By on February 13, 2009

Lithium-ion batteries are not yet a major source of automotive propulsion. Excluding the li-ion cells lingering within the $100k+ Tesla Roadster, not a single volume vehicle depends on the technology. Toyota has adopted a “go slow” policy on li-on cells re: their gas – electric Synergy Drive (most famously found inside the Prius). Sure, li-ion batteries will power Chevrolet’s electric – gas hybrid Volt. Eventually. And that’s no small point. At the moment, with gas prices at historic low levels, hybrids simply aren’t selling. Of course, nothing’s really selling. Except the idea that we need lots and lots of hybrids and that those hybrids will need lithium ion batteries and we better make sure we have enough lithium otherwise the vision of clean, gas-free personal transportation will disappear. And the New York Times can’t have that, now can it?

Earlier this week, The Times set the autoblogosphere abuzz with a look at Bolivia’s bounteous lithium supply. According to the Times, the United States Geological Survey estimates Bolivia is home to some 5.4m tons of lithium. The U.S. soil supposedly contains “just” 410lk tons of lithium. Ladies and gentlemen of the politically aware persuasion, forget ye olde missile gap. Welcome to the “lithium gap.”

Francisco Quisbert is the leader of a group of salt gatherers and quinoa farmers who live near a giant salt flat. Quisbert’s fifteen minutes of fame arrived when a NYT reporter recorded him pronouncing “we know that Bolivia can become the Saudi Arabia of lithium.” If that wasn’t enough to raise the hackles of the friends of hybrids, Quisbert also played the class card. “We are poor. But we are not stupid peasants. The lithium may be Bolivia’s, but it is also our property.”

Yeah right. Meanwhile, back to the template Times’ readers know and love to hate: western exploitation. The head of Bolivia’s national– yes national– lithium mining company provided the necessary rhetoric. “The previous imperialist model of exploitation of our natural resources will never be repeated in Bolivia. Maybe there could be the possibility of foreigners accepted as minority partners, or better yet, as our clients.”

Bolivia’s President (and former Coca grower) Evo Morales is no stranger to the government-sanctioned expropriation technique commonly known as “nationalization.” Whether sending soldiers into BP’s local headquarters or nationalizing Brazil’s natural gas operations and then charging higher prices, Morales has made it clear that he believes natural resources belong to local indigenous peoples (even if they’re not as well compensated as, say, the Bolivian government and Morales-appointed representatives).  

Obviously, lithium commerce predates hybrid hopes. The battery industry has been buying lithium for well over a decade. And Bolivia’s reluctance to grant that industry grant unfettered access to its lithium predates its current leftist president. When right wing nationalists controlled the Bolivian government in the early 90s, advances by the American firm LithCo to secure supplies were thwarted. Unlike the early days of Saudi oil exploration, American firms are on the outside looking in.

The Times reports that Sumitomo, Mitsubishi and a French conglomerate headed by Vincent Bolloré have been trying to wrangle a lithium extraction deal with the Morales government. More recently, Reuters has reported that the Korean firm LG is trying to jump onto the Bolivian lithium bandwagon.

Morales is having none of it. Well, some. The companies’ opportunities are limited to investment in the government operation, which consists of a $6m pilot plant. Construction of a $250m lithium extraction plant is proceding at what The Guardian calls a “snails pace.”

According to Bolivia’s state mining director Freddy Beltran, “there haven’t been any developments (in the negotiations with Mitsubishi, Sumitomo or Bolloré). None of them has made a proposal including (the creation of a lithium) industry.”

Beltran’s kvetch: the three firms all want to export raw lithium. (Why does this sound familiar?) The Bolivian government wants them to develop a processing industry in-country.

Yes, well, the Bolivian government is likely to come to some kind of “arrangement” fairly soon. As one Bolivian economist puts it, “we have the most magnificent lithium reserves on the planet, but if we don’t step into the race now, we will lose this chance. The market will find other solutions for the world’s battery needs.”

Or other lithium supplies. The WSJ’s Environmental Capital blog (and Lithium Abundance blog) points out that increasing demand for lithium would increase exploration, which could turn up new reserves.  

What’s more, battery technology is hot (so to speak). With federal funding providing the match. Scientists are hot on the trail of alternative battery materials– from zinc-air to improved nickle-metal-hydrate. Meanwhile, China is pumping out lithium for its own booming battery sector.  

