Most people think of Bolivia as a poor country, and they are right.
The rugged landlocked nation nestled between Brazil, Paraguay, Argentina, Peru and Chile has one of the lowest per capita incomes in the continent, and more than 75 percent of its 11 million people live in abject poverty.
Despite its abundant hydrocarbons, Bolivia has had problems courting investors, mainly because of its leftist President Evo Morales, who two years ago finally broke down and agreed not to nationalize any more industries in order to attract foreign capital.
Low oil costs have not helped, and in 2016, the country registered a disappointing 3.8 percent real growth despite predictions by the International Monetary Fund (IMF) that it would reach 5 percent.
For the last few years, the government has been scrambling to make the country less dependent on oil and mining, with a more diversified economy in order to assure a steady source of revenues.
But now, Bolivia has a new mineral commodity, which, if managed correctly, could turn around the country’s economy in less than a decade.
Lithium, that key power source for practically every electronic gadget and the main component for most cell phone and laptop batteries, is Bolivia’s new white gold.
And its Salar de Uyuni salt flats — the largest in the world — are believed to harbor about 70 percent of the world’s known lithium reserves.
In a pilot program, launched last year in conjunction with the state-owned Planta Llipi lithium factory, Bolivia harvested and processed 20 tons of lithium carbonate in 2016.
This year, the country is slated to triple that output, and with an estimated 140 million tons of lithium just under the sand flats, the projected production for 2020 is for 500 tons.
The international price for lithium carbonate is expected to triple over the course of the next five years, and its vast applications are quickly multiplying to include use in gaming consoles, solar panels, robots and electric vehicles.
By the year 2025, global demand for lithium is projected to exceed 470,000 tons annually.
Bolivia’s new mineral wealth has already caught the attention of numerous transnational corporations, including from Japan, South Korea, Germany, Sweden, France, Switzerland and Canada.
The U.S. electronics conglomerate Tesla has also been wooing Bolivia for lithium for its cell phones.
But Bolivia still has some serious obstacles to overcome if it wants to cash in on its lithium wealth.
To begin with, production will have to be modernized and automated, which means heavy investment, and the government will have to provide solid assurances for international investors who have already felt the pinch of his socialist expropriations of foreign holdings.
Also, there are environmental concerns as to how the lithium extraction process is affecting the Bolivian countryside.
And there is competition from Bolivia’s more stable neighbors, mainly Argentina and Chile, as well as from China, which is one of the largest consumers of lithium.
Finally, Bolivia needs to import technology and knowhow to better exploit its lithium reserves and maintain a competitive edge.
But Morales is a diehard protectionist and is not keen on foreign involvement in his country’s industrial development.
And unless Bolivia finds a way to modernize and expedite its lithium production, the country’s new white gold may not turn out to be the economic panacea that the president had hoped it would be.
Thérèse Margolis can be reached at firstname.lastname@example.org.