Juan Carlos Zuleta Calderón

Lithium Economics

Delays and possible conflict of interests cloud the lithium pilot project in Bolivia *

Apr 23, 2010

After about two years since the launch of the lithium pilot project in Bolivia, unexplained delays and possible conflict of interests seem to overshadow any significant results

As we approach the launch date of the first all-electric car "Leaf" of Nissan and the first range-extended hybrid electric vehicle "Volt" of General Motors, South Korea says it will invest several million dollars in a project aimed at extracting lithium from seawater and Toyota, the largest automaker in the world, reports that it will launch the first hybrid electric vehicle with lithium-ion batteries on the market next year, some doubts are beginning to appear as to whether Bolivia, which holds more than half the world's lithium resources, may one day lead the small group of countries producing the coveted “gray“ metal.

These reservations, which, given the tense moments we just faced in the southwest of Potosi could be thought of as political and, therefore, dismissed upfront by the government, are, however, supported by the following facts.

First, after about two years of the announcement by President Morales to start a pilot project beginning this year to produce 40 metric tons (MT) per month of lithium carbonate, to proceed in some years to sell between 20,000 and 30,000 TM of the chemical, progress has been reduced to the construction of part of the civil works of the pilot plant in the region of Rio Grande, as well as obtaining a few kilos of lithium carbonate with 99.5% of purity at an experimental level in laboratories outside the project. While no one has an exact idea of the reasons for the delay, it has been said that the first tons of lithium carbonate may be produced by September of this year, or more realistically not until next year. As I argued in previous publications, at an early stage of industrialization of the Salar de Uyuni, the country should start producing lithium carbonate as soon as possible primarily to: (i) signal the world that it will provide the required volumes of the metal to the market, since creating a situation of credibility is key for the largest investors in advanced energy storage systems to continue to bet on lithium, (ii) contribute to reducing the cost of lithium ion batteries, providing mass access to consumers of the new electric vehicles, (iii) postpone the development of alternative technologies (hydrogen fuel cells and / or methanol, zinc-air batteries, bio-electrochemical batteries, etc.) or extraction projects of lithium from ore deposits (spodumene) or seawater, and (iv) positioning a firm foothold in the market for lithium, given the current metal fever mainly in Argentina, which practically is conducting the auction of whichever salt lake or lagoon can be found in that territory.

In this sense, the Bolivian people need to know the specific destination of the financial resources allocated to the pilot project for the industrialization of lithium in the Salar de Uyuni. Hence the national government should request as soon as possible an intervention by the State´s Comptroller General to proceed to a financial audit of the money spent and, more importantly, a technical and operational audit of progress to date in the project.

Second, given the information from "El Potosí" in its issue of April 20 this year that Tierra SA Company would be “after the lithium of southwestern Potosi”, it is crucial the intervention of the Ministry of Institutional Transparency and Combating Corruption to investigate a possible conflict of interest, given the fact that the pilot project has been led since its launch by former employees of that company under the (ongoing) guidance of Mr. Guillermo Roelants du Vivier, current CEO of Tierra SA, in his capacity as Secretary-General of Bolivia´s Scientific Committee of Evaporite Resources Research. In this regard, the Comptroller General should find out, for example, if the delay of the project had anything to do with the debate held in recent months in "La Razon" between Mr. Roelants (seconded by the Sales and Financial Manager of the pilot project) and this author, as to whether lithium is secondary and potassium primary in the industrialization strategy of the Salar de Uyuni.

Remember that in a special supplement published by "Energy Press" late last year, Mr. Roelants argued, inter alia, that "lithium has been made fashionable by the action of the global crisis and the effect of "mass media" "and that potassium is more important than lithium because it is demanded in agriculture, photography, and lithography, medicine, soaps, explosives, and fireworks". In addition, he noted that the "media predicament" over lithium would have only "intensified the imagination" of those who search for natural resources that supplant oil, pointing out that lithium is not a fuel but a constituent of the batteries, just as lead is for the batteries currently available for the automotive market".

Given the information provided by "El Potosí", it is worth asking now whether Mr. Roelants´ disconcerting opinion on the relative importance of lithium of the Salar de Uyuni is related to the fact that Tierra SA Company, apparently through one of its main partners, Carmen Rosa Burgos Ortiz, was granted, as shown in a planimetry certificate dated March 12, 2010, issued by the National Service of Geology and Mining (sent in PDF format to El Potosi by this author) a total of 1,975 hectares of mining and water concessions (for the property) located in the heart of the Salar of Pastos Grandes, known as a site with great potential for lithium? Does it make sense that Mr. Roelants continue serving as Secretary-General of the "Scientific Committee" mentioned above when he is striving to postpone the exploitation of lithium in the Salar de Uyuni, deliberately favoring potassium, an element with an infinitely inferior value chain, with enormous economic implications for Bolivia? What are the reasons for the national government to tolerate this situation?

* A previous version of this article was published in Spanish in “El Potosi” on April 23, 2010

Times Article Viewed: 25555

Note.- This is a republication of a blog originally published on EVWorld.com on April 23, 2010.

What is Behind Korea´s Interest in Extracting Lithium from Seawater?

Lithium Economics

What is behind Korea´s interest in extracting lithium from seawater?

