With international demand for lithium expected to rise precipitously for at least the next two decades—thanks in part to anticipated growth in the electric vehicle industry—the country that controls the world’s largest supply of the mineral is just now making progress in capitalizing off of its resource.

Bolivia, a landlocked country that is thought to be home to about 50 percent of the world’s lithium supply, is promising to begin production at its first major lithium mine and processing center in 2014. That mine, which is located in the Uyuni salt flat, will be planned in collaboration with South Korea, which will in turn receive a claim to 30 percent of its products.

Global demand for lithium is expected to as much as triple in the next decade, and companies like LG, Mitsubishi, and Sanyo—which is planning a 1000-percent increase in annual lithium ion battery production in just five years—are currently jostling elbows in an effort to lock down the resources that will allow them to profit from that boom. But despite the international sourcing scramble, South Korean and Japanese state-owned mining entities are to date Bolivia’s only partners in developing its lithium reserves.

That’s because according to President Evo Morales, those reserves are worthless if they don’t provide the nation with a path to long-term prosperity. That means building industry inside Bolivia to manufacture the lithium batteries that result from mining—terms to which no foreign companies have so far been willing to agree.

“ All the companies want to invest just to buy lithium carbonate. And why do they want to buy only lithium carbonate from us? So the lithium battery industry remains outside Bolivia. ”

Bolivian President Evo Morales

Last year, talks broke down between Bolivian negotiators and several major international corporations, including LG, Bolloré, and Mitsubishi. With nobody interested in sourcing battery production to Bolivia, Morales has recently stated that his country will attempt to build its own industry from the ground up—a notably ambitious undertaking for a nation with such limited background in technological manufacturing and development.

If he can find a technology partner, Morales is willing to invest as much as $900 million to grow a new domestic high-tech battery industry. Still, there is little hope of selling electric vehicles at high volumes in Bolivia—whose per capita income is less than $4,500 a year—or in South America at large, where electric vehicles are projected to see little traction in the short-term thanks to low fuel prices and abundant petroleum reserves. At some point, Bolivia would have to find overseas trading partners for its batteries.

Bolivian Standoff

Some have suggested that Morales is posturing in his threats to shut foreign companies out Bolivia’s lithium mines in favor of what would essentially be a giant, socialized clean-tech startup. It’s unlikely that the leader’s popularity will continue to reach new heights if he’s unable to deliver on promises of a better life for the millions of poor people who helped re-elect him last year with a 63-percent majority. In order to fund those promises, Bolivia will have to find new sources of revenue outside of its natural gas industry—which was socialized in 2006 in an effort to keep more of its revenues inside of Bolivia.

And so, Morales and his foreign suitors could continue to remain in a standoff until a scarcity in new lithium production couples with Bolivia’s need for revenue to reach a critical threshold. The country recently agreed to a deal that will allow it to own its first port, located on the Peruvian coastline. That port will one day send millions of tons of lithium to markets around the world—the question is whether it will be in the form of lithium carbonate or finished battery products.

In the meantime, it should be interesting to see just how far Bolivia gets in its quest to build a new nationalized electric car or lithium ion battery industry from the ground up.