The Peter Zeihan Podcast Series - Peter Zeihan || Iran Discovers a Huge Deposit of Lithium

Episode Date: March 9, 2023

The Iranians have stumbled upon what every Green dreams of...a massive store of lithium ore. If the numbers prove true, it would be the 2nd largest deposit ever discovered. But is it too good to be true?Full Newsletter: https://mailchi.mp/zeihan/iran-discovers-a-huge-deposit-of-lithium

Everybody, Peter Zion here coming to you from Vegas where I'm at the Arian and haven't left the room all day. Anywho, the big news today, it is the 6th of March, is that the Iranians have announced that they have found a massive trove of lithium ore, which if the numbers coming out of Iran are accurate, you know, there's a conversation in above itself. It will be the second largest reserves ever discovered in the world immediately after July. Now, before everyone gets overly excited, a few things to keep in mind. I mean, yes, yes, yes. I guess we should be a little bit excited because we need to expand the amount of lithium we produce by at least a factor of 10 if we have any hope whatsoever of achieving the green transition. But number one, the reserves are in a place called Hamadan,

which are on the wrong side of the Zagros Mountains from where everybody else lives. So you would have to do a mining within the heart of Iran and then ship everything up and over the mountains to get to the coast. If the Iranians were going to process it themselves, they'd have to build it out a huge amount of industrial infrastructure on the place. This isn't, this is like the Atacama where it's up in a highland desert and you just kind of shift the stuff downhill. You've got to go up and over and ore that is produced. It tends to be relatively heavy, and you don't get a lot out per ton. So either you process it in place, which Iran has never been good at, or you bring it down to the Persian Gulf, which would be one more thing that we have to

out of the Persian Gulf, which would be all kinds of that fun. problem number two iran's technical capacity is quite limited most of their own oil fields they've been basically barely getting by with their own technical skills they really need to import a lot of skills the chinese are providing some the russians are some because the europeans now are mostly gone because relations with the iranians during the ukraine war have largely broken down so there's that problem uh number three uh the primary reason that iran's oil sector is doing a really really, really badly isn't so much sanctions from the United States. It's because their own legal structure really penalizes private investment in general and foreign investment in particular.

It's not the most hostile relationship with foreign investors in the world. That would be Mexico and North Korea. But it's certainly in the bottom 5%. And while beating the American drum is certainly useful for propaganda purposes, the real problem is that the Iranians have created this legal structure that really disenfescentifies anyone coming in. So you're really talking if this is going to happen that the Iranians would have to do it themselves with their own money. And that means this isn't going to happen this year or next year or the year after or maybe even this decade. What else? Oh yeah, there's the problem the Iranians tend to lie about everything. There are a lot of countries that have lithium. But not all of them are participating in the lithium supply chains we have

right now. Obviously Chile is doing really well and they are the world's largest supplier. But Australia is in a close second, but Australia reserves are not nearly as robust. There are also many other reserves in the world, most notably Bolivia and Argentina, that have not been produced for similar reasons to Moran. The reserves in our place that's a little bit tricky to get to, and most importantly, the local financial and legal regime is very hostile to anyone who wants to do anything with private enterprise. So is it good news that more of this stuff was found? Certainly. Do I think it's ultimately going to contribute to the solution? Certainly not.

All right. See you guys next time.