South Korea and Bolivia signed a memorandum of understanding Thursday on development of lithium resources in the South American country, which has the world's largest reserves of the metal, a vital raw material for the batteries that run electric cars, laptops, digital cameras and mobile phones.

The agreement between state-run Korea Resources Corp. and its Bolivian counterpart was signed during a meeting between South Korean President Lee Myung-bak and Bolivian President Evo Morales, Lee's office said. Morales is on an official visit Aug. 25-27.

The MoU will allow South Korean firms to participate in a project to develop lithium evaporation ponds in the world's largest salt flat in southern Bolivia , and in joint research on industrial uses of the metal, the office said in a statement.

Five-year multiple-entry visas will be issued for Korean business people to help with their activities there, it said.

Seoul has set a ceiling for loans from its fund for Bolivia 's development from 2010-2014 at $250 million, the president's office said.

The initial agreement paves the way for "fullblown implementation of collaboration in the development of lithium mines," it said.

Morales also urged South Korean companies to invest in development of Bolivia 's other natural resources, including crude oil and natural gas.

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