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>> Lithium ion batteries that power smartphones, laptops, toothbrushes and even the expanding market for electric vehicles, all require the same substance, lithium. And the poor South American nation of Bolivia sits on nearly a quarter of the known resources of the world's lightest metal. I'm Alexandria Alper and I cover commodities markets for Reuters in Brazil.
I've just returned from a trip to Bolivia where the government is hoping to attract serious investment to scale up its feeble lithium industry. At the world's largest salt flat, Uyuni, I saw turquoise pools of brine, which slowly evaporate so that lithium crystals can be extracted. Spot lithium carbonate prices have leapt from beneath $10,000 a ton in 2015 to around 25,000 per ton today.
But even though Bolivia has spent some $450 million over nearly a decade to extract the metal and turn it into cathodes and batteries it is only producing about ten tons of lithium carbonate per month. Rivals, Chile and Argentina, are producing way more, like 70,000 and 30,000 tons a year total respectively.
I interviewed the head of the state run lithium company who said he is in talks with potential partners to invest up to $750,000,000 to help scale up the industry. He wouldn't say who he was in talks with but said a deal could be awarded this month for the plan to ramp up the project which could include up to seven new plans.
But investors have reason to be cautious. In Bolivia, rains at the salt flat disrupt evaporation. And Bolivia has four times the amount of magnesium in the brine compared to Chile which makes it much harder to extract. And there's political risk as well. The country's president has nationalized several foreign holdings since 2006 when he took office.
Investors need to see a clear path through the politics and the natural challenges that lead to profit if the country is to play a real part in the booming global lithium market.