Bolivia has vast reserves of lithium, seen as the green energy fuel of the future, which it wants to exploit on its own. But the lithium is locked underneath a 10,000 sq km salt flat
Bolivia has more lithium than anywhere else in the world but its potential to fuel lithium-ion batteries for electric cars is in danger of failing.
The vast reserves of lithium dissolved in a briny lagoon underneath the crust of the world's highest salt lake have prompted all sorts of superlative comparisons – one of the most memorable is that the land-locked country will become the "Saudi Arabia of lithium".
It is not a description that goes down well with the socialist government of President Evo Morales. The nation's first indigenous leader has pledged that Bolivia will exploit the lithium reserves on its own, sustainably, and for the benefit of Bolivians.
But nearly four years after the start of a project to exploit the Salar salt flats' lithium reserves – estimated to exceed 100m tonnes – there is impatience about when Bolivians will start to benefit from its immense potential.
Lithium is seen as the green energy fuel of the future, powering iPods, mobile phones, laptops and electric cars, but Bolivia's reserves remain locked underneath a 10,000 sq km salt flat. While thousands of tourists are being welcomed to gaze at the dazzling white expanse fringed by mountains on the distant horizon, foreign investors are being forced to wait.
"A lot of people argue that the Bolivian government is being too slow in developing these reserves and will miss some kind of train," says Guillaume Roelants, chief scientist for the lithium project at Comibol, Bolivia's state mining agency. "That's absolutely false as international demand for lithium is still low despite much speculation. So I think we're just on time."
Bolivia's lithium project is still in the "pre-pilot" stage and the industrial production of up to 30,000 tonnes of lithium carbonate a year is not expected to begin until 2015, he says. "The plan, as an industry, is to supply lithium worldwide for hundreds or maybe thousands of years – so another quiet month is not a big problem," he adds.
The trauma of the Spanish colonial past has left many Bolivians deeply suspicious of multinational companies, which they often accuse of plundering their natural resources. Morales has tapped into that sentiment by nationalising the electricity and hydrocarbons sectors in South America's poorest nation as well as changing the constitution to redress the country's historic inequalities.
But this may be a historical opportunity that Bolivia is missing, argues Juan Carlos Zuleta, a Bolivian lithium economics expert. "It seems to me that the government is not really interested in developing this important resource, not just for Bolivia but for the world," he says.
He insists Bolivian scientists are still struggling find a way to industrialise the mineral and says the country must urgently seek assistance from nations with more experience in lithium production. The country's neighbours, Chile and Argentina, are already established producers of lithium, although their reserves are much smaller than Bolivia's.
"There is already a lithium rush in the world and Bolivia is not part of the race," says Zuleta.
General Motors, Hyundai and Nissan are just some of the car-makers that plan to launch new hybrid or electric cars in 2012. Zuleta argues that Bolivia is "indispensable to the electric-car market because of the quantity of resources it possesses. In order for the world to have an electric-car era, we need Bolivia."
But it is a three-stage process, and Bolivia is only at the first stage. It has built a $5m processing plant on a remote corner of the Salar where lithium carbonate and potassium chloride – used as an industrial fertiliser – are extracted from solar evaporation ponds on the salt flat.
Bolivia's central bank will put up $500m to fund the industrialisation in 2015 with a view to manufacturing lithium-ion batteries. Only then will the government will accept technical foreign assistance, officials say.
Bolivia has had talks with China, Japan, South Korea, France and Finland about "strategic alliances" for this final stage, says Freddy Beltran, the vice-minister of mines.
Beltran accepts there have been delays, which he blames on red tape. But he says that will not impact on Bolivia's long-term goal of transforming itself from an "exporter of raw materials into [a country] that can industrialise its own resources".
As this mining nation fumbles with the new challenges of soluble minerals (evaporates) like lithium, will it be able to make the transition from exploiting its traditional resources – zinc and tin – towards green, renewable energy? And, in doing so, will it improve the standards of living of millions of Bolivians?
"There is a great deal of poverty in Bolivia and we need a new source of revenue," says Zuleta. A tonne of lithium carbonate sells for around $5,500, and some experts estimate the country's reserves could be worth more than $1tn.
Oil-rich Venezuela and Iran – the Bolivian government's closest ideological allies – may be reluctant to embrace the green energy potential of lithium. But just next door, Latin America's regional superpower, Brazil, is already using ethanol-powered cars. As biofuels compete with food production, Brazil may have to seek new sources of energy to fuel rising car ownership among its burgeoning middle class.
It is a market opportunity that could make Bolivia a green energy superpower, says Zuleta.