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To: LoneClone who wrote (47877)	11/23/2009 6:36:53 PM
From: LoneClone	Read Replies (1) \| Respond to of 195465

Bolivia hopes to be the Saudi Arabia of the electric car age with rare metal By Jonathan Manthorpe, Vancouver SunNovember 23, 2009 vancouversun.com In a remote corner of the high Andes is a vast, 6,575-square-kilometre salt desert that could turn Bolivia from the poorest country in South America to the indispensible sheikdom of the green energy age. The salt desert known as Salar de Uyuni in southern Bolivia covers a lake of ancient brine that contains over half the world's known and easily accessible reserves of the ultra-light metal lithium. And lithium is currently the magic ingredient identified by auto manufacturers and research scientists to make practical the manufacture of light, long-lasting and relatively cheap batteries for electric cars and trucks. Lithium carbonate is already used as the electrode in light rechargeable batteries in such things as mobile phones and laptop computers. And several auto manufacturers such as GM, Toyota, Mercedes and BMW are using lithium batteries in their hybrid cars. VW, Mitsubishi and Nissan-Renault are all working to acquire lithium batteries to power future hybrid or exclusively electric model cars. But in this rush away from dependence on oil to power road transport, developers have discovered that lithium is in limited supply. At the moment the major sources of lithium are salt deserts similar to Bolivia's Salar de Uyuni in Chile and Argentina. Other producers are Canada, Brazil, China, Portugal, Finland, Serbia, Zimbabwe and the United States. About 7.6 million tonnes of the world's known lithium reserves are in mineable silicate ores and 17.6 million tonnes in subterranean brines. But Mitsubishi and others who have studied available world supply reckon that demand will outstrip supply within 10 years. So Bolivia's Salar de Uyuni with its estimated reserves of more than half the world's known deposits of lithium is seen as a new El Dorado. But the barriers to be surmounted are formidable before Bolivia can stride away from poverty to become the wealthy catalyst of a global green revolution in transportation. The first hurdle is that the Salar de Uyuni lithium deposits are totally undeveloped. The Bolivian government of president Evo Morales has launched a $6-million project to assess the quality of the deposit. There are worries it might be contaminated with magnesium, which would make it expensive to extract usable lithium. Several foreign companies from France, South Korea and Japan have offered their services free to the Morales government in this assessment phase. They are hoping, of course, that this will give them an advantage when the government looks for partners in the development phase. The next step will be the building of Bolivia's first lithium refining facility at a cost of about $500 million with the aim of producing about 20,000 tonnes of lithium a year by 2014. But the politics of the situation create several impediments to a smooth and predictable development of the lithium reserves. President Morales, a former trade union leader and llama herder, swept to power in 2005 as Bolivia's first indigenous leader and pledged to end what he and his party see as 500 years of plunder of the country's natural resources by foreign colonial and multinational corporate powers. Morales and his ministers have said repeatedly that the lithium deposits will be controlled by the state and used for the benefit of Bolivians. The metal will not be exported in a raw state, he says. All companies interested in mining and refining the lithium must undertake to build plants in Bolivia where batteries will be manufactured. Morales has even expressed the hope that electric cars will be manufactured in Bolivia, and there are reports that one auto company is preparing a proposal to build a car plant. But Morales's socialism and his fixation with Bolivia's grim history as a Spanish colony is making investors wary. There is an unappetizing precedent. In 2006 the Morales government nationalized the oil and gas industry. Production by the government-run company, YPFB, fell dramatically as investment disappeared and corruption became rampant. So investors are not jostling to line up and do deals with the Morales government. The most likely candidates for a future partnership with the government for full-scale development of the lithium deposits are the companies now giving free advice on the quality assessment. Those are France's Bollore Group, Sumitomo and Mitsubishi from Japan and South Korea's LG Group. There's another significant problem with the Salar de Uyuni development; getting the lithium, or lithium batteries, or lithium battery-powered cars to market. Bolivia is a tantalizing 160 kilometres away from the Pacific Ocean and the port of Arica. But Arica and the 160 kilometres of land are part of Chile. Bolivia is land-locked and its repeated drives to get access to the sea was the cause of the prolonged War of the Pacific which started in 1878 as a conflict between Bolivia and Chile, but which drew in the other neighbouring coastal state, Peru, and which finally ended in 1904. Relations between the three neighbours remain strained. Bolivia and Chile still only have consular relations with each other rather than full ambassadorial representation. Bolivia's frustration at its lack of access to the sea regularly boils over. This happened in 2002 when the government of the day planned to build a pipeline for natural gas to the sea at the Chilean port of Mejillones. Anti-Chilean public opinion in Bolivia stemming from the War of the Pacific made it necessary to consider a more expensive Peruvian option. The whole issue is still up in the air because Morales came to power in 2005 saying the natural gas should be used within Bolivia to benefit Bolivians. And while Morales has frequently said he wants to improve relations with Chile, he also maintains the old claim to ownership of the 160 kilometres of land between Bolivia and the sea. jmanthorpe@vancouversun.com