The Guardian Weekly

Bolivia’s lithium battery boom

The state wants to exploit its lucrative reserves, a key component in producing car batteries – but at what price?

By Thomas Graham

Bolivia’s salt flats have long been a tourist draw. But in recent years visitors may have glimpsed excavators on the horizon – a hint of the industrial future that awaits. The brine beneath the salt flats contains lithium, essential for electric batteries. Last month, Bolivia announced it would partner with a Chinese consortium to extract it, reviving dreams of a lithium-powered economy.

Surging demand for lithium has caused prices to increase more than 10-fold since 2020, to record highs of almost $85,000 per tonne. And according to the United States Geological Survey, Bolivia has 21m tonnes of the metal, more than any other country in the world. It is yet to extract a significant quantity, but the country may yet have time to join the market while high prices last.

“Today begins the era of industrialisation of Bolivian lithium,” said President Luis Arce, when the new deal was announced. “There’s no time to lose,” he added.

Bolivia first declared its intent to industrialise its lithium shortly after former president Evo Morales led the Movimiento al Socialismo (Mas) to power in 2006. The Mas has governed for all but one year since – including the current administration – and insisted on sovereign control of Bolivia’s lithium, or with limited input from foreign companies.

The typical method of extraction involves pumping brine into ponds and processing the lithium salts once the water has evaporated. The state has invested roughly $800m in this method, with a grid of ponds and an unfinished plant that it says will this year begin producing 15,000 tonnes of lithium carbonate annually. That would make Bolivia a minor player in the global market, which produced more than 600,000 tonnes of lithium carbonate in 2022.

This method works well in Chile and Argentina, but is less well suited to Bolivia, where the brine has high levels of impurities and the salt flats have a rainy season of several months. YLB, the state lithium company, admitted to relatively poor results. When Arce’s government came to power in 2020, the project seemed less of a priority.

In a change of strategy, YLB called for proposals from foreign companies to develop new “direct lithium extraction” technologies that can pull lithium straight from brine. Such technologies could cut water use and reduce dependency on the weather. But they are largely unproven, with only a few examples of use at commercial scale.

The Chinese consortium that made the winning proposal includes CATL, the world’s biggest battery producer. Roughly 60% of the world’s lithium is processed in China.

There were few details about the agreement, except that it includes more than $1bn of investment for two industrial complexes, each of which will produce 25,000 tonnes of lithium carbonate a year. Arce added that Bolivia would begin exporting electric batteries in 2025.

“The reality of the country shows us that this dream is impossible,” said Héctor Córdova, former president of Bolivia’s state mining company. “We lack the basic industry, we don’t have qualified personnel, nor do we have a plan for industrial development in so short a space of time.”

The deal with the Chinese consortium isn’t the first that Bolivia has signed with foreign companies. In 2018 it signed a deal with ACISA, a German company, triggering protests in the city of Potosí, capital of the region that holds most lithium. The Potosí civic committee, an umbrella civil society organisation, began a strike over the terms of the deal before the October 2019 presidential election.

Morales won that vote amid allegations of fraud – later contested – that sparked protests across the country. In response, he cancelled the deal. But the protests continued, the police mutinied and the army suggested Morales resigned, which he did.

The civic committee of Potosí demanded to know the details of the new deal. Meanwhile in towns like Río Grande, on the edge of the salt flats, the announcement was met with a mixture of hope and doubt.

“There will be promises of jobs, money and development for the region,” said Donny Ali, a resident of Río Grande and former director of lithium at YLB. “But we’ve been hearing this since the governments of Evo Morales.”

Aside from economic benefits, said Ali, the greatest concern is over water. In Chile, local communities have reaped the benefits – and borne the cost – of lithium mining for years.

“I want to see if this money has really helped them,” said Ali. “If they really prefer the money – or if they would prefer to have water stability and greater harmony with Mother Earth.”

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2023-02-03T08:00:00.0000000Z

2023-02-03T08:00:00.0000000Z

https://theguardianweekly.pressreader.com/article/282187950161116

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