In one of the remotest regions of the planet, in the Andes, lies the Salar de Uyuni, the famous salt spread across 4,000 square miles Potosi, Bolivia, well known for its fabulous wealth in silver mined there by the Spanish in colonial times. Now a new era of mining can bring a 21st century in El Dorado for the impoverished South American nation, as geologists believe that the reserves of more than half the world's lithium, may be in the salt.

Government officials say that Bolivia has the world's largest lithium reserves, and also believe the country is prepared for the benefit of automobile manufacturers that are driving the development of electric vehicles that run on lithium-ion batteries.

"Bolivia will become a major producer of batteries six years, "Luis Alberto Echazú, Minister of Mining and Metallurgy, said in an interview. He listed three firms said have expressed interest in investing in risk of lithium government: Sumitomo, Mitsubishi and Bolloré, a French company.

Lithium is the metal most lighter and less dense solid. It has been extracted from under saline, currently about 70% of supplies in the world comes from Chile and Argentina. USGS U.S. said that 5.4 million tonnes of lithium could potentially be mined in Bolivia, compared with $ 3 million in Chile, 1.1 million in China. Independent Geologists estimate that Bolivia may have deposits of lithium and follow Uyuni salt deserts of others, though high and the quality of the reserves could hamper access and removal difficult.

Although estimates vary widely, some geologists say the manufacturers of electric cars could be based in lithium deposits in Bolivia for decades. More importantly, the U.S. is estimated that less than 400,000 metric tons available for exploitation in its borders. While lithium batteries are currently no hybrid engine vehicles, analysts think the electric fuel-efficient cars of the future is likely to use them. With an estimated 20,000 tons of lithium carbonate saline annual expected, growing demand for lithium batteries for electric vehicles, and the price of a tonne of lithium over $ 350 in 2003 to $ 3000 this year, attracting a potential bonanza for the socialist President Evo Morales.

"No There are salt lakes in Chile and Argentina, and a promising lithium deposit in Tibet, but the reward is clearly in Bolivia, "Oji Baba, an executive at Mitsubishi Base Metals Unit, said in La Paz. "If we want to be a force in the next wave of cars and batteries that power, then we have to be here."

Mitsubishi is not alone in planning to produce vehicles using lithium-ion batteries. Sick car manufacturers in the United States have placed their hopes on lithium. General Motors (NYSE - GM) expects to launch its Volt in 2010, pairing a rechargeable lithium-ion battery with a gasoline engine. Nissan, Ford and BMW, among Other automakers have similar projects.

The demand for lithium, has risen as manufacturers of batteries for BlackBerry, iPhones, laptops and other electronic devices use the ore. But the automobile industry has the greatest untapped potential for lithium, analysts say. It weighs less than nickel, which is also used in batteries, which allow electric cars to store more energy and be driven by longer distances.

However, President Evo Morales of Bolivia and powerful popular movement are suspicious of foreign companies and have a history of arbritary relations with foreign firms Brazil, discovered in 2006 when all the concerns Morales nationalized Bolivia's natural gas, including operations by the British producer BP (NYSE - BP). The end result is that foreign companies have suspended all investment opportunities in Bolivia.

"There are quite significant obstacles development of resources in Bolivia, "said Timothy McKenna, vice president of investor relations at Rockwood Holdings, one of the three major producers of lithium in Latin America.

At the headquarters of La Paz of Comibol, the state agency that oversees mining, Morales' vision of combining socialism with the defense of Bolivia, Indigenous is visible on the screen. Copies of Change, a new state-controlled newspaper, are available in the lobby, while posters of Che Guevara, an icon of left killed in Bolivia in 1967, appear at the entrance to the offices of Comibol.

"The previous model of imperialist exploitation of our natural resources will not be repeated in Bolivia, "said Saul º l Villegas, a division chief in the COMIBOL, which oversees the extraction of lithium." Such turn might have the possibility of foreigners accepted as minority partners, or better yet, as our customers. "

One possible model is already in its Instead, India Jindal Steel & Power signed a U.S. $ 2.1 billion in 2008 to exploit iron stores in the south-eastern Bolivia near the border with Brazil. This will allow Jindal leading steel producer in India to develop 50% of El Mutun, believed to be the largest reservoir of untapped iron ore in the world, along with steel making facilities. With an estimated 40 million tons of iron ore reserves, El Mutun is expected to generate $ 200 million year to Bolivia, in addition to 21,000 jobs when commercial production begins in 2010 steel. It is strongly rumored that Jindal won the award because of his environmental record. In 2007, Jindal won India's National Energy Conservation Award in the Integrated Steel plant sector for success in protecting the environment by adopting eco-friendly processes and activities.

The opportunity to enrich the nation is there and a careful balance between foreign financial and technological assistance in the development of deposits, while providing economic and ecological bias to Bolivia is obviously necessary. The real question Morales can walk the tightrope between populist politics and reality? My opinion, get there, as seen recently, the collapse of oil prices have had a significant negative effect on Venezuela and Hugo Chávez's influence in the region and beyond. So a route for foreign direct investment seems to be closed. Morales is an operator of Sharp & I imagine him leaving foreign companies in collaboration with the COMIBOL, but in terms of Bolivia.

Paul Harper is a telecoms consultant currently based in Switzerland. Following a number of years working across Eastern Europe, Middle East & Africa, he has developed an interest in emerging markets & maintains a blog to that effect. MyStockVoice provides an insight into emerging markets & more specifically opportunities in telecoms, commodities & energy plays. Paul writes with a view to providing information for a Western audience, showcasing opportunities for investment using ADR & ETF strategies.

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