A mixture between cobalt oxalate, tin oxalate and dispersed polyacrylonitrile (PAN) molecules has been used as a new electrode active material for lithium ion batteries. The electrode shows good capacity retention in the case that the imposed potential limit is below 2.0V. The mechanism of the reaction with lithium was studied by using XRD and 119Sn Mössbauer spectroscopy. The electrode materials become irreversibly amorphous at the beginning of the reaction, when tin oxalate is decomposed and Sn(IV) is detected. Then, the metallic ions are reduced and amorphous tin–cobalt phases are formed. Finally, previously unknown LiCoSn phases are reversibly formed near 0.0V. The oxalate groups and the PAN form an electrochemically inert matrix. Due to the matrix, the aggregation of the amorphous particles into crystalline particles upon cycling is avoided. The extraction of lithium at the potential values near 2.0V yields to tin–oxygen interactions and this feature disturbs the matrix and yields to capacity fade.