Bolivia and China Ink Lithium Exploration Deal
August 10, 2011 -

By Shane Romig, Dow Jones Newswires

Bolivia signed an agreement with China International Trust and Investment Corporation, or Citic, for the Asian company to conduct lithium exploration in Bolivia's Coipasa salt flats, Bolivian state news service ABI reported Wednesday.

The deal comes as Bolivia's left-leaning president Evo Morales is visiting Beijing. Morales said that his country is "looking for allies from countries that aren't just interested in our natural resources, but rather have a political and ideological affinity," ABI reported.

Demand for lithium, a key ingredient in batteries, is expected to rise sharply in the future as countries expand their fleets of electric cars.

Companies from South Korea, France, Japan, China and Brazil are vying for deals to develop Bolivia's lithium, considered the world's largest confirmed reserves.

Last month, Korea Resources Corp. and Posco (PKX, 005490.SE) signed an initial agreement with Corporacion Minera de Bolivia for a lithium battery project in Bolivia, giving them a head start in the race.

Kores and Posco plan to set up a joint-venture company with Bolivia's state-run miner Comibol for the lithium-battery project, and will consider inviting LG Chem Ltd. (051910.SE), which makes lithium-ion car batteries, to join the project.

Bolivia has been pushing hard to find a partner willing to manufacture batteries in the country rather than just export the raw mineral.