Can socialism and salt drive us into future?

Published Date: 04 February 2009
By Simon Romero
in Uyuni, Bolivia

IN THE rush to build the next generation of hybrid or electric cars, a sobering fact confronts both vehicle makers and governments seeking to lower their reliance on oil: almost half of the world's lithium, the mineral needed to power the vehicles, is found in Bolivia – a country that may not be willing to surrender it easily.
Japanese and European companies are busily trying to strike deals to tap the resource, but a nationalist sentiment about the lithium is building quickly in the government of President Evo Morales, a socialist who has already nationalised Bolivia's oil and natural gas industries.For now, his government talks of closely controlling the lithium and keeping foreigners at bay. Adding to the pressure, indigenous groups in the remote salt desert where the mineral lies are pushing for a share in the eventual bounty."We know Bolivia can become the Saudi Arabia of lithium," said Francisco Quisbert, the leader of Frutcas, a group of salt gatherers and farmers on the edge of Salar de Uyuni, the world's largest salt flat. "We are poor, but we are not stupid peasants. The lithium may be Bolivia's, but it is also our property."One of the provisions of a new constitution Mr Morales managed to pass last month could give Indians control over the natural resources in their territory, strengthening their ability to win concessions from the authorities and private companies, or even block mining projects.None of this is dampening the efforts of foreigners, including the Japanese conglomerates Mitsubishi and Sumitomo and a group led by the French industrialist Vincent Bollore. In recent months, all three have sent representatives to La Paz, Bolivia's capital, to talk to the government about gaining access to the lithium, a critical component for the batteries that power cars and other electronics."There are salt lakes in Chile and Argentina, and a promising lithium deposit in Tibet, but the prize is clearly in Bolivia," Oji Baba, a Mitsubishi executive, said in La Paz. "If we want to be a force in the next wave of automobiles and the batteries that power them, then we must be here."Lithium has long been used in small amounts in mood-stabilising drugs and thermonuclear weapons, but demand has grown with its use in batteries for BlackBerrys and other electronic devices. However, the motor industry holds the biggest untapped potential, analysts say. Since lithium weighs less than nickel, which is also used in batteries, it would allow electric cars to store more energy and be driven longer distances.With governments seeking to increase fuel efficiency and reduce their dependence on imported oil, private companies are focusing their attention on this desolate corner of the Andes, where Quechua-speaking Indians subsist on the remains of an ancient inland sea by bartering the salt they carry out on llama caravans.The US Geological Survey says 5.4 million tons of lithium could potentially be extracted in Bolivia, with three million tons in Chile, 1.1 million in China and just 410,000 in the United States. Independent geologists estimate that Bolivia might have even more lithium at Uyuni and its other salt deserts, though high altitudes and the quality of the reserves could make access to the mineral difficult.While estimates vary widely, some geologists say electric-car makers could draw on Bolivia's lithium deposits for decades to come.But amid such potential, foreigners seeking to tap Bolivia's lithium deposits must navigate the policies of Mr Morales, 49, who has clashed repeatedly with United States, European and even South American investors.The president shocked neighbouring Brazil, with whom he is on friendly terms, by nationalising that country's natural gas projects in 2006 and seeking a sharp rise in prices. He carried out his latest nationalisation before the vote on the constitution, sending soldiers to occupy the operations of British oil giant BP.At the La Paz headquarters of Comibol, the state agency that oversees mining projects, Mr Morales' vision of combining socialism with advocacy for Bolivia's Indians is prominently on display. Copies of Cambio, a new state-controlled daily newspaper, are available in the lobby, while posters of Che Guevara, the socialist icon killed in Bolivia in 1967, appear at the entrance to Comibol's offices.Saul Villegas, head of a Comibol unit that oversees lithium extraction, said: "The previous imperialist model of exploitation of our natural resources will never be repeated. Maybe there could be the possibility of foreigners as minority partners, or better yet, as our clients."To that end, Comibol is investing about £4 million in a small plant near the village of Rio Grande on the edge of Salar de Uyuni, where it hopes to begin Bolivia's first industrial-scale effort to mine lithium from the white landscape and process it into carbonate for batteries.Technicians first need to get a brine – water saturated with salt that is found deep beneath the salt desert – to the surface, where it is evaporated in pools to expose the lithium. Mr Morales wants the plant finished by the end of this year.Marcelo Castro, 48, who is in charge of the project, explained the plant had another objective. "Of course, lithium is the mineral that will lead us to the post-petroleum era," he said. "But in order to go down that road, we must raise the revolutionary consciousness of our people, starting on the floor of this very factory."Lithium analysts say Bolivia, one of Latin America's least developed nations, needs to invest much more to start producing carbonate. But with economic growth slowing and a decline in oil prices limiting the reach of its top patron, Venezuela, it remains unclear how Bolivia can achieve this on its own.However, optimistic industry analysts point out that Mr Morales has allowed some foreign companies to remain in the country as minority partners.On the flat salt desert of Uyuni, such debate seems remote to those scraping salt off the ground into the cone-shaped piles that line the horizon like some geometric mirage. "I've heard of the lithium, but I only hope it creates work for us," said Pedro Camata, 19, his face shielded from the unforgiving sun by a ski mask and cheap sunglasses covering his eyes. "Without work out here, one is dead."WHAT NEXTLITHIUM is an alkali metal with a silver-white colour – known to generations of British schoolchildren from chemistry experiments which demonstrated its highly reactive properties.Vehicle manufacturers across the world are intending to use lithium-ion batteries to provide the power source for the next generation of commercially produced electric cars.Lighter than other battery designs, lithium-ion batteries, also lose less of their energy over time – called "self discharge".Early this year, General Motors announced it was building the first lithium-ion battery pack manufacturing base operated by a major car maker in the US.It is intended the factory will produce batteries for GM's Volt model, due for launch in 2011, and have a ten-year lifespan in the vehicles.Hyundai, Toyota and Tata Motors are also developing the technology for use in their own models.