, or other economic-
feasibility variables’’.
7
Moreover, within the mining industry it is widely recognized that there
exists little economic incentive to identify reserves beyond 20–30 years of
consumption, given the costs of such efforts and the time value of money.
8
The concentration of lithium in the earth’s crust is estimated at between 20
and 65 ppm and the weight of the earth’s crust at 2.4  1019 tonnes. See Erickson
(1973). Using 20 ppm produces the resource base estimate of 4.8  1014 tonnes of
lithium. In addition, the oceans contain 0.17 ppm of lithium, suggesting that this
resource contains an additional 2.5  1011 tonnes of lithium. See Steinberg and
Dang (1975).
9
Other economic measures include the real production costs of marginal
producers and user costs. User costs, which are also called Hotelling rents and
scarcity rents, reflect the net present value of the lost future profits associated with
producing one more unit of a mineral commodity now rather than in the future.
Under given conditions, user costs reflect the value of the marginal reserves in the
ground required to produce one more unit of a mineral commodity. Data on
production costs and user costs are difficult to obtain. For this and other reasons,
the real prices of mineral commodities are by far the most widely used of the
economic measures of mineral scarcity.
 ARTICLE IN PRESS
A. Yaksic, J.E. Tilton / Resources Policy 34 (2009) 185–194
Slowly rising slope
due to gradual Discontinuity in slope
increase in costs. due to jump in costs.
Price Price
and and
costs costs
Cumulative output Cumulative output
Fig. 1. Illustrative cumulative availability curves. Source: Tilton and Skinner (1987), and Tilton (2003).
While generally considered far superior to physical measures
of scarcity, trends in real prices do have their own shortcomings
and limitations.10 For example, as noted earlier, scarcity and
shortages can arise for reasons other than resource depletion. As a
result, mineral commodity prices fluctuate considerably, particu-
larly over the short run. For this reason, price trends over the long
run offer the most useful insights regarding mineral depletion.
In addition, prices reflect only those environmental and other
social costs that producers and ultimately consumers actually pay.
This means trends in real prices will overestimate the rise in
scarcity if government policies are forcing producers to internalize
an increasing share of the total social costs and underestimate the
rise in scarcity if the opposite is the case.
Perhaps the greatest shortcoming of trends in real prices as an
indicator of the future threat of depletion is that the prices we
have are historical. As a result, they largely reflect conditions in
the past. Of course, where the market anticipates future scarcities
current prices will rise as consumers and others build up their
stocks. Still, given the long-run nature of the threat from mineral
depletion, it is far from clear to what extent and how far into the
future current prices anticipate scarcity. What we would like to
know are the long-run trends in real mineral commodity prices far
into the future. Here, as the next section shows, the cumulative
availability curve can be of some help.
The cumulative availability curve
The cumulative availability curve shows the amount of a
mineral commodity that can be recovered profitably at various
prices from different types of mineral deposits under current
conditions (that is, current technology, prevailing labor and other
input prices, and so on).11 One would like the cumulative
availability curve to reflect estimates of both known (discovered)
and unknown mineral deposits. Some times this is possible, as
10
For a more complete discussion of the shortcomings of the economic
measures of resource scarcity, see Tilton (2003), ch. 3.
11
The cumulative availability curve differs from the common supply curve in
economics in two important respects. First, the conventional supply curve
indicates how much of a commodity will be supplied to the market during a
given time period, such as a year or month, while the cumulative availability curve
shows how much could be supplied cumulatively over all time. The former is a
flow variable, the latter a stock variable. The cumulative availability curve only
makes sense for commodities produced from nonrenewable resources. The
cumulative availability of corn, television sets, and trucks at prices at or above
production costs is presumably infinite. Second, the conventional supply curve
indicates how much suppliers will actually provide to the market at various prices,
which due to market power and other considerations may deviate from what they
could supply profitably at various prices. The first reference, of which we are
aware, to the cumulative availability curve is found in Tilton and Skinner (1987),
where it is called the cumulative supply curve. For more on the cumulative
availability curve, also see Tilton (2003) and Tilton (2006).
187
Sharply rising slope
due to rapid increase in costs
Price
and
costs
Cumulative output
Aguilera et al. (2009) in their attempt to construct cumulative
availability curves for petroleum resources show. However,
normally reliable information on unknown deposits is not
available, as is the case for lithium. In this situation, cumulative
availability curves can be estimated on the basis of known
deposits, as long as one keeps in mind new discoveries are likely
to shift the curve down and to the right over time.
