US move to electric vehicles is inevitable – Rockwood CEO

03 June 2010 18:03  [Source: ICIS news]

TORONTO (ICIS news)--The move towards electric vehicles in the US and elsewhere is inevitable, a development which will drive long-term growth of Rockwood’s large lithium business, chief executive Seifi Ghasemi said on Thursday.

In the US, the shift would be driven by national and economic security concerns, as well as environmental sustainability, Ghasemi told analysts at a webcast investor conference in New York.

Some 70% of US oil use went into transportation, leaving the US dependent on imported oil from “the most hostile regions in the world," Ghasemi said.

“In order to ensure the flow of that oil, we spend billions and billions of dollars having our military there” - representing a subsidy by the US government for the oil industry, he said.

“That cannot go on forever, and the US cannot afford to have some tin-pot dictators in that part of the world dictating US foreign policy,” he said.

On top of that came the economic cost of the oil, with the US transferring billions and billions of dollars each year to parts of the world where “they don’t seem to like us,” Ghasemi said. Conversion to electric vehicles would improve the US balance of trade significantly, he added.

Third was the environmental sustainability aspect, which was obvious, he said.

The transportation sector was critical to ending US oil dependence, Ghasemi said. None of the other alternative energies – solar, wind, nuclear – could solve this problem, he said.

“The only logical solution is electrification of our transportation system,” he said.

Rockwood, which describes itself as the largest global producer of lithium products, expected to see significant demand for lithium in electric cars, beginning by the middle of this decade, he said.

The US administration and lawmakers from both political parties were “getting it,” Ghasemi said, pointing to “The Electric Vehicle Deployment Act of 2010” that was introduced to Congress last month.

At the same time, a number of US firms had formed The Electrification Coalition, which included Rockwood, Nissan, FedEx, and Cisco, among others, to lobby lawmakers, he said.

The technology for lithium battery-powered vehicles was in place and many carmakers had launched or were planning to launch electric cars - including GM, Nissan, Toyota and Mercedes, he said.

Each electric vehicle required up to 40 pounds of lithium, depending on whether it is an all-electric vehicle or a hybrid. This, in turn, translated into “big numbers” if one looked at the millions of cars made each year.

“Depending on projections of the penetration of hybrid cars, the impact on Rockwood can be significant” over the long term, Ghasemi said.

He pointed to one study that predicted that by 2020 some 20% of all US vehicles would be either electric or hybrid.

Rockwood, for its part, had the room to expand its lithium production "to the demand of all the cars going electric," Ghasemi said, adding there was no shortage of lithium molecules in the world. Also, Rockwood had the only US domestic source of lithium raw material at Silver Peak, Nevada, he added.

“This is a long-term play, obviously it’s a big play, we believe in that, and that’s why we believe in the future of our company,” he said.

Check out Doris de Guzman’s Green Chemicals Blog for views on sustainability issues
For more on Rockwood visit ICIS company intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Stefan Baumgarten
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