Lithium Economics

Lithium Market: An Update

Apr 05, 2012

In a recent report Fundacion Milenio from La Paz, Bolivia provides a current view of the lithium market.


(LA PAZ, BOLIVIA)  With the advent of new technologies for their recovery in the 70s, the lithium resources found in Salar de Uyuni, Bolivia attracted growing expectations.  To many, the lithium treasure still represents the future development of the country. Hence its exploitation has been taken as a high-level political promise that tests the ability to manage the country and illustrates the efficacy of public policy models in relation to natural resources. 

Missed deadlines

According to official figures, beginning mid-November 2009 the pilot project of industrialization of lithium in the Salar de Uyuni should have started to produce 40MT per month of lithium carbonate and 150MT per month of potassium derivatives. It has been over 2 years and 4 months since then, and the greatest strategic endeavor of all times in the country has been characterized by continual postponements and delays. Recently, the national manager of evaporite resources confirmed a further delay. According to recent statements to ABI, a governmental news agency, Bolivia will now have to wait until May 2012 for potassium chloride and until June or July 2012 for lithium carbonate.

The "Bolivian model" to process the brines of the Salar de Uyuni

As argued by lithium expert Juan Carlos Zuleta in an article published on in early January of this year, after recognition by the pilot project of the limitations of mining technologies based on solar evaporation systems – to become obsolete – Bolivia would have begun to open up the possibility of using chemicals and natural gas for lithium exploitation at Salar de Uyuni. In this contribution, Zuleta said that "it appears that from now on 'the Bolivian process', defended by tooth and nail by the pilot project until recently, is not nothing but a false story - indeed somewhat expensive for the State."

Moreover, due to recent heavy rains in the area of
??the Salar de Uyuni, the project would have faced further flooding in the solar evaporation ponds and the pilot plant, causing high costs to the Bolivian State. It is hoped that some state oversight entity be monitoring these issues and determining responsibilities. We could not confirm if the Comptroller is aware but we know that a lone senator from Potosi faces insurmountable barriers that prevent her from performing the tasks of control that allows and obliges the Constitution.

Zuleta also said that the "the unfounded ideas in relation to the preliminary nature of the Korean research, almost vociferated against me at the meeting of experts on lithium in November 2010 in Santiago de Chile by the head of the pilot plant, were left behind" .

In this regard, the Bolivian people should be informed that the official in question would not only have begun to change his perception in relation to the Korean research but a few weeks ago he traveled to South Korea to attend an explanatory meeting at a POSCO facility, one of the two Korean strategic partners of Bolivia. It is worth asking whether under these circumstances it will still be possible to insist on a strategy of industrialization of lithium with 100% state participation.

The state of competition


In recent months there has been significant advances in two new projects: Rincon and Olaroz. The first would be very close to fully enter the market and the second would have projected to enter the market by the end of this year. Other projects would be delayed by problems arising from lack of operating permits from the authorities of Salta and Jujuy and the opposition by some local communities because of the potential environmental impacts that could result.


In 2011 this country showed a significant increase in processing of lithium ore deposits (extracted by the company Galaxy in Australia) and lithium from brines (from several operations located in Tibet). This explains the important growth in global lithium production in 2011.


Last year, Australian company Talison displaced SQM of Chile as a leading producer of lithium in the world.


The production of SQM and Chemetall, the only lithium producers in Chile, has shown a minimal increase since 2006 due to two reasons: legal restrictions to enlarge the areas of operation and apparent lack of water for brine processing. In this regard, during the last days the Chilean government has announced the launch of an invitation to the signing of special operating contracts lithium (Ceol). Meanwhile, U.S. company Li3 Energy Inc., also a strategic partner of South Korea's POSCO, has reported on the implementation of a new technology for extraction of lithium in the Salar de Maricunga, which has the virtue of saving fresh water consumption in brine treatment.
World production of lithium carbonate in 2011

According to the United States Geological Survey, the production of lithium carbonate equivalent (CLE) reached over 180,000 metric tons in 2011, representing an increase of over 21% compared to 2010. These data contrast with the information provided by the national manager of evaporate resources to ABI during his interview on March 18, 2012 in which he first states that "the market is of 100 thousand tons," while in fact it is 180 thousand tons and then argues that "the lithium market is stagnant”, while it actually grew in the last two years at an average rate of 35%.

Demand for electric vehicles with lithium batteries

It continued to grow in February 2012 but at a relatively slow rate with respect to previous forecasts. However, this may change in coming months following the entry of new lithium-based electric vehicles to the market, and in line with expectations around the discovery of a new battery with potential for an energy density of 400 Wh / kg, i.e. slightly more than twice that obtained by the most advanced lithium-ion batteries to date, and priced at $ 180 per kWh, which is substantially lower than the current market price.


Bolivia has lost four valuable years in the process of lithium experimentation. The people responsible for the lithium pilot plant during that time decided to bet on development of a technology based on solar evaporation as the world begins to move towards alternative technologies. Nonetheless, the country has still a chance to compete in the market and even place itself in a position of leadership, which is essential for the government to show a real commitment to turn Bolivia into the energy center of the world, beating the heavily ideological discourse and assuming more pragmatic challenges.

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