The slope of the cumulative availability curve is positive, since
higher prices permit the profitable exploitation of poorer quality
and so higher cost deposits. However, as Fig. 1 indicates, a positive
slope is consistent with a variety of shapes with very different
implications for future resource availability. The gradually rising
curve shown in Fig. 1a implies that substantial future increases in
output are possible with only modest increases in production
costs and prices. The curves shown in Fig. 1b and c are far less
benign. Both suggest at some point substantial increases in costs
will occur making much higher prices necessary.
The cumulative availability curve is a useful expository device
for grouping the many different factors governing future mineral
commodity prices. The first group determines the shape of the
cumulative availability curve. It encompasses the various geologic
factors affecting future costs and prices, such as the nature and
incidence of mineral occurrences. The second group determines
how quickly the world moves up the cumulative availability curve.
It includes all the factors that affect current and future demand for
the mineral commodity, including growth in per capita income
and population. It also encompasses the government policies and
other factors influencing recycling and secondary production. The
third group determines to what extent the cumulative availability
curve shifts over time. It includes changes in factor costs and the
forces behind such changes, and as well the effects of innovation
and technological change on the costs of finding and producing
mineral commodities. In addition, as noted above, if the
cumulative availability curve is estimated on the basis of
identified resources only, the discovery of new deposits also
belongs to this group.
In the past, we know that the cost-reducing effects of new
technology have for most mineral commodities offset, at least
over the longer run, any upward pressure on costs caused by
higher factor prices. As a result, the cumulative availability curve
has tended to shift downward over time. For a number of mineral
commodities, the cost-reducing effects of new technology,
reflected in the downward shift of the cumulative availability
curve, have more than offset the cost-increasing effects of
depletion, reflected in the movement over time up the curve. In
such cases, the trends in real prices over the past century or more
have been downward, suggesting growing rather than declining
availability, mineral depletion notwithstanding. For most mineral
commodities, the two countervailing forces have more or less
offset each other, and their trends in real prices have been
relatively flat. Significantly upward sloping, real price trends are
 ARTICLE IN PRESS
188 A. Yaksic, J.E. Tilton / Resources Policy 34 (2009) 185–194
harder to find over the past century, which is why, as noted earlier,
there are few if any documented cases of depletion having caused
shortages or scarcity of mineral commodities in the past.
The future, of course, could be different, and our interest here
lies with possible future scarcities and thus with expected future
price trends. To assess the latter, we would like to know (a) the
shape of the cumulative availability curve, (b) the speed at which
society will move up the curve, and (c) extent to which the curve
will shift with time. With a fair amount of certainty (which is rare
when talking about the future), we know there is little hope of
reliably predicting either of the last two developments. The extent
to which the cumulative availability curve will shift depends on
the introduction and diffusion of new technologies. Both are
notoriously difficult to predict over the near term let alone over
the next century. Similarly, how rapidly society will move up the
curve hinges on changing consumer preferences for mineral-
intensive products, population growth, per capita income growth,
and trends in recycling, all of which are similarly difficult to
anticipate over the longer term.
Fortunately, the shape of the cumulative availability curve –
the first consideration – is more tractable, since it depends on the
nature and incidence of existing mineral occurrences. It is true
that our knowledge of subeconomic resources for many mineral
commodities is quite limited, since exploration is largely carried
out by firms focused on finding economic and particularly highly
economic deposits. However, it is clearly possible to obtain more
information on subeconomic mineral occurrences. These re-
sources were created in the past, in many cases hundreds of
millions of years ago, and ignorance about them largely reflects a
lack of interest on the part of exploration firms because such
deposits are uneconomic at the present time.
Moreover, as pointed out earlier, the shape of the cumulative
availability curve can provide useful insights about the potential
threat of depletion. This is true even though reliable information
regarding how fast society will move up the curve and to what
extent the curve will shift over time is unknown.
The curve shown in Fig. 1a implies, as cumulative production
proceeds over time, that the price needed to elicit additional
supply increases but at a decreasing rate. When this is the shape
of the curve, new technology should find it increasingly easy to
offset the cost-increasing effects of depletion. However,
the cumulative availability curve, at least for a number of mineral
commodities, may be less benevolent than the one shown in
Fig. 1a.
