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Boliv ia’s Lithium Reserv es

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In Bolivia, Untapped Bounty Meets Nationalism

Noah Friedman-Rudov sky f or The New York Times

Underneath the salt f lats in Uyuni, Bolivia, lie the w orld's largest lithium reserves. More Photos >By SIMON ROMEROPublished: February 2, 2009

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

Japanese and European companiesare busily trying to strike deals to tapthe resource, but a nationalistsentiment about the lithium is building quickly in thegovernment of President Evo Morales, an ardent critic ofthe United States who has already nationalized Bolivia’s oiland natural gas industries.

For now, the government talks of closely controlling thelithium and keeping foreigners at bay. Adding to thepressure, indigenous groups here in the remote salt desertwhere the mineral lies are pushing for a share in theeventual bounty.

“We know that Bolivia can become the Saudi Arabia oflithium,” said Francisco Quisbert, 64, the leader of Frutcas,a group of salt gatherers and quinoa farmers on the edge ofSalar de Uyuni the world’s largest salt flat “We are poor

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5/3/2009 In Bolivia, Untapped Bounty Meets Na…

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Noah Friedman-Rudov sky f or The New YorkTimes

Residents of Uyuni, Bolivia, havesurvived for generations by collectingsalt and selling it across the country.More Photos »

Salar de Uyuni, the world’s largest salt flat. “We are poor,but we are not stupid peasants. The lithium may beBolivia’s, but it is also our property.”

The new Constitution that Mr. Morales managed to gethandily passed by voters last month bolstered such claims.One provision could give Indians control over the naturalresources in their territory, strengthening their ability towin concessions from the authorities and privatecompanies, or even block mining projects.

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

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

Mitsubishi is not alone in planning to produce cars using lithium-ion batteries. Ailingautomakers in the United States are pinning their hopes on lithium. One of them isGeneral Motors, which next year plans to roll out its Volt, a car using a lithium-ionbattery along with a gas engine. Nissan, Ford and BMW, among other carmakers, havesimilar projects.

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

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

The United States Geological Survey says 5.4 million tons of lithium could potentially beextracted in Bolivia, compared with 3 million in Chile, 1.1 million in China and just410,000 in the United States. Independent geologists estimate that Bolivia might haveeven more lithium at Uyuni and its other salt deserts, though high altitudes and thequality of the reserves could make access to the mineral difficult.

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

But amid such potential, foreigners seeking to tap Bolivia’s lithium reserves must navigatethe policies of Mr. Morales, 49, who has clashed repeatedly with American, European andeven South American investors.

Mr. Morales shocked neighboring Brazil, with whom he is on friendly terms, bynationalizing that country’s natural gas projects here in 2006 and seeking a sharp rise inprices. He carried out his latest nationalization before the vote on the Constitution, sendingsoldiers to occupy the operations of the 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

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prominently on display. Copies of Cambio, a new state-controlled daily newspaper, areavailable in the lobby, while posters of Che Guevara, the leftist icon killed in Bolivia in1967, appear at the entrance to Comibol’s offices.

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

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Past CoverageIn Boliv ia, Untapped Bounty Meets Nationalism (February 3 , 2009)LETTER FROM THE AMERICAS; Griev ances That Can Bring Globalization to Grief (Nov ember 5,2003)Dangerous Decline Reported in South American Flamingos (May 6, 1 997 )For U.S. Miners, the Rush Is On to Latin America (April 1 7 , 1 994)

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