[Marxism] Bolivia's promising lithium reserves

[Marvin Gandall]

February 3, 2009
In Bolivia, a Tight Grip on the Next Big Resource
By SIMON ROMERO
New York Times

UYUNI, Bolivia — In the rush to build the next generation of hybrid or 
electric cars, a sobering fact confronts both automakers and governments 
seeking to lower their reliance on foreign oil: almost half of the world’s 
lithium, the mineral needed to power the vehicles, is found here in 
Bolivia — a country that may not be willing to surrender it so easily.

Japanese and European companies are busily trying to strike deals to tap the 
resource, but a nationalist sentiment about the lithium is building quickly 
in the government of President Evo Morales, an ardent critic of the United 
States who has already nationalized Bolivia’s oil and natural gas 
industries.

For now, the government talks of closely controlling the lithium and keeping 
foreigners at bay. Adding to the pressure, indigenous groups here in the 
remote salt desert where the mineral lies are pushing for a share in the 
eventual bounty.

“We know that Bolivia can become the Saudi Arabia of lithium,” said 
Francisco Quisbert, 64, the leader of Frutcas, a group of salt gatherers and 
quinoa farmers on the edge of Salar de Uyuni, the world’s largest salt flat. 
“We are poor, but we are not stupid peasants,” he said. “The lithium may be 
Bolivia’s, but it is also our property.”

The new Constitution Mr. Morales managed to pass handily last month bolsters 
such claims. One of its provisions could give Indians control over the 
natural resources in their territory, strengthening their ability to win 
concessions from the authorities and private companies, or even block mining 
projects.

None of this is dampening efforts by foreigners, including the Japanese 
conglomerates Mitsubishi and Sumitomo and a group led by a French 
industrialist, Vincent Bolloré. In recent months all three have sent 
representatives to La Paz, the capital, to meet with Mr. Morales’s 
government to gain access to the lithium, a critical component for the 
batteries that power cars and other electronics.

“There are salt lakes in Chile and Argentina, and a promising lithium 
deposit in Tibet, but the prize is clearly in Bolivia,” Oji Baba, an 
executive in Mitsubishi’s Base Metals Unit, said in an interview in La Paz. 
“If we want to be a force in the next wave of automobiles and the batteries 
that power them, then we must be here.”

Mitsubishi is not alone in planning to produce cars using lithium-ion 
batteries. Ailing carmakers in the United States are pinning their hopes on 
lithium, including General Motors, which next year plans to roll out its 
Volt, a car using a lithium-ion battery along with a gas engine. Nissan, 
Ford and BMW, among other carmakers, have similar projects.

Demand for lithium, long used in small amounts in mood-stabilizing drugs and 
thermonuclear weapons, has climbed as makers of batteries for BlackBerrys 
and other electronic devices use the mineral. But the automotive industry 
holds the biggest untapped potential for lithium, analysts say. Since it 
weighs less than nickel, also used in batteries, it would allow electric 
cars to store more energy and be driven longer distances.

With governments, including the Obama administration, seeking to increase 
fuel efficiency and reduce their dependence on imported oil, private 
companies are focusing their attention on this desolate corner of the Andes, 
where Quechua-speaking Indians subsist on the remains of an ancient inland 
sea by bartering the salt they carry out on llama caravans.

The United States Geological Survey says 5.4 million tons of lithium could 
potentially be extracted in Bolivia, compared with 3 million in Chile, 1.1 
million in China and just 410,000 in the United States. Independent 
geologists estimate that Bolivia might have even more lithium at Uyuni and 
its other salt deserts, though high altitudes and the quality of the lithium 
reserves could make accessing the mineral difficult.

While estimates vary widely, some geologists say electric-car manufacturers 
could draw on Bolivia’s lithium reserves for decades to come.

Amid such potential, foreigners seeking to tap Bolivia’s lithium reserves 
must navigate the policies of Mr. Morales, 49, who has clashed repeatedly 
with American, European and even South American investors.

Mr. Morales shocked neighboring Brazil, with whom he is on friendly terms, 
by nationalizing its natural gas projects here in 2006 and seeking a sharp 
rise in prices. He carried out his latest nationalization before the vote on 
the Constitution, sending soldiers to occupy the operations of British oil 
giant BP.