For instance, the costs of mineral commodities produced as by-
products and co-products, such as indium, gallium, cobalt, the
platinum-group metals, and of particular importance here
lithium, are lower because a substantial share of the total mining
and processing costs are borne by the associated joint products.
Should demand at some point exceed the supply available from
by-product and co-product output, these commodities would
have to be produced as main products. At this point, a substantial
jump in the price may be required, implying a sharp surge or a
discrete break in the cumulative availability curve, as shown in
Fig. 1b and c.
Moreover, according to Skinner (1976) and Gordon et al.
(1987), even copper and other major metals currently produced as
main products may have cumulative availability curves similar to
those shown in Fig. 1b and c. This, they contend, is due to the
geochemical processes that created the mineral deposits for
these metals millions of years ago, which they believe are unlikely
to have produced a benevolent unimodal relationship between
the grade and quantity of metal. Rather they suspect this
relationship may possess two or more peaks in the available
quantity of metal as grade declines. In this case, once the rich
(high-grade) deposits are exploited, society may have to turn to
much lower grade, and thus much more costly, deposits for
additional supplies.
In addition, the processing methods required to liberate the
copper and other metals in very low grade deposits may be quite
different from those employed today. In particular, the use of
mechanical and chemical processes for concentrating the ore
may not be feasible. As a result, the energy required could be one
or several orders of magnitude greater, also causing a sharp jump
in costs.
As Skinner himself points out, his thesis is largely based on
theoretical considerations. Very little empirical work has been
carried out on the costs incurred in processing very low grade
deposits, largely because the latter are of little commercial
interest.
Lithium12
The Swedish scientist Johan August Arfwedson discovered
lithium, a minor metal, in 1817. Today the world extracts lithium
from two types of resources – brines and minerals – to produce
lithium carbonate, lithium hydroxide, lithium chloride, lithium
metal, and the other lithium-containing products shown in Fig. 2.
The major end-use industries consuming these lithium products,
as Fig. 3 shows, produce batteries, lubricating greases, frits, glass,
air conditioners, aluminum, and pharmaceutical products. The
annual output of these products contains about 21,800 tonnes of
lithium. Chile, Australia, Argentina, China, and the United States
are the major producing countries accounting for 43, 25, 13, 6, and
4 percent, respectively, of the lithium extracted from brines and
minerals.13
As Fig. 4 shows, the real price of lithium carbonate (the most
important lithium product and the one for which a long-run price
series exists) has declined since 1953 (the first year figures are
available) due largely to new, low-cost sources of lithium supply
and new production technologies. As a result, lithium has over the
past half century become less, not more, scarce, and depletion has
not been a problem. Nevertheless, the expected growth in demand
over the coming century for lithium batteries to power hybrid and
fully electric automobiles has raised some concern about the
future availability of lithium (Tahil, 2007, 2008; Bradbury, 2008).14
In addition to brines and mineral deposits, lithium can be
extracted from clays and seawater. Brines – currently the most
important and cheapest sources of lithium – are largely associated
with dry lakes, such as the Salar de Atacama in the altiplano of
northern Chile. Brines are also found with geothermal deposits as
well as oil fields. Hard rock mineral deposits, as noted, constitute
the other type of resource from which lithium is currently
extracted. Although lithium is found in some 145 different
12
This section is based on Yaksic (2008) and the sources cited there. Also, see
Ebensperger et al. (2005) for an overview of the lithium industry that examines the
industry’s resources, production, end-use consumption, and prices as well as its
future prospects.
13
The figure of 21,800 tonnes for annual lithium production and the country
shares cited are estimates based on Ober (2008), Sernageomin (2006), Roskill
(2006), and other sources. The estimate of 21,800 tonnes for total lithium
production is slightly below estimates found elsewhere for the reasons noted in
Yaksic (2008, pp. 25–28). The country production figures reflect extraction from
natural resources. China and other countries that import and then further process
lithium products have larger market shares when the total value of lithium
production is considered.
14
Others, however, are less concerned. See, for example, Evans (2008a,
2008b). It is also worth noting that the current concern is not the first time that
scientists and others have worried about the long-run availability of lithium. In the
1970s an expected surge in lithium demand for use in nuclear fusion raised fears
that inadequate lithium resources could curtail the development of this new
source of energy. See Hammond (1976).
