Wednesday, October 6, 2010

Baker Institute studies Bolivia's lithium potential

A couple years ago, Bolivia was described by some as “the Saudi Arabia of lithium” in reference to an evolving market for batteries for future electric vehicles. A recent study by Rice University’s Baker Institute on Public Policy notes questions linger about Bolivia’s possible role in the lithium industry.

“The supply picture is quite complex, not only globally, but specifically in Bolivia,” said David Mares, Baker Institute scholar for Latin American Energy Studies and a political science professor at the University of California, San Diego.

“There are multiple issues that have to be resolved before Bolivian production, still 10 to 15 years down the road by some estimates, could enter the market, particularly given the quality of Bolivian lithium, the country’s lack of infrastructure, and an unstable political environment,” he said.

Unlike oil and gas markets, lithium is not consumed as it works in batteries. The battery industry likely will be able to recycle the lithium once a battery dies, although Mares estimates the lithium recycling infrastructure is 5-10 years away from being commercially available.

Bolivia has no lithium extraction and processing industry so it would have to partner with others or develop indigenous technology, the Baker Institute researcher noted. Potential international investors might include oil and gas companies.

“The government has invited Japan Oil, Gas & Metals Corp., Mitsubishi, and Sumitomo from Japan; LG Chem Ltd. and Korea Resources Corp. from Korea; Brazil’s Ministry of Science and Technology; and France’s Eramet SA and Bollore” to advise Bolivia about lithium projects, Mares said.

Bolivia’s participation as a lithium supplier will be interesting to watch unfold. As Mares notes, “The government is already committed to a $1 billion investment plan in hydrocarbons to pick up the slack caused by natural gas policies that are seen as unfriendly to private investment.”

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