At the La Paz headquarters of Comibol, the state agency that oversees mining 
projects, Mr. Morales’s vision of combining socialism with advocacy for 
Bolivia’s Indians is prominently on display. Copies of Cambio, a new 
state-controlled daily newspaper, are available in the lobby, while posters 
of Che Guevara, the leftist icon killed in Bolivia in 1967, appear at the 
entrance to Comibol’s offices.

“The previous imperialist model of exploitation of our natural resources 
will never be repeated in Bolivia,” said Saúl Villegas, head of a division 
in Comibol that oversees lithium extraction. “Maybe there could be the 
possibility of foreigners accepted as minority partners, or better yet, as 
our clients.”

To that end, Comibol is investing about $6 million in a small plant near the 
village of Rio Grande on the edge of Salar de Uyuni, where it hopes to begin 
Bolivia’s first industrial-scale effort to mine lithium from the white, 
moon-like landscape and process it into carbonate for batteries. Mr. Morales 
wants the plant finished by the end of this year.

Workers here were in a frenzy to meet that goal during late January, 
laboring under the sun around half-finished walls of brick. Over a meal of 
llama stew and a Pepsi, Marcelo Castro, 48, the manager overseeing the 
project, explained that along with processing lithium, the plant had another 
objective.

“Of course, lithium is the mineral that will lead us to the post-petroleum 
era,” said Mr. Castro. “But in order to go down that road, we must raise the 
revolutionary consciousness of our people, starting on the floor of this 
very factory.”

Beyond the tiny plant, lithium analysts say Bolivia, one of Latin America’s 
least developed nations, needs to be investing much more to start producing 
carbonate. But with economic growth slowing and a decline in oil prices 
limiting the reach of its top patron, Venezuela, it remains unclear how 
Bolivia can achieve this on its own.

At a lithium conference last week in Chile’s capital, Santiago, Bolivia’s 
government confounded the mining industry further. Bolivia’s mining 
minister, Luis Alberto Echazú, attended and was an eagerly anticipated 
speaker, but he canceled his talk at the last minute, according to 
attendees.

Still, even though Mr. Morales is asserting greater control of the economy 
and taking over oil and gas projects, optimistic industry analysts point out 
that he allowed some foreign companies to remain in the country as minority 
partners.

Mining lithium in Bolivia has its own history of fits and starts. In the 
early 1990s, nationalist opposition reportedly led by Gonzalo Sánchez de 
Lozada, a wealthy holder of mining concessions who later became Bolivia’s 
president, thwarted a plan by Lithco, an American company, to tap the 
lithium deposits here.

That history, coupled with Mr. Morales’s current tensions with Washington, 
might help explain why American companies appear to be on the sidelines as 
others seek lithium deals here. Mr. Sánchez de Lozada was ultimately forced 
to resign as president in 2003 after Mr. Morales led protests against his 
efforts to export another natural resource, natural gas, with the help of 
foreign capital.

As Bolivia ponders how to tap its lithium, nations with smaller reserves are 
stepping up. China has emerged as a top lithium producer, tapping reserves 
found in a Tibetan salt flat.

But geologists and economists are fiercely debating whether the lithium 
reserves outside of Bolivia are enough to meet the climbing global demand.

Lithium experts like Keith Evans, a California-based geologist, reckon that 
accessible lithium resources outside Bolivia are significantly larger than 
estimates by the United States Geological Survey.

Juan Carlos Zuleta, an economist in La Paz, said: “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 for 
the world’s battery needs.”

On the flat salt desert of Uyuni, such debate seems remote to those still 
laboring as their ancestors did, scraping salt off ground into the 
cone-shaped piles that line the horizon like some geometric mirage. The 
lithium found under the surface of this desert seems even more remote for 
these 21st-century salt gatherers.

“I’ve heard of the lithium, but I only hope it creates work for us,” said 
Pedro Camata, 19, his face shielded from the unforgiving sun by a ski mask; 
cheap sunglasses covered his eyes. “Without work out here, one is dead.”

http://www.nytimes.com/2009/02/03/world/americas/03lithium.html?pagewanted=print