Upon his arrival at International Airport of El Alto in La Paz, Bolivia, President Evo Morales declared today at around 9:00 a.m.:
“A Memorandum of Understanding (NASDAQ:MOU) has been signed with Korea for the development of research and technical cooperation on lithium. I want to comment quickly that there is much interest in this research with Korea´s specialists. We had the opportunity to visit some lithium battery plants that produce small and medium-size batteries. We have indeed seen the first car powered by lithium batteries. Korea has much interest in cooperating and investing in lithium, but in this meeting, in this visit, we have only signed a MOU for research and technical cooperation in lithium”.
Hence contrary to many reports from all over the world that Bolivia had agreed with South Korea to start exploiting jointly the largest lithium reserves on earth located at Salar de Uyuni, it does seem that such possibility has suddenly vanished.
Yes, relations between South Korea and Bolivia are at its best moment since 1965. Yes, South Korea has an enormous interest in investing in lithium in Bolivia. Yes, South Korea has even granted Bolivia a $250 million loan at almost no interest for 40 years with a 5-year grace period to finance the construction of four importante bridges to integrate the country.
But, no agreement has been signed yet with South Korea to begin developing and industrializing lithium in Bolivia.
Overall, this might indeed be a wise decision considering the fact that –as I have long argued in many previous contributions – Bolivia has not yet managed to put together a complete strategy to develop and industrialize lithium, a prerequisite to negotiate a contract with potential partners. Time will tell what happens next in a country that still seems to have the key to a rapid transition to electric propulsion in the global automobile industry.
Disclosure: Author is a lithium economics analyst based in La Paz, Bolivia. In January 2010 he participated as an invited speaker at the Lithium Supply & Markets Conference held in Las Vegas, USA. He holds no positions in any stocks.