TOPICS > Economy

Bolivia’s Lithium Resources May Prove Hot Commodity

April 17, 2009 at 6:25 PM EDT
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Bolivian leaders are debating whether the country's vast natural reserves of lithium -- a key ingredient powering electric cars -- should be nationalized in order to boost the nation's struggling economy. ITN's Channel 4 news correspondent Lindsey Hilsum reports.

JUDY WOODRUFF: As we reported, President Obama will be at the Summit of Americas this weekend. A key issue there, along with Cuba, is the economic recession, and that is exacerbating the social and economic divides of the hemisphere, as we see in this report from Bolivia. The correspondent is Lindsey Hilsum of Independent Television News.

LINDSEY HILSUM: We’re driving across the largest salt flat in the world. It contains a metal which may soon make our old-fashioned oil-dependent vehicle obsolete. Beneath our wheels lies the essential element of the 21st century, the mineral which could save the planet.

Guillaume Roelands, a Belgian civil engineer.

GUILLAUME ROELANDS, civil engineer: Actually, all the minerals are in the brine, not in the salt.

LINDSEY HILSUM: He’s advising the Bolivian government on how to extract lithium, the key ingredient powering the electric cars we may all soon drive. Lithium is light, highly reactive, and can store a charge for longer than other metals, and there’s more of it here than anywhere else on Earth.

GUILLAUME ROELANDS: Well, this is the most important lithium reserve in the world. We are speaking about 70 percent, 80 percent of global lithium reserves that are here.

LINDSEY HILSUM: The Bolivian team is just starting its project. They’ve dug ponds in the middle of this unique landscape. Water evaporates, and they’re left with dense liquid and crystals.

As manufacturers begin to move from cars which use oil, emitting global warming gases, to battery-operated vehicles, world demand for lithium is expected to exceed supply within a decade.

The vast reserves in the Salar de Uyuni are crucial, but we’re 3,700 meters above sea level in the poorest country in South America, and this is the most remote part.

MARCELO CASTRO, chief engineer (through translator): We’re starting this company, this project from scratch in a place with no electricity, where all the roads are poor. There’s no water, no communication services. The project will have to develop all of that.

Global demand for lithium

LINDSEY HILSUM: We follow the team across the Salar. They're in the vanguard not just of a new technology, but of a potential shift in global power relations.

The price of lithium has increased eightfold in the last six years. International competition for the lithium beneath this salt crust is intense. Companies from France, South Korea, Japan, they all want to get involved.

But the Bolivian government is keeping everyone at arm's length until they've understood this process, because that's the way, they say, they'll get the best bargain.

Half a world away, Bolivia's president, Evo Morales, is going for a drive in an electric car. The French auto magnate, Vincent Bollore, whose company has developed the vehicle is showing him the prototypes.

Morales is a socialist determined to uphold the rights of Bolivia's indigenous people. He says the Americans are all imperialists, so the Frenchman sees an opportunity to win favor and get the lithium.

VINCENT BOLLORE, French businessman (through translator): It's you who controls the raw materials for the 21st and 22nd centuries. You're like Saudi Arabia. It's you.

LINDSEY HILSUM: In the Bolivian capital La Paz, they're dreaming about that pot of gold. A new socialist constitution says foreign companies exploiting the country's natural resources must reinvest all profits in Bolivia.

LUIS ALBERTO ECHAZU, Bolivian minister of mining (through translator): Any company which would like to work with us will have to develop industries here, otherwise there's nothing. It's very simple: We will not continue exporting raw materials for another 500 years. That is over.

LINDSEY HILSUM: They're analyzing the lithium and other minerals at a laboratory borrowed from La Paz University. Mitsubishi and Sumitomo are advising, but President Morales says they must promise to produce the lithium ion batteries and even the electric cars in Bolivia.

The danger is that, if he's too demanding, the foreign companies will just give up and go home, leaving Bolivia without the technical skills it needs to exploit its lithium.

Miners take a stake in the debate

LINDSEY HILSUM: Driving across the Altiplano through the classic landscapes of the Andes, where Bolivia's indigenous peasants have herded their llamas and alpacas for centuries, always poor, always struggling.

We're heading back in time to the 16th century to Potosi, the colonial city built when foreigners first spotted Bolivia's riches. On the Cerra Rico, the rich mountain above the town, Bolivian miners are still working in terrible conditions to extract resources for export.

Over the centuries, some 8 million Bolivians are believed to have died while mining, and those working today are well aware that they get only a small proportion of the profit from the silver, tin, and other metals they find.

BRUNO CONDORI, miner (through translator): We miners sell it to Asians. Then we know it goes to other countries.

LINDSEY HILSUM: Some families live amongst the mines making a few pennies from looking after mine equipment. They're desperately poor, like most Bolivians.

The river runs almost orange. It's polluted by mercury and other contaminants from the mines.

President Morales' supporters were born of this deprivation. They're demanding that with lithium it should be different and have threatened to protest and strike if it's not.

The mining unions, inspired by Bolivia's revolutionary past, also have a stake in the lithium.

HERIBERTO CHAVARRIA CHOQUE, Bolivian Union of Mineworkers (through translator): What we say is that the central government, its administration, and Comibol, the mining corporation of Bolivia, must do the exploration, exploitation, and administration for the benefit of the Bolivian people.

Hoping for a better quality of life

LINDSEY HILSUM: Back in the Salar de Uyuni, they're harvesting salt. Until now, this has been the major source of income, apart from farming, for those who live on its borders. Many still don't know what potential wealth lies beneath the crust.

Those that do say that, as indigenous Bolivians, they own the lithium and should get royalties. Like the miners in the provincial capital, Potosi, they're also hoping for jobs.

CALIXTO CONDORI, Colchani village leader (through translator): If a national, transnational, or international company comes, our local region will have to get something. We're hoping, if they come, it will be legal and they won't cheat us. Sometimes companies come here just to take things away and pay no attention to our needs.

LINDSEY HILSUM: About 100 people are already employed building the pilot plant, which they hope to finish by the end of the year. The Salar de Uyuni is so big and the process of extraction so benign they say it won't damage this unique environment.

The Bolivian government says that, after centuries of imperialism, the writing is on the wall. The historical tables are being turned.

LUIS ALBERTO ECHAZU (through translator): The companies in the world need to change their way of thinking. You cannot continue to live off the resources of poor countries, repeating the exploitation, contaminating the planet. This is unsustainable.

LINDSEY HILSUM: By 2015, the USA alone is hoping to have a million electric cars on the road. But if the multinational companies which make batteries can't get enough lithium, scientists will look for another solution.

Bolivians are dreaming big, but they have to get it right. This historical opportunity won't come again.