WILL THERE BE BATTERIES TO DRIVE THE ELECTRIC CAR REVOLUTION?

The immediate future of the U.S. car industry may ride on the plug-in car and that rides on the success of the lithium ion battery.

There’s only one small problem: The biggest single portion of the world’s supply of lithium is in a remote region of the Bolivian Andes.

Oji Baba, executive, Mitsubishi Base Metals Unit: “There are salt lakes in Chile and Argentina, and a promising lithium deposit in Tibet, but the prize is clearly in Bolivia…If we want to be a force in the next wave of automobiles and the batteries that power them, then we must be here.”

Why is that a problem?

Evo Morales, Bolivia’s very popular and charismatic leader, may not make it easy or cheap for international battery-makers to get at the lithium.

The wide-ranging discussion about the threat of Peak Oil (See also The Oil Drum) makes it clear that oil's "peaking" is not due to the end of all oil on the earth but because what oil there will soon be prohibitively costly to get at. Some of the costs are geologic (the oil is deep under the ocean or in polar waters or in impure, earthy deposits). Some of the costs are geopolitical (Nigerian oil fields plagued by rebel groups, Persian oil plagued by terrorists and hostile governments).

Could lithium - tucked away in harsh and hostile regions - be, in similar ways, near its "peak" even before it gets exploited? Some estimates predict lithium demand will exceed available, economically recoverable supply in 10 years.

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Keith Johnson, the Wall Street Journal’s ace energy blogger, points out that thin film solar panels emerged as a serious solar sector contender when silicon supplies were tight, making the alternative materials in thin film an appealing bet.

Battery makers are already busy experimenting with the zinc-air battery as an alternative to lithium-ion technology. Though zinc is more available, the zinc-air product is not so far adequately rechargeable and does not hold its charge long enough.

Of many competing battery technologies...(click to enlarge)

That could mean the coming first-generation of battery electric vehicles (BEVs)will be more expensive than so far advertised.

...the most economic, so far, is lithium ion. (click to enlarge)

It may, however, turn out to be possible to work in Bolivia and to deal with Mr. Morales. He does not like the U.S., but he doesn’t especially like anybody else much better. He has refused to deal with Japanese car makers looking to exploit Bolivian lithium and, in 2006, he cut off natural gas supplies to Brazil.

President Morales just wants to build Boliva’s economy. To that end, he wants a piece of the lithium battery action – from the mining through the refining to the battery manufacturing. He has begun building his own $5.7-million lithium processing pilot plant on the edge of Bolivia’s biggest lithium region. This might come as a surprise to leaders around the world planning to import Bolivian lithium and build their own battery-manufacturing industries but it isn’t a bad idea for Bolivia.

Luis Alberto Echazu, Morales’ Mining Minister: "This is a unique opportunity for us…The days of U.S. car companies buying cheap raw materials to sell expensive cars are over."

Pretty much everybody agrees Bolivia is “the Saudi Arabia of lithium.” Some geologists believe there is more than has yet been identified in other places (e.g., Chile, Argentina, China, Tibet) but nobody doubts there is a lot in Bolivia.

Mitsubishi and Toyota have already made overtures about lithium. They were turned away.

Mining Minister Echazu: "All they wanted to do was carry away the raw lithium carbonate…and that's not what we're after."

Memories of an exploited colonial past and an exploited recent past make Bolivians vigilant.

Marcelo Castro, manager, pilot lithium processing plant: “Of course, lithium is the mineral that will lead us to the post-petroleum era…But in order to go down that road, we must raise the revolutionary consciousness of our people, starting on the floor of this very factory.”

Though Bolivia does not seem to need foreigners as much as they need Bolivia's lithium, Bolivia does needs experts and capital to develop its own resources. Those are the openings. The Morales government has already formed an international advisory panel of auto experts.

Saul Villegas, director, Bolivian Mining Corporation: "We know that we lack know-how and that we need investment to pull this off…"

Morales’ plans and motives are not clear but he seems to sincerely want to prevent the irresponsible exploitation of Bolivia’s natural resources for the benefit of outsiders. He also seems to be sincere, for example, about balancing the need for opportunity for the indigenous people of the Salar de Uyuni, Bolivia's biggest lithium region, against potential environmental and health hazards. Prolonged exposure to lithium can cause nervous system disorders but might seem an acceptable risk in a desolate, opportunity-hungry region.

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Francisco Quisbert, leader of Frutcas, a salt gatherers and quinoa farmers group: “We know that Bolivia can become the Saudi Arabia of lithium…We are poor, but we are not stupid peasants. The lithium may be Bolivia’s, but it is also our property.”

The indigenous people don’t know much about battery electric vehicles (BEVs) but they are anxious for opportunity.

Delia Alejo, Southern Highland Regional Federation of Women Peasants: "We are very excited about the prospects…This is going to bring great development."

Maybe. But not like in Colonial days.

Villegas, Bolivian Mining Corp.: “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.”

