Andean Group - July 2009 (ISSN 1741-4466)

The French group Bolloré is hoping to clinch a deal with the government to develop the lithium in the Salar de Uyuni in the south of the country. It expects to sign the deal sometime in September, to mark the visit to Bolivia by the French president, Nicolas Sarkozy. The government's lithium development strategy is to use the resource for an industry, ideally the manufacture of batteries for electric vehicles. Lithium mined in Chile and Argentina is barely processed before being exported. At the very minimum the Bolivians wants to produce lithium carbonate. The government says it is prepared to develop the lithium itself if no partner can be found. Bolloré's only rivals are Mitsubishi and Sumitomo from Japan, which have also made investment proposals to the government. The government admits that so far none of the three has proposed manufacturing batteries in Bolivia. It says that the proposals focus much more on exploring and assessing the lithium deposit and not enough on what sort of industry will be built to use the lithium. The Salar de Uyuni covers 10,000 square kilometres and the salt deposits, which are rich in lithium, are 200 metres thick in places.

Inflation: In June monthly inflation was 0.2%, quite a reverse from the fall of0.18% in May. The accumulated rate for the first six months was 0.62% and the annual rate was 2.12%. In 2008 inflation was 11.9%.