Bolivia struggles to find lithium

ON Bolivia's Salar de Uyuni, a vast white salt flat that feels almost otherworldly, Karina Quispe is watching from the sidelines a global resource race for the world's largest - and almost untapped - trove of battery metal lithium.

Her village on the edge of the salar - from where most of the men have migrated to Chile to find work - has so far seen few jobs or benefits from the mineral wealth beneath the plains.

“This is a forgotten town,” said Quispe. As the government readies to award a lithium mining project to one or more of a global array of suitors, she is hopeful that could change.

It is the South American country's most ambitious effort yet to exploit its lithium at a time when carmakers and governments are scrambling to secure supplies for the metal that is needed for the batteries powering the electric vehicle revolution.

But the locals' dreams of lithium wealth may still be no more real than the shimmering mirages that appear over the Uyuni flats. The landlocked country faces steep challenges to meet its targets, according to Reuters interviews with a dozen current and former officials, as well as scores of local residents around the salt flats.

Among the key hurdles are technological challenges, simmering citizen resistance, a nonexistent legal framework for lithium mining, and looming infighting within Bolivia's ruling socialist party over taxes and royalties, the sources said.

“I see an exaggerated enthusiasm. It's not grounded in reality,” said Juan Carlos Montenegro, a former top Bolivian official in charge of lithium extraction under the administration of ex-President Evo Morales.

Bolivia expects to announce later this month one or more partnerships with foreign firms to exploit the salar's riches. Eight competitors from China, Russia, Argentina and the United States are bidding - none of which have exploited lithium at a commercial scale before.

Lithium prices have skyrocketed this year and automakers from Tesla Inc (TSLA.O) to Volkswagen AG (VOWG_p.DE) are struggling to source the metal.

Bolivia's long-shot goal: to make lithium-ion batteries locally by 2025, an ambition even neighboring and more affluent Chile, the world's No. 2 lithium producer, has not achieved after decades of production.

But in Potosi, the Bolivian region where the lithium is located, authorities do not expect any production until 2030, Juan Tellez, an adviser to the regional governor, told Reuters. That is five years behind the central government's timeline.

Bolivia has a history of unfulfilled promise with lithium.

It has tried and failed to develop its lithium several times since the 1990s, — Reuters.