Monday, June 14, 2010

Sorry Bolivia, There's a New Kid on the Block

Bolivia recently jumped into the headlines as a potential, albeit somewhat cautious "Saudi Arabia of Lithium."

As the NY Times covered last year, Bolivia was confident that it would soon hold huge sway over the multinational producers who'll need lithium for to produce their gadgets:
“We know that Bolivia can become the Saudi Arabia of lithium,” said Francisco Quisbert, 64, the leader of Frutcas, a group of salt gatherers and quinoa farmers on the edge of Salar de Uyuni, the world’s largest salt flat. “We are poor, but we are not stupid peasants. The lithium may be Bolivia’s, but it is also our property.”
But today the New York Times reported on a surprising discovery that Afghanistan may hold up to $1 trillion worth of lithium and other precious metals, some of it in Taliban-controlled areas across the Pakistan-Afghanistan border region. Lithium is a critical component in batteries for cellphones and a host of other personal electronics, but global demand is expected to really jump when we all start driving electric cars.

The rush to mine Afghanistan's lithium - for better or worse - is officially on. China has spent years building its green tech industry and seemingly has no qualms about going anywhere and partnering with anybody to access the natural resources that drive its growth. And given the whole war thing, the US might like to get it some lithium, too. Not to mention Afghanistan, who would like to export something besides poppy (heroin) and the occasional dried nut.

So where does this all leave Bolivia? La Razón, a Bolivian daily, is leading its website with government spokesperson Iván Canelas saying the Afghanistan discovery will have no effect on Bolivia's lithium development plans.

Those plans, up to now, have tended to the realm of "resource nationalism" and have shown significant concern about the benefits of foreign investment. Referring to Bolivia's long history of being a mineral-rich country with extremely uneven development, President Evo Morales said his country need "partners but not patrons."

The "resource curse" - the corruption, instability and inequality that often results when poor countries becoming major producers natural resources - is well documented.

With today's announcement, Bolivia may have fallen from its perch as the "Saudi Arabia of lithium," but perhaps that's better than settling for being the "Nigeria of lithium."

Image Source: NY Times
Online Sources: Green Beat/Venture Beat, Vanity Fair, La Razón (Bolivia), Reuters, Reuters Africa, Wikipedia, Council on Foreign Relations

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