 ARTICLE IN PRESS
A. Yaksic, J.E. Tilton / Resources Policy 34 (2009) 185–194 189

Lithium
Resources Minerals Brines Clays Sea Water

Lithium
Reserves Minerals Brines

Lithium Chloride Lithium Chloride

Lithium Concentrates
Lithium Carbonate
Products
Lithium Metal

Lithium Hydroxide
Butil
Lithium

Glazes and Greases, Aluminum, Synthetic Rubber,

Frits Lubricants, Continuous Casting Polymers and
Batteries and Powder, Secondary Organic Derivates
Major Inorganic Batteries,
Applications Derivates Pharmaceuticals,
Glazes and Frits
Pharmaceuticals
Dehumidifier Systems and Primary
Batteries

Fig. 2. Types of lithium resources, reserves, products, and major end-use applications.

Others Batteries The costs, shown on the vertical axis of Fig. 5, and hence the
22% 25% prices needed to cover production costs are in terms of dollars per
Chemical pound of lithium carbonate, the most important lithium chemical.
Processing The horizontal axis shows the available resources, measured in
3%
tonnes of contained lithium (rather than tonnes of lithium
Continuous carbonate equivalent),15 whose production costs are at or below
Casting various prices. For our purposes, this difference in indicated units
3%
Lubricating is unimportant.
Pharmaceuticals
3% Greases What is important is that the curves shown are incomplete. In
Aluminum 12% particular, only a small part of the cumulative availability curves
4% Frits associated with lithium production from seawater (that is,
Glass 10% the horizontal segment at 10 dollars for the top curve and at
Polymers 8%
4% Air 7 dollars for the bottom curve) is shown.16 This is because the
Conditioning quantity of lithium recoverable from seawater is huge—
6% 44.8 billion tonnes.17 Including all this tonnage in Fig. 5 would
increase the length of the cumulative availability curves by more
Fig. 3. Major end uses of lithium. Source: SQM (2007).
than a thousand fold.

minerals, only a few (spodumene, lepidolite, petalite, amblygo-

nite, and eucriptite) are sources of lithium in deposits that have
economic value. Clays (especially hectorite) and seawater are both
potential sources of supply.
Cumulative availability curves
With the assistance of various industry and government
officials and an extensive review of the available historical
documents and studies, Yaksic (2008) has compiled a listing of
known lithium resources along with estimates of their quantities
and production costs (see Appendix). With this information, one
can construct the cumulative availability curves for lithium shown
in Fig. 5. Estimating production costs is challenging, in part
because many producing firms consider the costs of their on-
going operations proprietary and in part because one can only
approximate the costs of resources not currently being exploited.
For this reason, Fig. 5 shows production costs under two
scenarios—a high-cost or pessimistic scenario (the top curve)
and a low-cost or optimistic scenario (the bottom curve).
15
5.323 metric tonnes of lithium carbonate (Li2CO3) contain one metric ton of
lithium (Li).
16
The estimated production costs of 7–10 dollars per pound of lithium
carbonate are based on Steinberg and Dang (1975). During the 1970s the expected
growth in electric power generation from nuclear fusion was expected to increase
greatly the demand for lithium, raising concerns about its long-run availability.
Various researchers conducted laboratory-scale studies to estimate the costs of
recovering lithium from geothermal brines, oil field brines, and other potential
resources. As part of this effort, Steinberg and Dang (1975) carried out an economic
analysis for the extraction of lithium from seawater, estimating production costs
for the process in the range of 22–32 (1974) dollars per kilogram of lithium metal.
This compares with a selling price of lithium metal from conventional mineral
sources of about 20 dollars per kilogram at the time. We then increased the
estimated costs of 22–32 dollars for subsequent inflation, and then converted
them from lithium metal to lithium carbonate and from kilograms to pounds to
obtain the estimated costs of 7–10 dollars per pound of lithium carbonate from
seawater. This approach, it is important to point out, does not take into account
any reduction in production costs due to technological progress since the time of
the Steinberg and Dang study.
17
This figure assumes that 20 percent of the lithium in seawater is
recoverable.

190
7
6
Dollars per pound
4
0
1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008
Fig. 4. Average lithium carbonate prices, 1953–2008. Sources: Industrial Minerals (1999, 2000), Ober (1994–2006), US Bureau of Mines (1953–1993), Yaksic (2008).
