Bolivia Eyeing Lithium Development Deal with Korea

Bolivia Eyeing Lithium Development Deal with Korea
Arirang News / Aug. 10, 2010 11:24 KST

Korea and Bolivia are poised to boost their cooperation in lithium development.

According to the Ministry of Knowledge Economy and the Korea Resources Corporation, Bolivian President Evo Morales will make a three-day state visit to Korea at the end of this month with lithium development high on his agenda.

About 40 percent of the world's lithium reserves are in Bolivia and countries including Korea, Brazil, France and Japan are facing off for the rights to develop the core element used in producing rechargeable batteries.

Korean companies such as LG Chem and Samsung SDI are among the leaders in the global production of rechargeable lithium-ion batteries.


http://english.chosun.com/site/data/html_dir/2010/08/10/2010081000789.html

This is either a big mistake made by Morales, or he is only trying to travel to Korea to see their tourist attractions. The article makes it clear it is South Korean companies which would make the investment. These Latin American leftists deceive the public and themselves in a futile pursuit of old style communist block trade practices, that is, country to country trade. But the reality is much different, these "country to country" trade agreements are made to further the interests of multinational corporations. The countries "making the business deal" are only fronts or launching platforms for the real entities doing business. Yet these naive guys like Morales and Chavez keep deceiving themselves into thinking they are living in a fantasy world doing country to country business as if they were in the old Comecon.

What Morales should do instead of listening to the idiots who are advising him is to have a law developed to carry out bid rounds in which the companies are given a set of conditions, such as investing in plants to build the lithium batteries inside Bolivia, while imposing a limit of no more than 5 % of the total payroll paid to foreigners. The award is based on the royalty or extra tax the companies are willing to pay, once they have accepted the basic conditions. By negotiating one by one agreements "with countries", Morales lacks the information regarding the true value of those lithium resources, and he fails to snare the investor which is willing to accept the terms as well as the lowest possible return on investment. But I would not expect these guys to act rationally, they seem to be quite ineffective and uneducated when it comes to these matters.