In short, despite the NYT geo-political paranoia, anyone worrying about the possibility of a Bolivian lithium embargo is wasting their energy.

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27 Comments on “Editorial: Pass the Lithium...”


  • avatar
    CommanderFish

    I’ve thought for a while that we (the United States) should be pushing for closer relations with Latin America. We have more in common with them than we do with China. As the EU integrates more and China and India develop, all 900 million of us in the New World working together would be a good way to stay relevant.

    This could be a good catalyst for such relations.

    Who am I kidding, this is going to end in more imperial-age wars…

  • avatar
    Jerome10

    Oh, you mean energy needs aren’t without consequences?

    So the NYT seems to think oil is the worst thing ever, we gotta go electric. Now they are pointing out there might be a problem with lithium….soon we’ll hear about how we need to “get ourselves off foreign lithium”.

    Next up? Once the cars start showing up and suddenly the electric grid can’t handle it. Any bets the NYT might expose this problem as well?

    Nothing is without problems folks….I think a lot of people think that if we could just stop using oil to fuel our cars that all would be well with the world.

  • avatar
    KatiePuckrik

    Given that a lot of the concentration of lithium is in South America only makes wonder one thing…..

    Why do I have this nasty feeling that we could see another “Operation Condor”*?

    Also, there is another factor will the car companies seem to be blissfully unaware about.

    The pharmaceutical companies which lobby with these governments just as hard for access to their lithium. Lithium is used in mental health drugs and they are not going to give up that market easily.

    Expect the price of Lithium to rise steeply.

    * = http://en.wikipedia.org/wiki/Operation_Condor

  • avatar
    tesla deathwatcher

    People worry about strange things.

    Commodity prices do have an effect on electric cars. Before his untimely death, Dave Hermance at Toyota said that Toyota wanted to move to lithium batteries rather than the nickel metal hydride batteries they were then using in the Prius. The reason was soaring nickel prices. Where different resources can be used to do the same thing, price is one of the big factors that drive the choice.

    But no commodity compares to oil. We use so much oil, and it is so cheap compared to alternatives, that we will probably face a real problem adjusting as demand for oil strains supply. Electric cars will help, since electricity can come from a lot of different sources.

    But I don’t worry about demand for lithium or electricity being a problem. The prices for lithium or for electricity may be a problem. Their availability will not. For those kind of resources, demand will generate supply in a way that only oil seems to have difficulty doing.

    [Katie, the amount of lithium used in drugs is trivial.]

  • avatar
    Stingray

    I don’t see another Operación Condor in this area.

    The US of A is dead ass broke, a shadow of its former glory. And it’s focused in Irak, Afganistan…

    The time they look to see what’s happening down here… it’ll be too late.

    Venezuela, Bolivia, Ecuador, Nicaragua have turned to the left, and the last 3 are close Chavez allies, which also is Castro stronger supporter.

    Edit: after a brief read of the article KatiePuckrik posted, I stand by my argument.

    Almost all Latin America has turned to the left: Venezuela, Brazil, Uruguay, Argentina, Paraguay, Bolivia, Ecuador, Chile, with Colombia and Peru as exceptions. Also some Central America countries.

    And most of those countries are influenced by the strong (not so now with oil price @40$) petro-checkbook Chavez has.

  • avatar
    carlisimo

    What’s so bad about processing it there? It’s not a high cost country at all and it’d be nice to be on good terms with at least one of the countries we get critical supplies from.

  • avatar
    bluecon

    Maybe the US should just drill for the huge amounts of oil available offshore and develop the oil shales. Crazy idea. Way to easy.

  • avatar
    Morea

    According to the Times, the United States Geological Survey estimates that 5.4 million tons of lithium could potentially be extracted in Bolivia, compared with 3 million in Chile, 1.1 million in China and just 410,000 in the United States.

    This statement is not useful unless you know the demand. How much lithium is there in the typical electric or hybrid automobile with lithium batteries? One of you B&B can do the math.

  • avatar
    midelectric

    So the horrible thing here is that the capitalist world now has to deal with people who understand their own power and want to make sure they’re fairly compensated for the natural resources they own? Wacko leftists!

    Peel back the layers of fear in the NYT article and you’ll find that the real problem is that capitalists now have to deal with indigenous people on equal terms. The state sponsored coups and insurrections haven’t worked and the US military is bogged down on the other side of the world so no “Operation Freedom”s can be pulled off. Good for them, in the long term governments that look out for their citizens interests are the ones that will help build a strong and stable country.

