Juan Carlos Zuleta Calderón

Lithium Economics

Bolivia: The New Saudi Arabia of the World? A Review of Recent Facts

Jun 30, 2009

In a previous blog, I argued that three conditions needed to be met for Bolivia to become the “New Saudi Arabia of the World”. First, the electric car rush should start along with the launch of GM´s Volt. Second, Bolivia had to begin producing lithium carbonate in a proportion appropriate to the world´s needs. Third, increases in lithium prices should not make the production of other lithium resources (e.g. spodumene) commercially viable.

A recent review of facts gives rise to the following conclusions. First, the electric car rush along with the launch of the Volt is on schedule. Second, given Bolivia´s latest decision to go on its own to develop its lithium resources, it appears that the country has chosen the most difficult route to supply lithium carbonate to the world. And, third, this erratic behavior is in fact encouraging the production of other spodumene lithium resources in other parts of the world.

Under these circumstances, Bolivia seems to start losing sight of its golden opportunity to become the “New Saudi Arabia of the World” while postponing the inauguration of the affordable electric vehicle era in the planet.

Times Article Viewed: 3526

Note.- This is a republication of a blog originally published on EVWorld.com on June 30, 2009.

Bolivia: The New Saudi Arabia of the World?

Lithium Economics

Bolivia: The New Saudi Arabia of the World?

Mar 16, 2009

In recent months there has been a real avalanche of news and comments from the international press about the lithium reserves of the Salar of Uyuni. In this context, Bolivia has been compared with Saudi Arabia in reference to the possibility that the country will become in the next few years a major energy source on earth. However, it is too early to tell whether Bolivia will become the new Saudi Arabia of the world. This depends on at least three factors.

First, the electric car rush must start to begin with. In order for this to happen the launch of GM´s Volt is crucial. It is important to remember that it was precisely GM the first global car maker to announce in January 2007 that by 2010 it would introduce the first mass-produced lithium-powered plug-in hybrid electric cars into the market. This should not diminish the importance of the recent BYD and Chery cars launching in China, pointing only to the magnitude of the US market for one of the world´s most revolutionary technological innovations of the last 100 years.

Second, Bolivia has to start producing lithium carbonate in a proportion appropriate to the world´s needs. This, of course, is not an easy task considering both the country´s lack of experience in producing the metal and the government´s decision not to allow any foreign assistance or investment in this endeavor.

Third, increases in lithium prices (emerging perhaps from an early temporary supply crunch) should not make the production of other lithium resources (e.g. spodumene) commercially viable.

* Economist, Lithium Economics Analyst based in Bolivia, jczuleta@gmail.com

Times Article Viewed: 3266

Note.- This a republication of a blog originally published on EVWorld.com on March 16, 2009.

The Advent of the Lithium Era in Bolivia

Lithium Economics

The Advent of the Lithium Era in Bolivia

Apr 05, 2008

Juan Carlos Zuleta Calderón *

Last Tuesday, Evo Morales, President of Bolivia, announced the construction of a small pilot plant to produce lithium carbonate at the delta of Rio Grande in Uyuni, where it is believed are laying the richest brines of lithium of the world, thereby inaugurating the lithium era in Bolivia. As is well known, with its 5,4 million tons of lithium (metal equivalent), Bolivia holds around 50% of world reserves of the lightest and most electro-negative metal of the planet.

The small pilot plant will cost 5.7 million US dollars. As President Morales indicated, this is only the first phase of a larger project aimed also at industrializing all the non-metal resources (e.g. boron, potassium, magnesium, and sodium) of the Uyuni Salt Lake in the Department of Potosi, which has been estimated to cost 150 million US dollars, an amount that at present the Bolivian State is willing to invest since its return is granted and this will ensure that Potosi becomes once again the center of the country´s economy.

This announcement leaves aside, at least for the time being, any other supposition that the political situation of the country could jeopardize the provision of lithium to the world in times of an escalating demand for the resource resulting to a great extent from an apparently irreversible transition of the global automobile industry to electric propulsion.

* Economist, jczuleta @gmail.com

Times Article Viewed: 3938

Note.- This is a republication of a blog originally published on EVWorld.com on April 05, 2008.

The Obama Audit Task Force and the Volt

Lithium Economics

The Obama Audit Task Force and the Volt

Apr 18, 2009

In several articles published over the last year and a half or so both in Bolivia and the United States I have advocated GM‘s Volt as a technological innovation that would revolutionize the global car industry. So, on March 30 2009 I was astonished by the main conclusion of the Obama Audit Task Force (OATF) regarding the Volt:

“GM is at least one generation behind Toyota on advanced, “green” powertrain development. In an attempt to leapfrog Toyota, GM has devoted significant resources to the Chevy Volt.”

This conclusion only reflects the OATF´s failure to understand what advanced “green” car technology really means.

In a recent blog I have argued that by relying on (obsolete but still commercially viable) nickel-metal hydride batteries for their conventional hybrids, both Toyota and Honda have been following a similar but rather cautious and conservative approach to a lithium-based transition to electric propulsion in the global car industry.

This entirely rational behavior not only comes down to a different business strategy than that of their main competitor: General Motors (GM); it also implies their lagging behind GM insofar as electric automobile technology.

In fact, while conventional hybrids have played a big role in raising driver´s consciousness over the last ten years or so, everybody now agrees that Plug-in Hybrid Electric Vehicles (PHEVs), Range Extended Electric Vehicles (REEVs) and Battery Electric Vehicles (BEVs) are the obvious steps forward. Something all these new EV technologies share in common is their dependence on lithium.

Both Toyota and Honda know that for sure; that is precisely why they are now investing a great deal in lithium. But given the critical situation of the American motor giant, it simply does not (and did not) make any sense for them to become GM´s technology followers or even leapfroggers.

Had they decided to become followers or leapfroggers of GM, they would have had to lose part of what they seem to value the most nowadays: their reputation. One just needs to remember that at the time GM made its Volt announcement, it was already facing severe financial problems and Toyota and Honda were still the second and third largest automakers of the world (As of today, Toyota is first and Honda remains third).

It was then probably wise for Toyota to stick – at least for the time being - with its much proven and praised Prius technology and let other car makers undergo the painful “trial and error” process of the new way of doing things. One must keep in mind also, that to leapfrog GM, Toyota first would have had to kill the Prius.

In a similar vein, it also made sense for Honda to be inclined towards a two-step approach to electrification: first, emulate the know-how (i.e. the Prius technology) advanced by a much more respected firm (Toyota) than GM and, second, come up with something revolutionary, something beyond lithium; the hydrogen-powered FCX Clarity model, for instance.

Of course one should not be surprised if, also as part of their business strategy, sometime down the line both Toyota and Honda introduce some sort of lithium-powered electric cars into the market. As I have recently commented on Seeking Alpha, however, this may occur only at the expense of a technological lag.

Hence the OATF in its recent March 2009 report did not appear to have a clue in terms of what advanced “green” car technology really means. Perhaps some consumers in the US and the UK government could have provided the Task Force with some valuable hints in this regard.

Times Article Viewed: 4608

Note.- This is a republication of a blog originally published on EV World on April 18, 2009.

Why Toyota and Honda Dislike Lithium?