S. Korea, Bolivia agree on joint lithium battery business

SEOUL, July 31 | Sat Jul 30, 2011 11:27pm EDT

(Reuters) - South Korea and Bolivia have agreed to set up a joint venture in a bid to pursue cooperation on the lithium battery business sector, state-run Korea Resources Corp. (KORES) said in a statement on Sunday.

The agreement was stipulated in a memorandum of understanding (MOU) signed in La Paz on Saturday between a KORES-led Korean consortium, involving POSCO, SK Innovation Co. and LG Chem, Ltd., and Bolivia's state-owned mining corporation COMIBOL, KORES said in a statement.

Also under the MOU, Bolivia, claiming almost half of the world's known lithium reserves with a deposit of some 5.4 million tonnes, acknowledges the South Korean team as "strategic partner" for its lithium battery business, KORES added.

"Currently, 10 countries including France, Japan, China, Brazil as well as Korea are engaged in a fierce competition to become Bolivia's lithium business partner," KORES chief Shin-Jong Kim was quoted as saying in the statement.

"I am convinced that the joint Korea-Bolivia lithium battery project will place Korea in a position of advantage over the others."

KORES said the two parties also agreed to launch a task force team to push for the joint lithium battery project including the joint venture to be built in Bolivia. It did not give further details about the proposed venture.

In April 2009, South Korea signed a separate MOU with Bolivia on cooperation for joint development of lithium mines in the South American country and they have since improved exchanges on technology development and research related to the lithium business and relevant industries.

Lithium is widely used in rechargeable batteries for mobile devices such as notebook computers and cellular phones, and electric vehicles.

Its global market has grown an average six percent annually since 2000. With the age of electric cars on its way, however, the average growth rate could be up to 20 percent a year in upcoming years, KORES figures showed.

The spot market price of lithium closed at $4,752 a tonne on Thursday, a rise of $200 from a month before, according to KORES. (Reporting by Sung-Won Shim; Editing by Robert Birsel)