The identification of a significant lithium deposit in the US Northwest, speculated to be valued at over a trillion dollars, might significantly impact the nation’s economy.
This deposit is situated in the McDermitt Caldera, a 45-by-35 kilometer crater that stretches across southeastern Oregon and northern Nevada. The site is believed to have up to 40 million metric tons of lithium.
This caldera, created 16.4 million years ago by a large volcanic eruption, now holds the distinction of being the largest known lithium deposit globally, with an estimated value of $1.5 trillion.
Lithium, often referred to as ‘white gold’, is essential for both large-scale energy and vehicle production, as well as for smaller, everyday items.
With the US and China having a temporary pause on tariff tensions until August 12, this discovery could potentially reduce America’s reliance on foreign lithium. This would bolster national security and invigorate domestic supply chains.
Given the increasing demand for electric vehicle (EV) batteries, the ramifications are substantial not only for the government but also for the EV sector, including figures like Tesla’s Elon Musk, who stands to benefit greatly.
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Lithium plays a crucial role in lithium-ion batteries, which are used to power electric vehicles, presenting a significant opportunity for Tesla CEO Musk.
Even though Tesla reported a 20 percent decline in automotive revenue in their Q1 results, it’s clear that this isn’t enough to discourage Musk.
It’s a positive sign, as the demand for electric cars, and consequently, lithium batteries, continues to rise.
According to the International Energy Agency (IEA), in 2024, “electric car sales rose by 25 percent to 17 million, and annual battery demand surpassed 1 terawatt-hour (TWh) – a historic milestone.”
Presently, China dominates the production of lithium-ion batteries worldwide, with over 80 percent manufactured there, as reported by Inside EVs.
This enormous lithium deposit could position the US among the leading producers, potentially overtaking China, capturing a significant portion of their market share, and ultimately generating substantial revenue.
Additionally, renewable energy sources like solar and wind depend on large-scale battery storage to stabilize supply.
Lithium-ion batteries are already employed in grid storage systems to store excess energy and release it when demand increases.
Consequently, a greater supply of lithium translates to more batteries, enhancing the reliability of the US renewable energy infrastructure.
It also lessens the US’s dependence on other countries, such as Canada, for lithium essential to power, which is a key component of US energy independence.
On a more localized level, lithium is also vital for everyday technology such as phones, laptops, tablets, and power tools.
Similar to EV batteries, an expanded domestic supply chain of lithium from McDermitt could decrease reliance on foreign sources like Australia, Chile, and China, thereby enhancing the US’s supply chain security.
This advantage could prove beneficial for the US when negotiating tariffs with countries like China in the future, reducing the necessity to outsource from China and potentially disrupting the supply chain.
Despite the forecasted economic benefits of the lithium mine, there are environmental concerns associated with it. The Oregon Chapter of the Sierra Club has expressed its opposition to drilling that might damage the region’s delicate habitats, though they do support cleaner energy, viewing lithium as preferable to fossil fuels.
Some worry about potential disruptions to water sources for local communities, but Malheur County hopes the development could provide an economic boost, bringing much-needed jobs.
Developing the expansive McDermitt site could attract significant investment and employment to the area.
Nevertheless, mining such a large quantity of lithium might have severe consequences for local wildlife, particularly the sage-grouse, a bird species that has seen a significant population decline, which currently inhabits the area.
If mining operations were to commence on the Oregon side of the caldera, it might provoke opposition from indigenous tribes in the region. Tribal leaders from nearby areas have already challenged the plans, citing the land as a site for sacred ceremonies.