High Cost Scenario
Low Cost Scenario
Predicted Cumulative Lithium Demand 2008 – 2100
2100
10
Cost (US$/lb. lithium
8 are between 7.00 and 10.00 dollars per pound of lithium
carbonate)
6 pound (see Fig. 4), at most depletion might drive the price up by
4 7.20 dollars a pound over the next century. Moreover, at that price
2
- source of supply.
0 5 10 15 20 25
Availability (Million tons of Lithium)
Fig. 5. Cumulative availability curves for lithium under high and low cost
scenarios with predicted cumulative demand from 2008 to 2100a. Note: aThe
reported data take into account losses that occur during processing. See Appendix
Table 3.
Implications for depletion
Having estimated cumulative availability curves for lithium,
we can consider next the future demand for lithium and how
rapidly society is likely to move up these curves. As pointed out
earlier, predictions of future mineral demand are rarely accurate
since they depend on technological change, shifting consumer
preferences, population growth, and other variables that are
difficult to estimate accurately in the longer run. For this reason,
we consider a high growth scenario, which is likely to over-
estimate the growth in demand and so represents a worse-case
scenario for lithium depletion. Table 1 identifies the specific
assumptions on which this scenario rests. In general, it assumes
that the demand for lithium in automobile batteries surges over
the coming decades and that the demand for lithium grows
briskly in its traditional end uses (other than for aluminum
production where lithium use is expected to be phased out over
the next couple of decades).
Under these conditions, the cumulative output of lithium
required from 2008 to 2100 totals 17.5 million tonnes. This figure
reflects only the needed primary lithium production, since
recycled lithium or secondary production does not deplete lithium
ARTICLE IN PRESS
A. Yaksic, J.E. Tilton / Resources Policy 34 (2009) 185–194
Current Dollars 2008 Dollars
resources and thus does not move society up the cumulative
availability curve.18
Under this worse-case scenario, at some point in the 22nd
century the world could find it attractive to extract lithium from
seawater.19 The costs of producing lithium from this source
carbonate. Since the current price is around 2.80 dollars per
an estimated 44.8 billion tonnes of lithium are available (see
Appendix Table 3), which for all practical purposes is an unlimited
30 35 40 An increase of 7.20 dollars would not significantly curtail the
use of lithium in automobile batteries. A 9 kWh lithium battery
today requires approximately 15 pounds (6.75 kg) of lithium
carbonate equivalent. As result, the lithium used in the battery
today costs approximately 42 dollars.20 This would increase to 150
dollars if the price were to rise to 10.00 dollars per pound of
lithium carbonate. This is but a small fraction of the total cost of
the battery, which can exceed five thousand dollars, and of the
total cost of the car, estimated at 20–40 thousand dollars.
The cumulative availability curves shown in Fig. 5 similarly
make it difficult to argue that depletion is behind the recent jump
in lithium carbonate prices from around 1.50 dollars a pound in
2005 to 3.00 dollars a pound in 2007, as lithium can be extracted
from many, currently available sources at less than 2.00 dollars a
pound.
Finally, it is worth highlighting two caveats that tend to
reinforce the above findings. First, the discovery of new lithium
deposits and new technologies that reduce production costs may
well shift the cumulative availability curves shown in Fig. 5
downward over time. Second, the cumulative availability curves
shown in Fig. 5 are based on conservative assumptions and
18
Under the assumed conditions, annual production in the year 2100 is
estimated at 330,000 tonnes of lithium equivalent or 1.76 million tonnes of lithium
carbonate equivalent.
19
Actually, given our likely overestimation of demand and the many known
resources of lithium we have not considered, either because resources estimates or
costs estimates are not available, we doubt that lithium will be produced from
seawater in the 22nd century unless costs of extracting lithium from seawater fall
substantially.
20
The figure of 42 dollars is an estimate only, since the lithium products used
in lithium batteries are not just lithium carbonate.
 ARTICLE IN PRESS
A. Yaksic, J.E. Tilton / Resources Policy 34 (2009) 185–194
Table 1
Lithium 2008–2100 demand forecast assumptions by major end-use markets
End-use market Assumptions
Automobile batteries (1) World population will grow according to UN
estimations from 6.5 billion people in 2008 to
9.0 billion people in 2100.
(2) The global ratio of people per automobile will
fall from 8 in 2008 to 3 in 2100.
(3) Annual battery production equals the growth
in the world vehicle fleet plus the replacement
of old car batteries (10-year average life
assumed).
