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Positive news for New World Resource Corp. (TSX-V:NW) as the Pastos Grandes Lithium project is considered to be located outside of Bolivia’s strategic fiscal lithium reserve.
By Dave Brown – Exclusive to Lithium Investing News
President Evo Morales has declared lithium to be the “hope of humanity,” as well as the key to Bolivia’s future economic prosperity, with the government remaining unfavorable to any foreign mining investment interests. According to Bolivia’s most recent constitution, the country’s natural resources belong to the Bolivian people and must be administered in their collective interest by the state.
Instead of exporting the raw lithium extracts, the government wants it to be refined, processed and industrialized, with battery plants and vehicle manufacturers, on Bolivian soil. The objective is to capture the value added by industrialization for Bolivians, in the form of jobs and economic and social benefits, instead of observing transnational corporations repatriate the majority of profits.
Mining Concerns
On April 22, New World Resource Corp. (TSX-V:NW) issued a press release to disclose recent discussions with the Bolivian Government. According to the news release, management of the Canadian-based mining exploration company had a number of discussions and correspondences with the Bolivian Government with assistance from the Ambassador and Senior Trade Commissioner of the Government of Canada.
The Government of Bolivia is currently in the process of establishing a new mining law with a final draft anticipated before the end of May. Bolivia’s Mining Ministry is consulting with interested parties including foreign companies in drafting the new mining law.
Although no new law has been established, New World has been advised that pre-existing rights would be respected within the new mining law. The Company has been invited to join the Bolivian Government’s Scientific Support Committee that has been set up within the evaporates division of Corporacion Minera de Bolivia. The Advisory Committee is designed to assist the Bolivian Government in its plan to develop a pilot plant at the Salar de Uyuni, Bolivia’s largest lithium resource, which is currently part of the country’s strategic fiscal reserve. New World’s Pastos Grandes project is located outside of this strategic fiscal reserve.
The President of New World Reserve Corp., John Lando, was very optimistic about the news, “The warm reception that we received from the Mining Ministry of Bolivia is encouraging. Although a new mining law is not yet finalized, at the senior level of the ministry we were clearly assured that pre-existing rights will be respected under the new law.” The market has responded positively to the release sending the share price from opening on Thursday at CAD $.23 to closing on Monday at CAD $.33 on relatively high volumes. Profit taking has occurred this week, seeing the current valuation shift downward in the range of $.29 retaining a 26 percent appreciation on the stock price.
Ambitious Aspirations
The government’s multi-phase plan is a long term enterprise. The initial $5.7 million pilot plant, to evaluate the quality of Uyuni’s lithium deposits and extraction feasibility assessments, began construction in October 2008, although it is behind schedule. The pilot plant will be upgraded to an industrial-size factory complex capable of producing an estimated 30,000 tonnes of lithium carbonate annually by 2014, close to Chile’s current production levels. The cost through this phase, including related infrastructure development, is estimated at $800 million.
By 2018, the government hopes to produce metallic lithium, batteries, and a range of value-added products. According to some estimates, Bolivia’s salt flats contain enough lithium, to potentially manufacture batteries for 4.8 billion electric cars.
The Bolivian lithium reserves are relatively unconcentrated and are subject to seasonal flooding, which slows the evaporation process. In comparison, Chile’s salares are considered to contain the best quality lithium deposits in the world, with high concentrations, in a dry climate at lower altitude. Reportedly, Bolivian scientists have developed a unique formula for producing high-quality lithium carbonate, which may help to reduce costs.