Lithium Bonanza in Bolivia

The New York Times has a story that must have mining companies’ mouths watering: the world’s largest reserves of lithium — a key ingredient in batteries that could power hybrid cars — lie beneath a salt flat in a remote corner of Bolivia, whose current president is Evo Morales, a leftist pal of Venezuela’s Hugo Chavez, who is bound and determined to make sure Bolivians are the primary beneficiaries of all this metal. I was counting the paragraphs till somebody denounced evil imperialists, and I wasn’t disappointed:

"The previous imperialist model of exploitation of our natural resources will never be repeated in Bolivia,” said Saúl Villegas, head of evaporates, 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.”

Uh, Saúl, no matter what you do, if you mine the lithium, you’re going to have to sell it to somebody else. The lesson of history is that attempting to gore the capitalist pig just encourages said pig to feed at somebody else’s trough.

The story summarizes all the issues at stake between economically poor countries that are resource rich and would like to become economically prosperous without having to cut deals that let somebody else rake in all the profits. Could Bolivia become a model for building an industry that makes the nation and its people wealthier? Perhaps, but the fact that people making empty denunciations of imperialism are running things makes me skeptical.

(Nice thing from Caterpillar’s (CAT) perspective: no matter who does the digging, they’re gonna need shovels).

Comments

[yellowhoard]

I bet all of the big mining companies are ready to invest billions in a country that will likely steal their investment. HAHAHAHAHAHAHAHAHAHA!

2009 Feb 03 05:34 AM

[Gravity404]

"Could Bolivia become a model for building an industry that makes the nation and its people wealthier?"

NO.

I've been to Bolivia, and even its remote parts. The Incas would be more capable of mining lithium than that backwardass, 18th centrury country.There is a reason Bolivia is one of the poorrest countries in the world. -- Evo will suceed at making himself wealthier and the country poorer.

Therefore SQM is a safe bet. Pick it up under $20

2009 Feb 03 09:00 AM

[Steve Ward]

There is nothing wrong with a government trying to get the best deal for its people. Trouble is that with countries like Russia, Venezuela and Bolivia, they like to change the rules at a whim when market conditions favor.

When it comes to Bolivia, the Brazilians, Argentines and the Spanish are the big losers here. It's there problem and it won't be ours because no major American corporation will invest.

Evo is a typical politician in many ways. He will, like Chavez, embrace any photo op with Brazil's President Lula, then turn on Brazil's private investments in Bolivia and confiscate them.
Lula is no longer amused, hence the recent military build up plans by Brazil.
Brazil is now the Capatalist Pig of South America after getting invested properties confiscated by Ecuador, Bolivia and contract changes in Venezuela.
The US is no longer alone. welcome to our end of the world Brazil.

2009 Feb 03 11:53 AM

[Jingle-Jangle]

Reminds me of current liberals in our country. Laws mean nothing to them. Laws are for the little people not the Democrat politicians. Watch your back.


On Feb 03 11:53 AM User 213076 wrote:

> There is nothing wrong with a government trying to get the best deal
> for its people. Trouble is that with countries like Russia, Venezuela
> and Bolivia, they like to change the rules at a whim when market
> conditions favor.
>
> When it comes to Bolivia, the Brazilians, Argentines and the Spanish
> are the big losers here. It's there problem and it won't be ours
> because no major American corporation will invest.
>
> Evo is a typical politician in many ways. He will, like Chavez, embrace
> any photo op with Brazil's President Lula, then turn on Brazil's
> private investments in Bolivia and confiscate them.
> Lula is no longer amused, hence the recent military build up plans
> by Brazil.
> Brazil is now the Capatalist Pig of South America after getting invested
> properties confiscated by Ecuador, Bolivia and contract changes in
> Venezuela.
> The US is no longer alone. welcome to our end of the world Brazil.

2009 Feb 03 01:04 PM

[7 years ex-pat residency in...]

If there was another trough big business could feed on then the 73 million tonnes (metric tons) of Lithium Carbonate that Bolivia has would be immaterial, however there simply isn't (news.bbc.co.uk/2/hi/bu...).