(4) The percentage of hybrid and fully electric
automobiles will increase from its 2008 level
of under 1 percent to 100 percent by 2050
where it will remain for the rest of the century.
(5) Hybrid and fully electric automobiles on
average will use 9 kWh lithium batteries.
(6) Lithium batteries will on average last for 10
years.
(7) Lithium batteries will be recycled, recovering
80% of the lithium.
Secondary batteries 15% growth for ten years; then 10% growth for ten
(rechargeable years more; 3% growth until 2050; 1% growth from
portable devices) 2051 to 2100.
Primary batteries (non- 8% growth for ten years; then 5% growth for ten
rechargeable years more; 3% growth until 2050; 1% growth from
portable devices) 2051 to 2100.
Lubricating greases 5% growth for next ten years; then 3% growth for
the next twenty years; finally 1% growth until
2100.
Frits and glass 3% growth for ten years; then 2% growth for the
next twenty years; finally 0.5% growth until 2100.
Air conditioning 5% growth for ten years; 3% growth for the next ten
years; finally 1% growth until 2100.
Aluminum 0% growth for ten years; 5% reduction over the next
ten years; no lithium consumption after 20 years.
Others 4% growth for ten years; 2% growth in the next ten
years, finally 1% growth until 2100.
Notes: aThese assumptions are likely to produce demand forecasts that exceed the
actual growth in lithium consumption over the 21st century for the following
reasons: (1) the ratio of people per automobile is unlike to reach 3 by the end of
the century. (2) The assumed rate of growth of hybrid and electric vehicles – 4.5
million by 2010, 27 million by 2020, 146 million by 2050, and 308 million by 2100
– is optimistic, in part because all automobiles may not be hybrid or fully electric
by 2050. (3) Some hybrid automobiles may use smaller batteries than the assumed
9 kWh battery, containing less lithium. For example, the Toyota Prius HEV uses a
battery of 1.3 kWh. (4) New technologies may reduce the amount of lithium
needed per battery. (5) The assumption that the use of lithium in secondary
batteries, which are used in portable devices such as cell phones, will grow
between 10 and 15 percent per year over the next 20 years is optimistic. (6) The
forecasts only consider the recycling of automobile batteries, though other lithium
batteries may be recycled as well. (7) The forecasts assume that demand for the
other lithium applications (excluding aluminum production) will grow for more
than 90 years without leveling off.
estimates. The assumed recovery rates for various resources, for
example, are quite low. In the case of seawater, for instance, only
20 percent of the 224 billion tonnes of lithium in this source is
considered recoverable. In addition, a number of known but
uneconomic sources of lithium are excluded from the curves due
to the lack of reliable estimates for availability or costs.21 Overall,
21
These resources include various dry lakes in Chile, Argentina, and Bolivia
that are known to contain important volumes of lithium but have not been
explored in detail (see notes to Appendix Table 2). The same holds for a number of
lithium mineral deposits recently discovered in Australia and Canada. Marginal
geothermal brines in New Zealand, Italy, Japan, Iceland, and France are also not
considered, nor the lithium resources in North Dakota and Utah in the United
States associated with oil fields.
191
these caveats strengthen the conclusion that depletion does not
pose a significant threat to the long-run availability of lithium.
Conclusions
Over the long run, as society consumes its high quality, low-
cost mineral resources, depletion could cause the real prices of
mineral commodities to rise, threatening the high living standards
currently enjoyed in many countries around the world. Whether
this will actually take place, it is now known, depends largely on a
race between the cost-increasing effects of depletion and the cost-
reducing effects of new technology. We also know that in the
past new technology has successfully offset the tendency for
depletion to push prices higher. What we do not know, given the
inherent uncertainties surrounding the future course of techno-
logical change and the other determinants of mineral commodity
prices, is whether this favorable situation will continue in the
future.
Despite such uncertainties, lithium shows that in some
instances information about the shape of the cumulative avail-
ability curve can provide useful insights into the likely future
threat of mineral depletion. Where the curve rises gradually and
eventually becomes relatively flat (as is the case for lithium,
particularly once extraction from seawater takes place), some
assessment of the maximum long-run price is possible under any
plausible scenario of future demand growth. In the case of
lithium, for example, it appears that almost unlimited supplies
can be extracted from seawater for between 7.00 and 10.00 dollars
per pound of lithium carbonate. As the current price is about 2.80
per pound, these figures suggest that depletion will not be a
serious threat, even if lithium is widely used over the coming
century in hybrid and fully electric automobiles.
