Is the long-awaited ‘Bolivian lithium boom’ about to happen?
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Is the long-awaited ‘Bolivian lithium boom’ about to happen?

Bolivia’s lithium dream is nothing new. Generations of politicians have long made hollow declarations about the country’s lithium potential; but is demand finally catching up with the nation’s bountiful supply?

Practically, the compound lithium carbonate is used in small quantities in the manufacture of lithium-ion batteries – common in smart phones and electric cars. As the automotive industry turns increasingly towards electric-powered and hybrid cars, the price of lithium has again been predicted to rise 20 percent by 2017.

Lithium reserves

It is thought that Bolivia harbors about half of the world’s lithium. However, it is far from certain exactly how much lies below the vast, bleached expanse of the Salar de Uyuni salt flats in the southwest of Bolivia – the largest of their kind in the world.

Estimates vary wildly from the US Geological Survey’s modest nine million metric tons, to the Bolivian government’s predictably inflated assertion that a reserve of 100 million tons is waiting to be tapped, EFE reports. These figures represent totals of either 35 or 70 percent of Earth’s known lithium reserves.

The electric car is yet to convince the majority of consumers. Indeed, in his 2011 State of the Union address, U.S. President Barack Obama called for one million electric plug-in cars to be on North American roads by 2015. By the time 2015 had arrived, he was not even one-third of the way to meeting this target, according to Time. Despite a $7,500 tax rebate introduced for electric car buyers.

About 280,000 units were sold between Obama’s speech in 2011 and 2015 – including 120,000 in 2014. Yet sales of electric cars have been slow, due in part to concerns over charging time and range.

“Hope of humanity”

Into the fray steps Bolivia’s President, Evo Morales, who has taken to employing ever more grandiose terms to express the value of its lithium, hailing it as the “hope of humanity”, and the key to Bolivia’s economic prosperity.

“The state shall never lose sovereignty over lithium,” Morales declared in conversation with the New Yorker as he sought to assure Bolivians that his nationalization agenda would continue unimpeded.

However, in August 2016 Bolivia signed a contract with German company K-UTEC Ag Salt Technologies to design a lithium carbonate plant. “We have taken important steps towards industrializing lithium,” Morales announced, “but we are the masters here.”

Morales’ government has also sought to allay the fears of environmental destruction that shall forever accompany resource extraction. Processing lithium is a particularly hazardous procedure using an array of toxic substances.

The Bolivian president has hit out at suggestions that 1,000 square kilometres of the salt flats will be lost to mining procedures: “With the exploitation of lithium in just a 400 square kilometer area, we’ll have enough to maintain ourselves for a century,” Morales boasted recently.

Between now and 2019, the Bolivian government will invest $925 million into the lithium industry. It intends to be producing usable lithium carbonate by 2020. In addition, Brazil has reportedly made enquiries about buying the potassium chloride, a byproduct of the lithium extraction process, to use as a fertilizer – a useful safety net.

China looks to Latin America

Another factor is the increased demand from China’s manufacturing sector. The country had been producing its own lithium since the early 1960s from evaporated lakes in western Tibet, however the World Trade Organization (WTO) upheld an appeal from Japan in 2012 on the grounds that China’s export tariffs were “prohibitive”. The Chinese government was forced to look overseas for its lithium fix.

There are encouraging signs for Morales’ lithium dream. From the gradual – albeit sluggish – growth in the electric car industry to interest from investors around the world, he certainly has grounds for optimism. It has been suggested that perhaps the uncertainty of the market should be reason enough for holding off launching into a lithium export industry and spreading Bolivia’s economic hopes too thinly.

Then again, in the Salar de Uyuni and the precious resources hidden beneath it, Bolivia has something truly unique. Should a more advanced (and longer lasting) battery technology than the lithium-ion model be developed in the meantime, the country would be eyeing a staggering loss. This is a risk that Morales shall have to take.

He has little choice – Bolivia must be prepared to fuel the lithium needs of the electric car revolution when, or if, it comes. A leap of faith, perhaps, but Bolivia can ill-afford to let poor infrastructure and suspicion of multi-national profiteering become barriers to reaping the rewards of its lithium blessing.

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