Will the Lithium Pilot Project Be Able to Honor its Debt to the Central Bank?
Nov 03, 2012
It seems like problems continue at the lithium pilot project plant in Bolivia. In a recent interview, the head of the endeavour said that he has not been able to produce one single ounce of anything but he is already paying a debt to the Central Bank.
Recent statements by the national manager of evaporite resources (NMER) on Radio Panamericana in La Paz, Bolivia on the status of the pilot project have really left me stunned.
It now turns out that the workers can´t organize their union because they have fixed-term contracts due to the preparatory nature of their work. The question is: what preparatory work is the NMER referring to if in one part of his statement he argues that the potash plant was launched in August with the presence of the President and in another he says that the lithium carbonate plant is in mounting process?
If, indeed, the first plant started, then it should have generated recurring activities that require the participation of permanent workers. Also, if the second plant is in the assembly process, possibly what is required is not workers but highly qualified technical personnel. Anyway, all this leads us to ask: what are the 100 workers not allowed to organize their union at Llipi Llipi doing? And what's worse: Why is there so much fear of union?
The NMER first indicates that the pilot plant is not producing a single ounce of anything and then complains that it is paying interest to the central bank "for a contract that has been done." All this is astonishing, to say the least.
First, if the pilot plant is not producing anything, then what happened to the potash plant? Was it really launched or was everything just a show in which the President of the Plurinational State participated?
Second, the manager´s complaint about a contract he himself subscribed to is completely out of place. If he did not agree with it, why did he sign it? In principle, it seems to make no sense that the evaporite manager had borrowed financial resources (at a given interest rate) from the Central Bank to carry out experimental and pilot work when he did not even clearly define the extraction process he would use.
Moreover, I have the impression that this time the manager exaggerated: He promised goals he may not be able to meet and is now about to mourn over spilled milk. But he was not the only unwise one; the Central Bank did not take the necessary precautions before approving the loan because the Llipi Llipi pilot project was not subject to credit. Why? Well, because the endeavour had no reliable source of income on the horizon. Everything was based on mere conjecture. The time of reckoning arrived and now all that remains is for the State to pay the debt.
As this situation was predictable, in a recent article I wondered if the loans made by the Central Bank to YPFB, COMIBOL and other public entities will not have an impact on the level of net international reserves (NIR). To bad about the woes of the people of Bolivia, it seems that I was not wrong in this either.
|<< PREVIOUS||NEXT >>|
blog comments powered by Disqus