Lithium Economics

Lithium: Will the Rhetoric of the Bolivian Government Continue?

Aug 02, 2011

Despite the government´s rhetoric, everything seems to indicate that Japanese, South Korean and Chinese would have come to the rescue of the lithium pilot project so that it can meet its goals by the end of the year.

In previous articles published in Bolivia I have suggested that the ideal thing to do would be to establish a cluster or industrial conglomerate in the Salar de Uyuni, in which various state and /or private enterprises  (either in association or through service contracts with the government) compete using the best available technologies in the extraction, development and industrialization of evaporite resources in the world's largest salt lake. I have also argued that the great obstacle to progress in this direction is the rhetoric that the first two phases of the so-called  industrialization strategy must be solely run by the government.

In this context, the results of the pilot adventure have begun to take its toll. Because they are not at all obvious and the principal executives will be held accountable for their work by the end of the year, the nervousness seems to have taken hold of them. The worst is that this is leading to the highest echelons of power to make more mistakes this time, even political. At first glance, the surprising  memorandums of understanding signed in recent days with South Korea and China should be praised because they point to turn Bolivia into the powerhouse of the world.

However, this requires more careful scrutiny. A question to ask now is: What was the rush to sign  these agreements? In my most recent contribution I pointed out that to advance the industrialization of lithium in Bolivia it is essential that the government's new strategic partners get involved in the early stages of the government strategy. Why? For something very simple: The manufacture of lithium-ion batteries requires  high purity lithium carbonate that the pilot project will most likely not be able to deliver unless its strategic partners help the experimental plant to obtain it.  

Incidentally, I am not the only one claiming that.  A few weeks ago, a senior official of Japan has stated that his country would begin in September to support the pilot project with a new lithium extraction process.  I do not see why it could not happen the same with South Korea and China. So everything seems to indicate that Japanese, South Korean and Chinese would have come to the rescue of the lithium pilot project so that it can meet its goals by the end of the year, namely to produce 40 MT of lithium carbonate and 1,000 MT of potassium chloride a month.  It would be nice to know if the string of agreements signed is nothing more than the instrumental for that involvement. But what's wrong with this? Well, among other things, that - as I said in one of my recent articles - from now on it will be very difficult to know what is the result of the country's own efforts and what the effect of the intervention of foreign powers. The rhetoric that the first two phases of lithium industrialization will be completely run by the Bolivian government is once again demolished and with it the government's credibility. I wonder whether it wouldn´t  have been better that the government recognized the difficulties encountered in the process of experimentation and decided to make the prompt change of direction that the most strategic project in the history of Bolivia requires.

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