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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
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