Not all mineral commodities, of course, may have such
benevolent cumulative availability curves. Mineral commodities
whose cumulative availability curves rise steeply or have discrete
breaks are more exposed to the threat of depletion.
In this regard, however, there is an important asymmetry
between mineral commodities with gradually rising cumulative
availability curves and those with steep slopes or with discrete
breaks in terms of the implications for depletion. In the case of the
former, if the relatively flat portion of the curve occurs at prices
close to current prices, as is the case for lithium, one can
confidently conclude that depletion will not be a serious threat. In
the case of the latter, however, one cannot conclude that depletion
will necessarily be a problem. The reason being in such cases we
have no way of knowing how much of the upward pressure on
costs likely to arise from depletion will be offset by the cost-
reducing effects of new innovations and technology.
Finally, for some mineral commodities the information needed
to construct cumulative availability curves is not available. This, as
we have seen, is the case for copper. On this issue, however, it is
useful to highlight the difference between information that is
unknown and unknowable and information that is unknown but
knowable. Information on technological change, population
growth, changes in future consumer preferences, and the other
determinants governing how rapidly society will move up the
cumulative availability curve and to what extent the curve will
shift down over time is not just unknown. It is also essentially
unknowable. In contrast, the geologic information needed to
estimate cumulative availability curves, though it may currently
be unknown for many mineral commodities, is knowable. At some
cost and effort, it can be obtained. And, as the case of lithium
illustrates, knowledge of the shape of cumulative availability
curves can by itself provide useful insights into the future threat
of depletion for some mineral commodities.
 ARTICLE IN PRESS
194 A. Yaksic, J.E. Tilton / Resources Policy 34 (2009) 185–194
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Resources for the Future, Washington, DC, pp. 1–158.
Tilton, J.E., 2006. Depletion and the long-run availability of mineral commodities.
In: Doggett, M.E., Parry, J.R. (Eds.), Wealth Creation in the Minerals Industry:
Integrating Science, Business and Education, Vol. 12. Society of Economic
Geologists Special Publication, Littleton, Colorado, pp. 61–70.
Tilton, J.E., Lagos, G., 2007. Assessing the long-run availability of copper. Resources
Policy 32, 19–23.
Tilton, J.E., Skinner, B.J., 1987. The meaning of resources. In: McLaren, D.J., Skinner,
B.J. (Eds.), Resources and World Development. Wiley, New York, pp. 13–27.
US Bureau of Mines, 1953–1993. Minerals Yearbook. US Government Printing
Office and US Bureau of Mines, Washington, DC.
U.S. Geological Survey, 2008. Mineral Commodity Summaries 2008. US Geological
Survey, Washington, DC. Also available at /http://minerals.usgs.gov/minerals/
pubs/mcs/2008/mcsw2008.pfdS (accessed on June 18, 2009).
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Geological Survey Professional Paper 1005. Government Printing Office,
Washington, DC.
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com/S (accessed on September 24, 2008).
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 ARTICLE IN PRESS
194 A. Yaksic, J.E. Tilton / Resources Policy 34 (2009) 185–194
Industrial Minerals, 1999. SQM raises Li2CO3 prices. Industrial Minerals (386), 90
(November).
Industrial Minerals, 2000. Chemetall and FMC raise lithium prices. Industrial
Minerals (399), 30 (December).
Industrial Minerals, 2007. Between a rock and a salt lake. Industrial Minerals (477),
58–69 (June).
Kunasz, I.A., 1994. Lithium resources. In: Carr, D.D. (Ed.), Industrial Minerals
and Rocks. Society for Mining, Metallurgy, and Exploration, Littleton, CO,
pp. 631–642.
Norton, J.J., 1973. Lithium, cesium, and rubidium—the rare alkali metals. In: Brobst,
D.A., Pratt, W.P. (Eds.), United States Mineral Resources, Geological Survey
Professional Paper 820. Government Printing Office, Washington, DC,
pp. 365–378.
Ober, J.A., 1994–2006. Lithium. In: Minerals Yearbook. US Geological Survey,
Washington, DC.
Ober, J.A., 2000. Lithium. In: Mineral Commodity Summaries 2000. US Geological
Survey, Washington, DC, pp. 100–101 Also available at /http://minerals.usgs.
gov/minerals/pubs/commodity/lithium/450400.pdfS (accessed on August 26,
2008).