    Unless you need your allies to be co-dependent sycophants, that is a good thing.

  • avatar
    FromBrazil

    @Katie

    We aren’t in the 70s no more. If you’re trying to do something like that again, you have to deal with other factors. Namely, Brazil is not a military government anymore and it won’t sit still and see something like that happen. At the very least you’ll see Brazil taking a part, an aggressive one, in the tearing up of Bolivia.

    It’s too long to explain, especially for a car site, but this country (BRazil) speaks left wing but acts right wing in terms of economics. Pure monetarism baby!

    And gimme a break, Castro, Chávez and Morález??? LOL!!!!!!!!!!

  • avatar
    Engineer

    Major difference between lithium and oil: you can use the energy stored in the lithium (hundreds of?) thousands of times. And when the battery dies, you can even recover the lithium (assuming it is scarce/expensive enough). So gimme a break, we will never be as dependent on lithium as we are on oil.

    Furthermore, alternative battery materials (from zinc-air to improved nickle-metal-hydrate…
    Need a chemistry lesson, Ed? AFAIK, there is no battery out there that uses nickle-metal-hydrate (i.e. water), only nickle-metal-hydride (i.e. useful form of hydrogen).

  • avatar
    Robert Schwartz

    I would say this is a problem for the future of the electric car, but the electric car had no future before this wrinkle popped up.

  • avatar
    GS650G

    Unlike oil lithium is not completely destroyed when it is used. Recycling might reduce the take for the Blivians.

    If all else fails governments can be changed and people removed from the decision process.

  • avatar
    mel23

    Namely, Brazil is not a military government anymore and it won’t sit still and see something like that happen. At the very least you’ll see Brazil taking a part, an aggressive one, in the tearing up of Bolivia.

    No problem. Well, not a problem we haven’t solved many times before at least. That’s the job of the CIA, coups, etc. OK, communism is pretty much dead for now at least, but how about WMD? We can be very creative when we need to be, and we’ve got our very loyal media to beat the drums as needed.

  • avatar
    chuckR

    Chemical batteries could be the fusion power of this century. You know, always ‘just around the corner’. I hope that is not the case, but I wouldn’t bet on their imminent success.
    Can anyone point me to a chemical battery with high energy density, reasonable cost, long life and the general robustness to withstand the (in)attention of Joe Average? Or worse, withstand the attentions of Joe Average without frying him.
    So let’s not be making contingency plans to overthrow governments to obtain some stuff which might prove irrelevant, either because it never meets its promise or because the breakthrough formulation doesn’t need the specific element.

  • avatar

    Ah… unintended consequences, my favorite subject!

    Stingray, Chile had nowhere to turn BUT left after Pinochet. Any more to the right and you fall off the edge. A (potentially) wealthy Bolivia will U-turn Chile back to the right very fast. Why? If Bolivia gets rich they’ll blow it all on their military and go to war with Chile again to regain the Litoral.

    None of this is good news.

    –chuck

  • avatar
    CommanderFish

    So if Bolivia has the largest reserves, Chile has the second largest, Bolivia wants something of Chile’s, Chile has a slight economic head start on Bolivia…

    Oh dear, this could get interesting.

  • avatar
    FromBrazil

    @mel123

    Seriously, Brazil is a consolidated democracy. There will be no coups, staged interventions or anything of the sort.

    If push comes to shove what the US will need to do is work w/Brazil and possibly Argentina and Chile to deicide what to do. THe other countries don’t count.

    The excuses for Bolivia though are right there in the open, it’s a failed state, it’s a narco-state, etc. Plus there are very serious separatist movements going on there. If Kissinger were alive I’d bet he’d be investing in them just to make sure. And he’d be working backstage to get Brazil to cooperate in this. It shouldn’t take mmuch as an independent Bolivia’s only raison d’êtreis to be a buffer state between Brazil, Argentina and Chile.

  • avatar
    maniceightball

    This website continues to impress me. Nice work.

  • avatar
    El Galloviejo

    bluecon:
    Maybe the US should just drill for the huge amounts of oil available offshore and develop the oil shales. Crazy idea. Way to easy.

    iF this were more economically feasible and produced an adequate return on investment, the oil companies would now be doing much more than the miniscule amount of drilling in the offshore leases than they presently are doing.

    mel23:
    No problem. Well, not a problem we haven’t solved many times before at least. That’s the job of the CIA, coups, etc. OK, communism is pretty much dead for now at least, but how about WMD? We can be very creative when we need to be, and we’ve got our very loyal media to beat the drums as needed.