At some stage US & other carmakers are definitely going to have to front up to Bolivia for their lithium batteries. Europe seems to be a little more realistically fostering relations rather than the apparent US alienation of the current Bolivian govt by attempted subversive means.

OK ambassador Goldberg & the DEA were recently expelled but the US is just going to have to get over losing control of the country thru' their puppet Presidents - the last of which was the murderous Gonzalo Lozada.

Let's face it - the track record of US sponsored Bolivian Presidents is dismal (www.huppi.com/kangaroo... "1971 Bolivia — after half a decade of CIA-inspired political turmoil, a CIA-backed military coup overthrows the leftist President Juan Torres. In the next two years, dictator Hugo Banzer will have over 2,000 political opponents arrested without trial, then tortured, raped and executed") including the use of tanks against unarmed men, women & children protestors, using US-paid-for helicopter gunships against students or more recently in 2000 selling water rights to US corporation Bechtel who then tried to charge Cochabamba people up to 1/3 of their pitiful income for water supply.

Bolivia is undoubtedly one of the 10 poorest countries in the world but at least they are now getting a fair shake thru’ 50% taxes on profits of multi-national oil companies producing the 2nd to largest gas reserves in S. America (after Venezuela).

Although Evo Morale’s presidency meant the end of my job in Bolivia he has undoubtedly done great things for his terrifically needy country such as superannuation for oldies, a highly successful literacy campaign & redistribution of unused land to impoverished landless farmers.

We need to get our own house in order before criticizing one of the 10 poorest countries in the world as after almost 2 years in office the MAS party Bolivian govt has a surplus of $4 billion (after 13 prior years of balance of payment deficits). This compares darn well to the quadrillion dollar US deficit that’s looming with the massive transfer of US govt money to rapacious big business; even if the Fed’s Bernanke can hold off dropping cash $’s from helicopters…lol!

2009 Feb 03 09:57 PM

[HALFTRACK]

AH! THOSE PERSONS WHO DON'T CHECK OTHER SOUCES LIKE - CHILE AND THEIR SALT FLATS WHICH HAS LITHIUM ! THE SOURCES SAY IT LOOKS LIKE A TRUE SALT FLAT ALL WHITE !! ITS BEEN THERE FOR YEARS TO SHALLOW MINE!!

2009 Feb 03 11:08 PM

[Kushmir Intuchis]

On Feb 03 09:57 PM 7 years ex-pat residency in Bolivia wrote:

> If there was another trough big business could feed on then the 73
> million tonnes (metric tons) of Lithium Carbonate that Bolivia has
> would be immaterial, however there simply isn't (news.bbc.co.uk/2/hi/bu...).

The solution then is not Lithium-ion batteries, but some other type, such as Nickel metal hydride or other developing battery technologies.

2009 Feb 03 11:44 PM

[Paul Martin]

Nickel is double the weight of lithium, thats why there is so much interest in lithium within this sector. Its the lightest metal element, which has profound advantages in efficiency (power to weight).




On Feb 03 11:44 PM Kushmir Intuchis wrote:

>
> On Feb 03 09:57 PM 7 years ex-pat residency in Bolivia wrote:

>

2009 Feb 04 04:36 AM

[Mad Hedge Fund Trader]

Politicians, industrialists, and environmentalists who see battery powered vehicles as the wave of the future are overlooking the fact that 50% of the world supply of lithium comes from impoverished, landlocked Bolivia. This is a country that until now was best known for killing off famous foreigners (Che Guevara, Butch Cassidy and the Sundance Kid), and being the source of a new form a venereal disease. Lithium ion batteries are four times more efficient than the current generation of nickel cadmium batteries, and are essential for electric cars to finally become economically viable. But now that the country finally has something the world wants, nationalism is rearing its ugly head. Local politicians see their country as the Saudi Arabia of the highly corrosive, toxic, reactive metal, and are already discussing ways to restrict access. The only other supplies are to be found in Chile, Argentina, Australia, China, and Nevada. Should the US invade to insure supplies? Iraq worked didn’t it? The best way for opportunistic investors to play this is to buy Sociedad Quimica Y Minera (SQM), Peru’s largest producer of lithium.

2009 Feb 21 09:23 AM