Ober, J.A., 2008. Lithium. In: Mineral Commodity Summaries 2008. US Geological
Survey, Washington, DC, pp. 98–99 Alsoavailable at /http://minerals.er.usgs.
gov/minerals/pubs/mcs/2008/mcs2008.pdfS (accessed on August 9, 2008).
Orocobre, 2008, Olaroz lithium project. Available at /http://www.orocobre.
com.au/Projects_Olaroz.htmS (accessed on August 25, 2008).
Pavlovic, P., 2002, Capı́tulo 2.1 Reservas de litio. In: Estudio Económico-Jurı́dico de
una Eventual Liberalización de la Explotación y Comercialización del Litio.
Unpublished study, Ministerio de Minerı́a, Santiago, Chile.
Roskill, 2006. The Economics of Lithium. Roskill Information Services, London.
Sernageomin, 2006, Anuario de la minerı́a chilena. Servicio Nacional de Geologı́a y
Minerı́a, Santiago, Chile. Also available at /http://www.sernageomin.cl/pdf/
publicaciones/anuario2006.pdfS (accessed on October 1, 2007).
Skinner, B.J., 1976. A second iron age ahead? American Scientist 64, 158–169.
SQM, 2007, Annual report: Santiago, Chile, Sociedad Quı́mica y Minera de Chile S.A.
Also available at /http://www.sqm.com/PDF/Investors/AnnualReport/
SQM-Annual_Report_2007_EN.pdfS (accessed on September 23, 2008).
SQM, 2009, Lithium resources and view of the lithium industry, paper presented at
the Lithium Supply and Markets Conference 2009, Industrial Minerals,
Santiago, Chile. Available at /http://www.metalbulletin.com/events/Details/
Element.aspx?eventId=736&typeId=3S (accessed on February 3, 2009).
Steinberg, M., Dang, V., 1975, Preliminary design and analysis of a process for the
extraction of lithium from seawater, Technical Report 20535-R. Brookhaven
National Laboratory, Upton, NY. Also available at /http://www.osti.gov/
energycitations/product.biblio.jsp?osti_id=7351225S (accessed on December
9, 2008).
Tahil, W., 2007, The trouble with lithium: implications of the future PHEV
production for lithium demand. Meridian International Research, Martainville,
France. Available at /http://www.meridian-int-res.com/Projects/Lithium_
Problem_2.pdfS (accessed on August 10, 2008).
Tahil, W., 2008, The trouble with lithium 2: under the microscope. Meridian
International Research, Martainville, France. Available at /http://www.mer-
idian-intres.com/Projects/Lithium_Microscope.pdfS (accessed on September
24, 2008).
Tilton, J.E., 2003. On Borrowed Time? Assessing the Threat of Mineral Depletion.
Resources for the Future, Washington, DC, pp. 1–158.
Tilton, J.E., 2006. Depletion and the long-run availability of mineral commodities.
In: Doggett, M.E., Parry, J.R. (Eds.), Wealth Creation in the Minerals Industry:
Integrating Science, Business and Education, Vol. 12. Society of Economic
Geologists Special Publication, Littleton, Colorado, pp. 61–70.
Tilton, J.E., Lagos, G., 2007. Assessing the long-run availability of copper. Resources
Policy 32, 19–23.
Tilton, J.E., Skinner, B.J., 1987. The meaning of resources. In: McLaren, D.J., Skinner,
B.J. (Eds.), Resources and World Development. Wiley, New York, pp. 13–27.
US Bureau of Mines, 1953–1993. Minerals Yearbook. US Government Printing
Office and US Bureau of Mines, Washington, DC.
U.S. Geological Survey, 2008. Mineral Commodity Summaries 2008. US Geological
Survey, Washington, DC. Also available at /http://minerals.usgs.gov/minerals/
pubs/mcs/2008/mcsw2008.pfdS (accessed on June 18, 2009).
Vine, J.D. (Ed.), 1976. Lithium Resources and Requirements by the Year 2000, US
Geological Survey Professional Paper 1005. Government Printing Office,
Washington, DC.
Western Lithium Corporation, 2008. Available at /http://www.westernlithium.-
com/S (accessed on September 24, 2008).
Yaksic, A., 2008, Análisis de la disponibilidad de litio en el largo plazo. Unpublished
MS Thesis, Pontificia Universidad Católica de Chile, Santiago, pp. 1–150.