This ain’t grandpa’s foreign resource development. But even Bolivians realize they must seize the moment.

Juan Carlos Zuleta, Boliivan economist: “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.”

Yes, Mr. Zuelta, zinc-air is in the offing. There is a world of Westerners who have barely heard of lithium but who know that the answer to a flagging economy, global climate change and international energy conflict is simple: Get the cars on the grid and clean up the grid.

That is the urgency driving President Morales, who knows what the indigenous peoples – though they know little of BEVs – are thinking about.

Pedro Camata, 19, resident of the Salar: “I’ve heard of the lithium, but I only hope it creates work for us…Without work out here, one is dead.”

The lithium-rich Salar. (click to enlarge)

In Bolivia, Untapped Bounty Meets Nationalism
Dimon Romero, February 2, 2009 (NY Times)
and
For Lithium Car Batteries, Bolivia Is in the Driver's Seat
Jean Friedman-Rudovsky, Janaury 22, 2009 (Time)
and
Peak Lithium: Will Supply Fears Drive Alternative Batteries?
Keith Johnson, February 3, 2009 (Wall Street Journal)

WHO
Bolivian President Evo Morales; Bolivian Mining Minister Luis Alberto Echazu; Marcelo Castro, manager, pilot lithium processing plant; Saul Villegas, director, Bolivian Mining Corporation; Francisco Quisbert, leader of Frutcas, a salt gatherers and quinoa farmers group; Delia Alejo, Southern Highland Regional Federation of Women Peasants; Juan Carlos Zuleta, Boliivan economist; Pedro Camata, 19, resident of the Salar

WHAT
Lithium-ion batteries are the key to the coming generation of battery electric vehicles (BEVs) and Bolivia’s lithium is the key to those batteries.

Batteries for the Chevrolet Volt. (click to enlarge)

WHEN
- In Bolivia’s colonial era, the lithium-rich Salar de Uyuni was exploited for its silver.
- In the 1990s, Gonzalo Sánchez de Lozada, later Bolivia’s president, stopped Lithco, an American company, from grabbing Bolivia’s lithium.
- 2006: Morales nationalized Bolivia’s natural gas reserves for development by Brazil and BP.
- 2009: The Salar de Uyuni will produce its first 40 metric tons of raw lithium carbonate.

One authoritative calculation of projected lithium demand. (click to enlarge)

WHERE
- The largest single deposit of lithium known in the world is the Salar de Uyuni of Bolivia, a 4,085-square-mile (6,575-sq-km) salt desert, an ancient inland sea, in the southern Potosi region, a desolate Amdean region where Quechua-speaking Indians subsist by bartering the salt they carry out on llamas.
- Lithium mining is ongoing in Chile, Argentina, Tibet and China.
- Per the United States Geological Survey: Bolivia has 5.4 million tons of lithium, Chile has 3 million tons, China has 1.1 million tons, and the U.S. has 410,000 tons.

Schematic of a zinc-air battery. (click to enlarge)

WHY
- Mitsubishi and Toyota have approached the Morales government about Bolivia's lithium.
- President Morales announced plans for a $5.7-million lithium processing pilot plant on the edge of the Salar.
- Morales is as protective of the Salar’s indigenous population as of its natural resources.
- A Morales-backed new Bolivian constitution gives indigenous peoples rights to the natural resources of their regions.
- GM is planning a plant to manufacture lithium-ion batteries and a battery research center in conjunction with the University of Michigan.
- Toyota co-owns a plant that makes batteries for the Prius.
- BYD is a Chinese auto and battery company in which Warren Buffet is invested.
- The batteries in most small electronic devices (cell phones, laptops, etc.) are lithium-ion.
- Lithium weighs less than nickel, the best alternative, allowing longer distance per charge.
- Lithium is refined from salty brine obtained in salt flats, sometimes beneath the earth’s surface.
- Zinc air battery advantages: (1) High energy density/low power, (2) inexpensive materials, (3) excellent shelf life, (4) range of sizes, (5) limited rechargeability.
- Zinc air battery shortcomings: (1) Sensitive to extreme temperature/humidity, (2) carbon dioxide from the air forms carbonate, decreasing conductivity, (3) high self discharge from chemical dry out, (4) limited and inconvenient rechargeability, (5) high internal resistance requires large size.

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QUOTES
- Rick Wagoner, Chairman/CEO, General Motors: "…the supply, design and construction of [electric-car] batteries must be a core competency of GM."
- Jennifer Moore, spokeswoman, Ford: "It is difficult to predict just how many electric vehicles we will see in the market…Much depends on the speed at which battery technology progresses, but equally important, cost considerations related to lithium-ion batteries."
- Erasto Almedia, analyst, Eurasia Group: "The conditions exist for foreign investment and involvement in the lithium sector in Bolivia…"
- Marco Octavio Rivera, Bolivia’s Environmental Defense League: "Lithium could be one of the least contaminating mining processes…”