Lithium Economics

Taran`s Questions about Bolivia`s Lithium

Apr 30, 2014

In this blog I answer a few simple questions on Bolivia´s lithium formulated by Taran, a Grade 8 student at Greater Saskatoon Catholic Schools in Canada. They have to do with the resources and the political situation regarding the extraction of lithium. I have since included some postscripts with some of my more elaborated views on the subject.

On March 14, 2014 I was approached by a gifted educator at Greater Saskatoon Catholic Schools in Saskatoon, Saskatchewan, Canada. She told me about Taran, a Grade 8 student there, who was undertaking an independent inquiry project on the salt flat in Bolivia.

She then asked me if I would be willing to answer a few simple questions, regarding the reserve, and the political situation regarding the extraction of the lithium, as an expert in this area, to help him with his research. I replied that I would be more than happy to assist him.

In my reply to a thank you note by Taran just a few days ago, I told him that his questions made me reason about things I never thought of before.

In what follows, I would like to share with all my EVWorld readers Taran´s questions and my answers, together with some postscripts I thought about later on.

How much money is sitting under the surface of the Bolivian salt flats? How much is 1 tonne of lithium worth?

Salar de Uyuni, Bolivia’s largest salt flat, holds 10.2 million metric tonnes of 100% lithium content. To find out how much this is worth in terms of lithium carbonate equivalent (LCE), we multiply this quantity by 5.32 (which results from dividing 100 by 18.78 meaning that lithium carbonate has 18.78% of lithium content) , and multiply this quantity by 6,500 USD which is the current price of a tonne of lithium carbonate, to get 352.7 billion USD.

Postscript 1: This number would rise to 422.32 billion USD and 635.62 billion USD if current prices for lithium hydroxide and lithium metal, respectively, were considered for the calculations.

Postcript 2: Beware though that nowadays lithium hydroxide has become the new standard for lithium-ion batteries and that lithium metal has a rather limited demand for industrial applications.

How would they mine the lithium?

The classic method of production at a salt lake involves using solar ponds for solar evaporation of brines (salty water located underneath the salt lake) to precipitate heavy metals letting concentrated lithium (in the form of lithium sulfate or lithium chloride with about 6% of lithium content) float on the water and further process it at a chemical plant to obtain lithium carbonate with the aid of soda ash (sodium bicarbonate).

Postscript: As I have recently argued in an interview with Industrial Minerals, a leading magazine in the field from the United Kingdom, Bolivia, together with Chile and Argentina, will soon have to develop a rather combined strategy of production where solar evaporation co-exists with other more sophisticated and costly methods of lithium extraction.

Why haven’t they mined the lithium yet? Why are they waiting?

The Bolivian government has decided to produce lithium on their own without the help of any foreign power. In this connection, since 2008 they have set up a pilot plant to generate a “Bolivian process” based on solar evaporation which has proven to be rather difficult for at least three reasons: (i) solar evaporation rates at Salar de Uyuni are about half those of Salar de Atacama in Chile; (i) rain rates are considerably higher in Salar de Uyuni which implies that solar evaporation takes much longer in Bolivia than in Chile; and (iii) the magnesium-lithium ratio is too high in Bolivia in comparison with Argentina and Chile which makes the lithium recovery process more time-consuming and costly.

Postscript: As I have suggested already in 2010, however, the high Mg-Li ratio may be thought of as an advantage rather than a disadvantage for Bolivian brines considering a possible Mg boom in the coming years due to its potential applications in the automotive industry as a much lighter substitute for steel.

If they were to mine the lithium would the salt flat be ruined forever?

The challenge is to extract lithium without damaging the environment.

Why doesn’t the Bolivian Government investigate how Chile mines and sells their lithium?

It has. But as mentioned before both physical and climate conditions are much different in Chile than in Bolivia so that simply emulating Chile’s processes will not do in this case.

Postcript: That is why I have indicated in 2010 that to be successful in its lithium adventure, Bolivia needs to think seriously about going beyond solar evaporation as a method to extract lithium from Uyuni.

Would there be a great economic benefit to Bolivia if the lithium is mined? Or left for tourists to look at the beautiful mirages?

As I said, the challenge is to exploit lithium without damaging the environment so that Bolivia can obtain important amounts of money to be used in education, health care and the industrialization of the country, and that other activities such as tourism can continue to provide employment on that part of Bolivia.

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