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Bolivia is hope to a brewing resource conflict over its lithium deposits.  (Source: NYT)

The Uyuni Salt Flats in Bolivia are home to over half the world's lithium deposits. With the prospects of millions of lithium-powered electric vehicles on the horizon, Bolivia's nationalistic government is considering taking ownership of the resources, while foreign competitors scramble over each other to try to obtain resource contracts.  (Source: Detroit News)
The scrappy race to secure lithium deposits may even outdo the race to secure new oil deposits

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."



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RE: Yet again...
By mvpx02 on 2/6/2009 1:42:37 PM , Rating: 2
Do you really think that Bolivia nationalizing its lithium industry will have the slightest tangible impact on the quality of life for most of its citizens?

Typically governments nationalize industry out of greed. Corrupt officials see corrupt CEO's making money and they want a part of it, and I guess sometimes taxation just isn't a direct enough route to the company's profits.

Bolivians will not benefit from government involvement, it would merely mean replacing the direct-deposit bank accounts of Bolivian business men with those of the government and its officials.


RE: Yet again...
By Amiga500 on 2/6/2009 4:51:55 PM , Rating: 1
Both yourself and nafhan make similar points - with admittedly considerable justification from history.

However, the stats from Venezuela would suggest that there are instances where nationalisation/socialism/whatever is helping the majority (although the haves do not like the have nots getting a hand). After all, isn't that what a democracy is supposed to be about - getting what is best for the majority with all having an equal voice?

I must stress - you need to listen to the poor ~80% of the population, not the rich ~20% who are opposed to the poor getting a chance to climb the class system. Those ~20% make much more noise - so be careful!

For instance, the overall education standards in the country have improved in the time of Hugo Chavez, as has access to medical treatment.


RE: Yet again...
By Keeir on 2/6/2009 6:08:31 PM , Rating: 3
I would like to point out that the time period you are examining for Hugo Chavez for the most part has been a time period of dramatic economic windfall due to large increase in price of the primary export of Venezuela, Oil. It will be interesting to see how the nationalized economy reacts now that money is essentially not being shoved into its hands by the world demand for oil and whether Venezuela can continue to increase standards of living with the bonus Oil Revenues


RE: Yet again...
By Amiga500 on 2/7/2009 9:53:47 AM , Rating: 2
Indeed it will.

Have they invested sufficiently in developing the fields?

Right now it doesn't look like it.


"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA














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