    Ten four, good buddy, just call ‘em ¡ E V I L !, kill ‘em and occupy their country. You know, like in the present Colony of Iraq.

  • avatar
    T2

    -FromBrazil
    Brazil is a consolidated democracy

    Hmmm sounds like a euphemism for a country which is no longer a nation state. Not to put too finer a point on it, didn’t the World Bank advance credit to your government after it was agreed, among other things, to terminate spending on military research ?

    So what I’ve learnt here is that Chile and Iraq, are both #2 in products that Uncle Sam wants. Uncle Sam only satisfies his wants not his needs. So let’s take over Chile in her defence, of course, against the Bolivians when the time comes.

    Steven Riesner(Psychologist) – who OBAMA should get into his circle – has stated that these sort of military ambitions derive from the widespread, government supported, but
    irresponsible belief in American exceptionalism.

    Referring to the belief that ethical principles that apply to others do not apply to America.

    But then, us co-dependent sycophants, speaking from Canada, what do we know ?
    T2

  • avatar
    FromBrazil

    T2

    My friend:

    A consolidated state is one which exercises its power of empire over all its population and over all its territory.

    Under this definition, not even the US, Canada or Western Europe are totally consolidated (voiture flambées, inner city, rich people getting away w/everything). But though Brazil certainly lacks comparing to the above region, compare our government’s control of our people and territory vis-à-vis Bolivia, which can´’t control even its own capital and I’m sure you’ll se what I mean.

    As to nation state, let’s not go down that route. NAtion, what’s a nation? Specially on a car site. Suffice to say we are a nation, holding on to our unique and only languange, in a continent, that speaks one language, united against us, we’re united against them in our uniqueism. And that’s one point amongst many (there is such a thing as Brazilian cuisine, music,soccer, art, arquitecture, even medicine, etc., etc.). Compare that to many of the countries in the Western Hemisphere, which are nations?

  • avatar
    Stingray

    Excuse me, FromBrazil… but this…

    A consolidated state is one which exercises its power of empire over all its population and over all its territory.

    Is absolute BS. Sao Paolo got OWNED big time like 2 years ago by a huge gang, which made a state of siege on the city. And living “above” you in Venezuela, we suffer from the same.

    Crime is ruling down here, inside jails, favelas/barrios, cities, etc…

  • avatar
    Stingray

    chuckgoolsbee :
    Ah… unintended consequences, my favorite subject!

    Stingray, Chile had nowhere to turn BUT left after Pinochet. Any more to the right and you fall off the edge. A (potentially) wealthy Bolivia will U-turn Chile back to the right very fast. Why? If Bolivia gets rich they’ll blow it all on their military and go to war with Chile again to regain the Litoral.

    None of this is good news.

    Haven’t seen as that.

    But Bolivia is ruled by Evo, and indirectly by Chavez and Castro right now, and turning to the extreme left quickly.

    Honestly, I highly doubt they’ll ever get wealthy.

    You left out the “rebel” provinces…

  • avatar
    golden2husky

    Peel back the layers of fear in the NYT article and you’ll find that the real problem is that capitalists now have to deal with indigenous people on equal terms. The state sponsored coups and insurrections haven’t worked and the US military is bogged down on the other side of the world so no “Operation Freedom”s can be pulled off. Good for them, in the long term governments that look out for their citizens interests are the ones that will help build a strong and stable country.…

    Well said. The US will not be able to exploit just for its own advancement. Much of what America owns was had by exploitation (Manhattan for $14?). So be it as far as the past goes, but those who have what the world wants are entitled to fair compensation. Capitalism is a double edged sword and when you are on the wrong edge of the blade, tough shit. If I led a country that had resources that could command a high price, you bet I would try to exact the highest price. Anybody here who constantly talks up the virtues of a capitalist society should have no problem with this, either.

  • avatar
    wsn

    It’s very understandable that the Bolivian government wants the foreign firms to build processing plants there. It’s aimed to create/preserve local jobs, something that the Americans are doing everyday (and being discussed on TTAC everyday).

    And what’s wrong with the Bolivian government? Sure, it may imprison or even torture people without a trail. So you call that “dictatorship”? Sounds more like American style anti-terrorism to me.

  • avatar
    wsn

    Oops, I meant “trial”, not “trail”, in my previous post.


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