THAILAND REPORT
The Thai government has announced the discovery of a large lithium deposit, calling the deposit the third largest in the world after Bolivia and Argentina. It has estimated reserves of approximately 14.8 million tons. The deposit was found at two sites in the southern province of Phang Nga. However, it will take some time to find out how much of the discovered resources can be used.
Thailand is keen to become the center of EV production in Southeast Asia, leveraging its experience in assembling conventional cars, and the discovery of the lithium deposit will give the country a boost in achieving this goal.
Source: AFPBB
PSR Analysis: Thailand, which has maintained its position as an export base for pickup trucks, and Indonesia, with a domestic market of 270 million people, are the two largest producers in the Southeast Asian automotive industry. In response to the transformation of the automotive industry, both countries have introduced policies to attract investment and promote domestic companies.
Since 2014, Indonesia’s sales volume has often exceeded that of Thailand. Another strength of Indonesia is that it produces a large amount of nickel and has important strategic resources domestically. In terms of its competition with Indonesia, this news is clearly positive for the Thai auto industry.
However, it remains to be seen how these discoveries will affect the Thai economy. If much of the estimated 2 million tons of lithium can be used as battery material, the balance of power in the race to acquire lithium will change dramatically.
Naturally, the Thai government wants to make effective use of this resource, but lithium mining involves the risk of environmental pollution. Naturally, foreign investors will consider developing or acquiring mines. The development of batteries that use less lithium is also underway, which could reduce demand. What will happen in the future remains to be seen, but we will have to keep a close eye on how this deposit will affect the Thai economy and the global EV shift. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
