In one of many extra distant areas on the planet, excessive within the Andes, lies the Salar de Uyuni, the famed salt flats stretch throughout greater than 4,000 sq. miles in Potosi, Bolivia, well-known for the fabulous wealth in silver extracted there by the Spanish in colonial instances. Now a brand new age of mining may deliver a twenty first century El Dorado for the impoverished South American nation, as geologists consider that greater than half the world’s reserves of lithium could lie underneath the salt pans.
Authorities officers declare that Bolivia possesses the world’s greatest lithium reserves, and so they additionally consider the nation is poised to revenue from automotive producers that are driving to develop electrical automobiles that can run on lithium ion batteries.
“Bolivia will grow to be an enormous producer in six years of batteries,” Luis Alberto Echazu, the minister of mining and metallurgy, mentioned in an interview. He ticked off three corporations that he mentioned have expressed curiosity in investing within the authorities’s lithium enterprise: Sumitomo, Mitsubishi and Bollore, a French firm.
Lithium is the lightest metallic and the least-dense stable. It is usually extracted from beneath salt flats, presently about 70% of the world’s provides come from Chile and Argentina. The U.S. Geological Survey says 5.4 million tons of lithium may probably be extracted in Bolivia, in contrast with 3 million in Chile, 1.1 million in China. Impartial geologists estimate that Bolivia could have additional lithium deposits at Uyuni and its different salt deserts, although excessive altitudes and the standard of the reserves may make entry & extraction troublesome.
Whereas estimates fluctuate broadly, some geologists say electric-car producers may draw on Bolivia’s lithium deposits for many years. Extra importantly, the US is estimated to have lower than 400,000 metric tonnes accessible for exploitation inside its borders. Whereas lithium batteries do not presently energy hybrid autos, analysts suppose that the fuel-efficient electrical automobiles of the longer term seemingly will use them. With an estimated 20,000 tons of lithium carbonate anticipated yearly from the salt flats, a rising demand for lithium for electrical automotive batteries, and with the value of a ton of lithium up from $350 in 2003 to $3,000 this yr, a possible bonanza beckons for socialist President Evo Morales.
“There are salt lakes in Chile and Argentina, and a promising lithium deposit in Tibet, however the prize is clearly in Bolivia,” Oji Baba, an government in Mitsubishi’s Base Metals Unit, mentioned in La Paz. “If we wish to be a pressure within the subsequent wave of cars and the batteries that energy them, then we should be right here.”
Mitsubishi is just not alone in planning to provide automobiles utilizing lithium-ion batteries. Ailing automotive producers in the USA are pinning their hopes on lithium. Common Motors (NYSE – GM) plans to roll out its Volt in 2010, pairing a lithium-ion battery together with a petroleum engine. Nissan, Ford and BMW, amongst different carmakers, have comparable initiatives.
Demand for lithium, has climbed as makers of batteries for BlackBerrys, iPhones, laptops & different digital units use the mineral. However the automotive trade holds the most important untapped potential for lithium, analysts say. Because it weighs lower than nickel, which can also be utilized in batteries, it might enable electrical automobiles to retailer extra power and be pushed longer distances.
Nonetheless, President Evo Morales & Bolivias highly effective in style motion are suspicious of overseas corporations & have a monitor document of arbritary dealings with overseas issues, as Brazil discovered in 2006, when Morales nationalised all pure gasoline issues in Bolivia, together with operations by UK producer BP (NYSE – BP). The tip end result being that overseas corporations have halted all funding in Bolivian alternatives.
“There are pretty important obstacles to growing the useful resource in Bolivia,” mentioned Timothy McKenna, vice chairman of investor relations at Rockwood Holdings, one of many three main lithium producers in Latin America.
On the La Paz headquarters of Comibol, the state company that oversees mining initiatives, Mr. Morales’s imaginative and prescient of mixing socialism with advocacy for Bolivia’s Indians is prominently on show. Copies of Cambio, a brand new state-controlled every day newspaper, can be found within the foyer, whereas posters of Che Guevara, the leftist icon killed in Bolivia in 1967, seem on the entrance to Comibol’s workplaces.
“The earlier imperialist mannequin of exploitation of our pure assets won’t ever be repeated in Bolivia,” mentioned Saúl Villegas, head of a division in Comibol that oversees lithium extraction. “Perhaps there could possibly be the potential for foreigners accepted as minority companions, or higher but, as our shoppers.”
A possible mannequin could already be in place, India’s Jindal Metal & Energy signed a $2.1 billion deal in 2008 for the exploitation of iron reserves in south-eastern Bolivia, close to the border with Brazil. This can enable Jindal, India’s main metal producer, to develop 50% of El Mutun, broadly believed to be the most important untapped iron ore deposit on this planet, together with metal making services. With an estimated 40 billion tons of iron ore reserve, El Mutun is predicted to generate $200 million a yr for Bolivia, plus as much as 21,000 jobs when the business manufacturing of metal begins in 2010. It’s closely rumoured that Jindal received the concession resulting from its environmental monitor document. In 2007, Jindal was awarded India’s Nationwide Vitality Conservation Award within the Built-in Metal Crops Sector for its success in defending the surroundings by adopting eco-friendly processes and actions.
The chance to complement the nation is there & a cautious steadiness between overseas technological & monetary help in growing the deposits, while offering a cheap & ecological bias for Bolivia is clearly required. The actual query is can Morales stroll the tight rope between populist politics & actuality ? My opinion, he’ll get there, as has not too long ago been seen, collapsing oil costs have had a serious damaging impact on Venezuela & Hugo Chavez affect within the area & past. So one route for Overseas Direct Funding appears to be like to be closed. Morales is a pointy operator & I can see him letting overseas corporations into partnership with Comibol, however positively on Bolivian phrases.