Apr 10, 2010

South Korea´s recent decision to extract lithium from seawater may be justified by specific economic reasons.

As recently reported by the Financial Times, South Korea's intention to commercially extract lithium from seawater by 2015 only underscores the increasing intensity of the lithium rush in the global lithium-ion battery industry.

That Korea is interested in investing in alternative sources of lithium should not surprise anyone at all. As is well known, LG, one of Korea´s largest companies, is known to possess one of the most competitive Li-ion battery technologies in the world which will be carried by General Motors´ Volt to be launched later this year. There is, though, another latest event that signals the Korean interest. It has to do with Hyundai´s announcement that by the end of the year it will launch the first hybrid car with Li-polymer batteries.

On the one hand, as both GM and Nissan approach the launching date of their Volt and Leaf cars, the electric vehicle market is beginning to take shape On the other, Hyundai´s announcement confirms my original argument that if Li-ion batteries are to be used quite soon in plug-ins and both range-extende d and battery EVs, then why not utilize the m for conventional hybrids as well?

Both pieces of information also come precisely when China just announced that it may cut its Li and rare earth exports.

I wonder what implications, if any, these moves will have on the future of the lithium market in general and on the Bolivian prospects to export its lithium in particular.

Times Article Viewed: 9249

Note.- This is a republication of a blog originally published on EVWorld.com on April 10, 2010.

US Consumers Begin to Favor Electric Cars

Lithium Economics

US consumers begin to favor electric cars

Mar 02, 2010

A recent automotive survey provides additional evidence for the arrival of the lithium era in the world.

In a paper presented at the Second Lithium Supply and Markets Conference held in Las Vegas last January, I further developed a framework originally suggested in a 2008 article to explain the main factors (i.e. oil prices, technological development and resistance to change) that may determine the adoption of lithium batteries for different types of electric cars.

For reasons of space, the third determinant was then examined in relation to governments and companies only. Here I would like to start a discussion about acceptance of/resistance to change by consumers. This is now possible thanks to some interesting information provided by Ernst & Young in its first Automotive Survey measuring the understanding of and interest in plug-in hybrid and electric vehicles in the US published in December 2009. As argued by a recent article, the key findings of the Survey are:

· Roughly 10% of the survey participants said they would consider a plug-in hybrid and electric vehicle purchase.

· 34% of survey participants said they would subsidize local charging stations.

· Public awareness of emerging powertrain technologies remains weak across the US.

· Not many consumers are willing to embrace the new technology prior to it is well-established in the market.

· No other plug-in hybrid and electric vehicle incentive or benefit is considered nearly as important as saving money on fuel.

· Among several considerations, access to charging stations, battery driving range, and vehicle cost are by far the three most significant consumer concerns.

Taken as a whole, these findings give additional support to the kind of arguments I have been advancing for the last two years or so with reference to the inauguration of the lithium era in the world.

First, the Survey results point to many more drivers willing to buy plug-in hybrid and electric vehicles than initially thought. In effect, the above-mentioned percentage translates into about 20 million American drivers favoring that kind of acquisition which is, for example, well beyond President Obama´s target to have 1 million such cars on US roads by the year 2015.

Second, this is further reinforced by the Survey result that more than one out of three Americans would subsidize local charging stations.

Third, as anticipated in my January article, not only the price of oil is perceived as one of the most important factors determining the adoption of lithium batteries but it also does seem to do a great deal with drivers ‘decision to purchase a plug-in hybrid and/or electric vehicle.

Fourth, battery driving range and vehicle cost, which appear among the three most significant consumer concerns when it comes to buying electric cars, seem to be intrinsically related to the technological development of lithium batteries for electric cars.

Lastly, lack of public awareness of electric cars may be only increasing consumers’ resistance to adopting the emerging technology before it is well-established in the market.

Times Article Viewed: 5701

Note.- This is a republication of a blog originally published on EVWorld.com on March 02, 2010.

Exide Technologies in the Lithium-ion Energy Systems Market?

Lithium Economics

Exide Technologies in the Lithium-ion Energy Systems Market?

Nov 08, 2009

Exide`s decision leaves us with some unanswered questions as to what is next in terms of the arrival of the Sixth Techno-economic Paradigm in the world.

As a recent report indicates, Exide Technologies has introduced a new division focusing on “development and pursuit of new markets for renewable energy storage and lithium-ion energy systems”.

This comes as a surprise considering that the company is a global leader in the production and recycling of lead-acid batteries. Does this mean that Exide has just discovered that lead-acid and lithium-ion advanced energy storage systems are complements rather than substitutes? Or perhaps, does it imply that the company will begin a gradual retreat from the lead-acid business?

While it is too early to conclude in one or the other direction, Exide´s decision does seem to anticipate a chain of events that may come forward in the near future at the advent of the “Sixth Techno-economic Paradigm“ with lithium as its main factor, as envisioned in a blog I published almost two years ago.

Lastly, as I have argued in another blog, given the growing interest in lithium-ion batteries for different applications, both within and outside the electric car industry, many new products, and services are beginning to appear in a promising market. What remains to be seen is how other companies will react to the new set of factors that are starting to shape the new ”Cleantech” Era.

Times Article Viewed: 7011

Note.- This is a republication of a blog originally published on EVWorld.com on November 08, 2009.

SQM Announces a Reduction in Lithium Prices