New technologies devour new resources, and the transition to hybrid and electric vehicles could make some currently impoverished countries rich.

As the world moves away from fossil fuels, the soft metal lithium will become increasingly in demand as a critical component of auto batteries for green cars.

One country in particular looks set to prosper from this: poverty-stricken and land-locked Bolivia. But mining the resource poses stiff challenges.

Home to an estimated 6 million tons (5.4 million t) of lithium, Bolivia controls about of 50% of the material’s global reserve, according to the U.S. Geological Survey.

The next largest supplies can be found in Chile (3.3 million tons [3 million t]); and China (1.2 million tons [1.1 million t]).

This fall, the First International Forum on Science and Technology for the Industrialization of Lithium and Other Evaporative Resources was staged in the South American country’s capital of La Paz.

Sponsored by the vice ministry of science and technology of Bolivia’s ministry of planning and development, some proceedings also were held at the country’s richest lithium deposit, the Uyuni salt flats.

There, the Bolivian government demonstrated it was well aware of the potential riches it could make from lithium.

“We know there are obstacles, (however) we are optimistic we’ll have a large lithium plant on target by 2014,” the country’s mining minister Luis Alberto Echazu told journalists during the event.

Unlike other countries with proven reserves – such as China, Argentina, Australia, Canada and Chile, Bolivia does not yet produce lithium.

However, the Bolivian government, reinvigorated by the re-election of President Evo Morales, has said it plans to invest $500 million in a large lithium plant and another $500 million in supporting infrastructure. The goal is to create a plant producing up to 33,000 tons (30,000 t) of lithium carbonate per year, about 30% of current annual global production.

The construction of a $5.7 million pilot raw lithium-carbonate processing plant, on the edge of Bolivia’s Salar de Uyuni, (the world’s largest salt flat), is nearing completion, and the government hopes to extract an initial 1,300 tons (1,200 t) in 2010.

Although many companies, such as Japan's Mitsubishi Corp. and Sumitomo Corp., France's Bollore Group and South Korea's LG Chem Ltd., are interested in getting involved in the Bolivian lithium industry, none of these companies have been ready to meet Bolivia’s various demands – including that lithium-ion batteries be produced locally.

Consequently, President Evo Morales declared in November the lithium industry would be 100% state owned. However, Bolivia is receiving some free advice and expertise from Bollore, Mitsubishi, Sumitomo and Kores Ltd., as well as from countries such as Iran and Brazil.

Keith Evans, a U.S.-based geologist and industrial-minerals expert, says that despite this help, “in rejecting foreign investment, the project will be ignoring the important expertise available from the development of somewhat similar brine projects” involving the extraction of lithium from salts.

Uyuni is not an ideal location for lithium production, he says, because although “the brine reserves in the Salar de Uyuni are undoubtedly very large, the concentration of lithium is low in comparison with competitive sources. The brine also contains high concentrations of magnesium, which will greatly increase the cost of lithium recovery.”

There are additional problematic factors, Evans tells Ward’s, such as “the low evaporation rate for a project, which largely will be dependent upon solar evaporation as a major processing step, and the fact that the Salar floods seasonally to the depth of half a meter.”

If that combination of poor foreign investment and geological difficulties hamstrings Bolivian extraction, it could have a serious effect on world supplies of the mineral, some experts say.

Japan’s Mitsubishi predicts that without significant production in Bolivia, there will be a global supply shortage of lithium by 2015, as production of electric and hybrid vehicles rises.

Others argue the country won’t be a limiting factor on advance battery production.

Even if Bolivia fails, it “will not be an impediment to the massive electrification of the world's motor vehicle fleet, as adequate lithium reserves are available elsewhere in the world,” Evans says.

General Motors Co., set to launch its plug-in Chevrolet Volt in November 2010 using battery technology from LG Chem, also appears confident in the lithium supply pipeline.

“There’s a lot of lithium out there with or without Bolivia,” says spokesman Brian Corbett. “We are definitely not concerned about long-term lithium supplies.”

Increased demand likely means raw-material prices will escalate, but that too doesn’t appear to be a major worry for industry insiders.

“It’s very likely the price of lithium is going to rise along with the increased demand, but the cost of batteries doesn’t depend only on raw-material prices. It’s just one factor,” says Wataru Nakamoto, assistant manager at Lithium Energy Japan, a joint venture between Mitsubishi, Mitsubishi Motors Corp. and battery maker GS Yuasa Corp. “The economies of scale as supplies increase, as well as advancements in technology, are also important.

“Bolivia is not the only supplier,” he adds.

Nissan Motor Co. Ltd., which has a battery JV with NEC Corp. and is about to launch its electric Leaf small car on the global market, also believes current worries over lithium availability are overblown.

“We’re confident there are enough lithium reserves to meet our requirements,” Nissan spokesperson Pauline Kee says.