Hybrid Car Future Hinges on Bolivia's Lithium

The next generation of hybrid and electric cars depends on lithium ion batteries—but the world’s biggest supply of lithium is controlled by a socialist country with no great love for the United States.
When representatives from the Obama administration visited the Washington Auto Show yesterday, their message was clear: The President hopes to make the United States a major player in lithium ion battery technology and manufacturing. Backing up their words is $2 billion of stimulus money that the administration wants to dedicate to the development of advanced batteries for fuel-efficient cars.
Lithium ion batteries—which can pack more energy and power with less weight and space—are seen as the key to the next generation of hybrid and electric cars. And those battery-powered vehicles, in turn, are seen as the key to reducing American’s dependence on foreign oil and reducing carbon emissions from vehicles. As global car companies and battery makers scramble to take the lead on this technology, there’s a question of where the lithium carbonate that makes these batteries possible will come from, and at what cost. That may dictate whether or not hybrids and EVs ever become more than niche products.
Bolivia says it hopes to one day be the world’s leading producer of lithium, and with at least 73 million metric tons waiting to be mined, the country is positioned to follow through. Representatives from Toyota, Mitsubishi, Sumitomo, and Bollore—a French electric car maker—have all contacted the Bolivian government in the hopes of hammering out agreements to buy the raw material.
But these companies have all been rebuffed. Bolivia hopes to use its suddenly vital natural resource to join its closest ally Venezuela, as a major player on the geo-political scene. Its silver and tin mines were once pillaged by imperialists, according to President Evo Morales, an unabashed socialist and nationalist who has no plans of signing away his country’s wealth to foreign interests for nothing.
And that’s just what Toyota and Mitsubishi found when they first contacted Bolivia about an agreement. “All they wanted to do was carry away the raw lithium carbonate,” said Luis Alberto Echazu, the country’s minister of mining and metallurgy, in an interview with Time magazine. “That’s not what we’re after.”
The Saudi Arabia of Lithium
Morales would like to maintain government ownership of the lithium mines and be able to influence lithium prices in the same way that Venezuelan President Hugo Chavez and the Saudi royal family influence the oil market.
All of this is obviously a thorn in the side of mining companies, who would prefer to establish advantageous long-term production agreements, and battery makers who would like to see prices for the commodity driven down by an open market. Battery cost remains a major stumbling block for hybrid and electric car makers.
Over the long run, Morales will probably have to meet these interests half way. While it’s true that Bolivia’s lithium resources are valuable, the country currently lacks the capital or infrastructure to develop lithium ion batteries on its own—no matter how much it threatens to do so. Furthermore, large reserves are known to exist in Tibet and are already being mined in Argentina and Chile.
But without access to increasingly large supplies of the raw lithium carbonate needed to produce enough lithium ion batteries for millions of cars every year, the hybrid and electric car revolution threatens to be stuck in neutral.
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