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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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By Captain Orgazmo on 2/8/2009 6:38:11 PM , Rating: 4
Very well put Banshee. I'm guessing you were a Ron Paul supporter last election. I think he was the only candidate who had a clue about economics and domestic policy (unfortunately his antiquated head-in-the-sand ideas about foreign policy such as abandoning NATO and NAFTA, and the peoples' tendency to vote for populist image over substance killed his presidential hopes before he even started).

Unsurprisingly, it came down to a race between two big-government, big-spending, basically identical candidates. Both morons promised to send Ben Bernanke out with Santa's bag full of imaginary money to dump on Wall Street. Only now Congress is beginning to realize that maybe giving away money they don't have to long failing industry and fat cat bankers is not such a good idea. On the other hand Obama and the democrats are already planning the next election campaign, so there is no way they want to pull the plug on the economy and let the market take care of things, because the hordes of unemployed would lynch them next election.

So Flight 1776 will continue its downward spiral until either splash down in the Hudson, or crash and burn in Queens. Back in 2000 when Dubya got elected, it was an easy prediction to say, there will be war before his first term is up. Now the future is more cloudy, but not impossible to predict.

Banshee, you are correct about what would happen should the US default on its debts. But that is just the beginning. The people will want an out. The last time this sort of economic mess happened, it cost 60 million lives to get out of it. It took Germany only half a decade to build its war machine.

This time, we all have a head start. In the past decade, China has doubled its military budget three to four times. Russia has been left with a massive cold war arsenal that they have quietly been upgrading with newly acquired Petro-bucks, and has most recently been seen invading its smaller neighbors, and putting the natural gas squeeze to its bigger ones. Japan is seeing a resurgence in nationalism to go with its already powerful economy and military, Iran is aspiring to become one big suicide bomber, and India is getting ready to have a cow on Pakistan.

The history books will say WW3 was caused by stupid people spending way beyond their means on too big houses, extra properties, hot tubs, big TVs, and RVs, and that they were enabled by self-serving and equally stupid politicians who had way more power than they knew what to do with.

"My sex life is pretty good" -- Steve Jobs' random musings during the 2010 D8 conference

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