Oil-Rich Iran Could Be Sitting On World's 2nd-Largest Lithium Deposit

Iran says lithium, a key metal used in batteries of mobile phones and electric cars, has been found in the country for the very first time.

What Happened: The element was discovered in the country’s western mountainous region, according to an official, reported CNBC, citing local state media.

“For the first time in Iran, a lithium reserve has been discovered in Hamedan,” said Mohammad Hadi Ahmadi, an official of Iran’s Ministry of Industry, Mines and Trade, according to the report.

The ministry reportedly pegs the lithium deposit to be in the range of 8.5 million tons — if the figure is correct, it would be the world’s second-largest known lithium reserve after Chile, which has 9.2 million metric tons.

See Also: Best EV Penny Stocks Right Now 

Why It Matters: Lithium is a key material used in the cathodes of lithium-ion EV batteries, noted CNBC.

Such batteries are used by EV manufacturers such as Elon Musk-led Tesla Inc TSLA and Ford Motor Co. F.

Iran is already one of the largest producers of oil and gas but the country is subject to U.S. sanctions on energy exports.

Despite, the sanctions the nation’s oil exports reached new highs in the last two months of 2022, reported Reuters.

In recent days, the price of Lithium has slid and the market is set for a further drop.

The fall in price follows slowing demand for electric vehicles in China as the nation plans to stop subsidies for such vehicles, according to another Reuters report.

Lithium carbonate prices in China have sunk to a 13-month low of CNY 357,500 ($51,548.64) per tonne in early march, a decline of 40% of the value in the last three months, data from Trading Economics indicated.

Lithium Carbonate Prices In China (In CNY) — Courtesy Trading Economics

Benzinga’s Take: It is unclear if Iran would be able to take advantage of such a newfound stash of Lithium. However, despite the limitations, the supply could drive Lithium prices lower.

Read Next: Tesla Said To Be Deploying Bigger Superchargers In Netherlands: What You Should Know