In the nation of Bolivia, the locals are sitting on a stockpile of white gold. No, they haven't found a hidden gold deposit, but they have claim over something far more valuable -- lithium.
As battery efforts explode worldwide and the industry braces for electric vehicles, the demand for lithium, the current material primarily used in batteries, is at an all time high. The situation is exacerbated by the fact that lithium is a scarce resource, with deposits only in a few locations worldwide.
Oji Baba, an executive in Mitsubishi's Base Metals Unit, describes, "There are salt lakes in Chile and Argentina, and a promising lithium deposit in Tibet, but the prize is clearly in Bolivia."
Bolivia is becoming a hotbed for a brewing economic resource war. While some expect the Arctic oil resources to become the most hotly contested resource, the race for lithium could get just as nasty or worse. On one side is the increasingly nationalistic government; on another side is a plethora of industrialized nations, and on a third front is Bolivia's indigenous people, who expect to receive a cut of the profits.
With over half the world's known lithium sitting beneath the deserts of Bolivia, many nations are desperately trying to make a deal with the government. The Bolivian government is headed by President Evo Morales, who has criticized the U.S. heavily and promoted nationalization of industries. He has already nationalized the oil and natural gas industries, and as he and other Bolivians realize the true value of their deposits. Many fear he will nationalize the lithium supply as well.
Some of the indigenous people are also demanding a cut. States Francisco Quisbert, the leader of Frutcas, a group of salt gatherers and quinoa farmers on the edge of Salar de Uyuni, "We know that Bolivia can become the Saudi Arabia of lithium."
Japan and France, undeterred by Bolivia's increasing hostility towards the U.S. and other nations, have sent business representatives to the nation to try to negotiate resource deals. Their representatives have traveled to La Paz, the capital of the nation, in hopes of brokering such an arrangement.
Mitsubishi is among the ones strongly pushing for exclusive deals. However, many other companies in France, Japan, and even the U.S. also have shown interest -- among them are GM, Nissan, Ford and BMW, all of whom have electric vehicle projects.
For decades, lithium saw small demand for use in mood-stabilizing drugs and thermonuclear weapons. That demand began to creep up as cell phone makers adopt it as their battery material of choice, thanks to its high energy density per volume and weight, compared to other technologies like nickel metal hydride. And now those same lures -- the low weight per energy density -- have lured in its biggest customer yet, the auto industry.
The amount of lithium needed to make the massive battery packs in millions of planned electric vehicles will be unprecedented. And the resource's scarcity is not only increased by its limited geographic distribution, but its difficulty to be harvested. To extract lithium, miners must pump brine -- water saturated with salt -- deep into the desert's ground. The water then is evaporated, leaving behind salt deposits, which contain lithium.
The U.S. Geological Survey pegs Bolivia's deposits at 5.4 million extractable tons. The U.S. has 410,000 tons, while China has 1.1 million and Chile has 3 million.
Juan Carlos Zuleta, an economist in La Paz urges his government to cut a profitable deal with the foreigners. He states, "We have the most magnificent lithium reserves on the planet, but if we don't step into the race now, we will lose this chance. The market will find other solutions."
quote: But that is the greatest fear I have with all this foriegn investment.
quote: Given what China owns of our debt, that probably wouldn't be a move that we could make...
quote: don't answer the phone and pretend we're not home and if they try to collect or pretend that it was some other United States that owes them money.
quote: I was reading something the other day about how he’s kissing up to all the foreign oil firms he nationalized, trying to get them to come back and invest.
quote: Living in Brazil and seeing what the Bolivian President (Evo Morales) did to nationalize the Natural Gas resources (the army went into production facilities and refining facilities and just took over and the companies received nothing back...Petrobras - Brazilian Oil Company had invested over $800 mil there - all went down the drain oh...and they raised the price of Gas as well),
quote: If I had to guess, I'd say the reason the US govt. put a freindly face on in this last election is simply because it can no longer afford to play mr. strongarm.
quote: We put on a friendly face because we don't give a sh!t what happens in South America. Even Jon Stewart was making fun of Venezuela.