The Iranian government claims it has discovered a massive deposit of lithium, potentially holding 8.5 million tons of the rare element.

Mohammad Hadi Ahmadi, an official at Iran’s Ministry of Industry, Mines and Trade, announced the discovery on Iranian state television. He added that this was the first lithium deposit found in the mountainous Hamedan province in the west of Iran.

If the 8.5 million-ton estimate is accurate, this means Iran now holds the second-largest lithium reserve in the world. It will be the largest deposit outside of South America, second only to a 9.2 million-ton deposit in Chile. With global lithium reserves estimated at 89 million tons, Iran may now possess almost one tenth of the world’s lithium supply.

Lithium prices have skyrocketed in recent years, thanks partly to increased demand for electric vehicle batteries containing the element. However, analysts from Goldman Sachs and Bank of America predict that lithium prices will drop in Q1 2023.

The quality of the deposit, as well as Iran’s ability to mine and export it, remains to be seen. Regardless, this marks a significant turning point in the future of lithium mining.

The discovery could potentially have significant geopolitical implications, with Russian state media outlet Sputnik declaring that Iran’s discovery “rendered western sanctions worthless” shortly after the announcement was made. Additionally, China could become a major purchaser of Iranian lithium as its battery industry requires increased amounts of the element.

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