By Kishori Krishnan Exclusive To Lithium Investing News ^{[1] [2]}

It's a known fact that Bolivia holds the world's largest reserves of lithium. Not only has its government announced that it will invest US$ 350 million on an industrial plant to produce between 20,000 and 30,000 MT of Li Carbonate beginning 2015, investors have also woken up to the fact that one single country could end up cornering the in-demand product.

The silvery-white metal and its compounds have several industrial applications, including heat-resistant glass and ceramics, high strength-to-weight alloys used in aircraft, and lithium batteries. Lithium also has important links to nuclear physics.

Since May 2008, the Bolivian government has been developing a pilot plant to obtain around 480MT of Li Carbonate a year. As of October 2009, the progress of the plant showed a delay of at least six months which implies that it will become fully operational only in 2011.

Here we go again. Not only is there a delay in ensuring adequate supplies of the metal, there are physical, political and social challenges playing out in the nation too, which could further delay regular supplies.

The industrialization of the Salar de Uyuni is also drawing protests. The government turned down foreign offers ^[3] for lithium plants apparently, not out of lack of interest in extracting lithium, but because it wanted to build the first plant itself.

In that respect and looking to fill a gap in its energy technology profile, Russia decided to get its first lithium ion battery production facility at the end of last year, with a little help from China's Thunder Sky Energy Group Ltd ^[4].

The Russian Corporation of Nanotechnologies ^[5] (RUSNANO), an entity formed to advance projects with "high commercial potential or social benefit," has teamed up with the prolific battery maker to build a plant in Novosibirsk, that will supply lithium ion-based energy storage for electric transportation, communications and other markets.

The Russia-based enterprise will produce, foremost, lithium batteries for all types of electric vehicles, including motorcycles and buses with electric motors.

It has been pointed out that one of the greatest advantages of these batteries is that they are free of "memory effect" after numerous cycles of charge and discharge. When used in public transportation, the batteries guarantee a 350-kilometers energy reserve after one charge.

Research would only enhance this. In the future, new technologies will make it possible to expand the energy reserve to 600 kilometers after one charge. Moreover, the batteries can carry out a quick recharge in only 30-minutes.

Production is expected to begin at the Novosibirsk plant in 2011, with a capacity to turn out 300 million Ah annually; capacity will rise to 400 Ah annually in 2012.

Bolivia, Chile and Argentina contain about 80 per cent of all the world's metal.

And if the Russians can manage to cotton on this important metal, can car majors be far behind? Lithium is an essential component of the batteries used in hybrid and electric cars. And after all, green fuel is the next big thing for the decade.

Japanese car company Toyota and an Australian mining company have teamed up ^[6]to develop a large lithium mine in Argentina.

The fact that Toyota is investing in the $120 million project shows that car manufacturers are getting concerned that supplies of lithium may be not be sufficient when electric or plug-in hybrid cars take off.

The Australian miner, Orocobre Limited ^[7] is already the largest miner of lithium in Argentina. Shares in the firm shot up more than 45 per cent in intraday trade the day of the announcement.

The deal also ensures a low-cost debt facility ^[8] guaranteed by the Japanese government to fund at least 60 per cent of the project's development costs.

The Toyota deal follows another $10.5-million equity investment in December by Magna International Inc and Mitsubishi Corp in Toronto-based Lithium Americas Corp ^[9] to help develop another lithium deposit in Argentina.

Magna, Mitsubishi and Toyota have all secured rights to purchase a percentage of the lithium produced at the sites under the terms of their deals.

Same story

As demand for lithium grows, technological development in the next ten years or so is set to follow a similar diversified path as the one observed in 2009, with Li-ion batteries aimed at facilitating the launching of the first mass-produced electric cars in the US ^[10]and other developed countries, while starting to gradually focus more on Li-air batteries, which are likely to take over the market towards the beginning of the next decade.

Analysts maintain that 2009 has been emblematic in terms of the billionaire financial support provided by the government to the emerging electric car and lithium battery industries in the US.

Worldwide, lithium exploration is developing at a fever pitch. Take a look at what firms are doing:

Lithium Corporation (OTCBB: LTUM) has been locking up properties it believes show promise. Reno-based Lithium Corp has managed to acquire claims in several areas ^[11] considered hotbeds for lithium exploration, three of which are west of Clayton Valley where Silver Peak ^[12] operates, the only US lithium carbonate brine production plant in the US.

At the start of the month, the company acquired an additional lithium brine prospect ^[13] in north-central Nevada.

Meanwhile, Pan American Lithium Corp ^[14] (PAL) (CA:PL) has provided an update relating to a potential private placement by POSCO in PAL. On January 13, 2010, the company had announced that it had entered into a non-binding letter of intent with POSCO, whereby an amount of up to C$ 5 million would be invested by POSCO in the company.

Since the due deligence is not yet over, POSCO and PAL have agreed to extend the date to April 15, 2010.

Australian lithium miner Galaxy Resources Ltd ^[15] has also received the green signal from its government. The company secured final key milestones for the development of its lithium carbonate plant in China's Jiangsu Province.

Galaxy shares were up 11 cents, or 9.73 per cent on Thursday. The plant is to be commissioned during the fourth quarter of 2010. Construction will begin in April. The firm has also secured shipping.

Galaxy officially opened its Mt Cattlin mine near Raventhorpe in Western Australia ^[16]'s south in November last year.